1.Short
title; table of contents
(a)This Act may be cited
as the Homeownership, Manufacturing,
and Economic Growth Act
or the HOME
Act
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of
contents.
TITLE I—Keeping taxes low
Sec. 100. Amendment to 1986 Code.
Subtitle A—Extension of expiring provisions
Part I—Individual tax provisions
SUBPART A—Provisions expiring in 2007
Sec. 101. Nonbusiness energy property.
Sec. 102. Election to include combat pay as earned income for
purposes of the earned income credit.
Sec. 103. Deduction for certain expenses of elementary and
secondary school teachers.
Sec. 104. Distributions from retirement plans to individuals
called to active duty.
Sec. 105. Modification of mortgage revenue bonds for
veterans.
Sec. 106. Deduction for State and local sales
taxes.
Sec. 107. Archer MSAs.
Sec. 108. Deduction of qualified tuition and related
expenses.
Sec. 109. Tax-free distributions from individual retirement
plans for charitable purposes.
Sec. 110. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
SUBPART B—Provisions expiring in 2008
Sec. 111. Residential energy efficient property.
Part II—Business tax provisions
SUBPART A—Provisions expiring in 2007
Sec. 121. Research activities.
Sec. 122. Indian employment credit.
Sec. 123. Railroad track maintenance.
Sec. 124. Production of fuel from a nonconventional source at
certain facilities.
Sec. 125. Energy efficient appliances.
Sec. 126. 15-year straight-line cost recovery for qualified
leasehold improvements and qualified restaurant improvements.
Sec. 127. Seven-year cost recovery period for motorsports
racing track facility.
Sec. 128. Accelerated depreciation for business property on
Indian reservation.
Sec. 129. Qualified conservation contributions.
Sec. 130. Enhanced charitable deduction for contributions of
food inventory.
Sec. 131. Enhanced charitable deduction for contributions of
book inventory.
Sec. 132. Enhanced charitable deduction for corporate
contributions of computer equipment for educational purposes.
Sec. 133. Expensing of environmental remediation
costs.
Sec. 134. Deduction allowable with respect to income
attributable to domestic production activities in Puerto Rico.
Sec. 135. Special rule for sales or dispositions to implement
FERC or State electric restructuring policy.
Sec. 136. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 137. Suspension of taxable income limit with respect to
marginal wells.
Sec. 138. Treatment of certain dividends of regulated
investment companies.
Sec. 139. Basis adjustment to stock of S corporations making
charitable contributions of property.
Sec. 140. Extension of qualified zone academy
bonds.
Sec. 141. Tax incentives for investment in the District of
Columbia.
Sec. 142. 0.2 percent FUTA surtax.
SUBPART B—Provisions expiring in 2008
Sec. 146. Biodiesel and renewable diesel used as
fuel.
Sec. 147. Electricity produced from certain renewable
resources; production of refined coal and Indian coal.
Sec. 148. New markets tax credit.
Sec. 149. Extension of new energy efficient home
credit.
Sec. 150. Extension of mine rescue team training
credit.
Sec. 151. Extension of energy credit.
Sec. 152. 5-year NOL carryback for certain electric utility
companies.
Sec. 153. Extension of energy efficient commercial buildings
deduction.
Sec. 154. Extension of election to expense advanced mine safety
equipment.
Sec. 155. Extension and modification of expensing rules for
qualified film and television productions.
Sec. 156. Subpart F exception
for active financing income.
Sec. 157. Extension of look-thru rule for related controlled
foreign corporations.
Part III—Excise tax provisions
SUBPART A—Provisions expiring in 2007
Sec. 161. Increase in limit on cover over of rum excise tax to
Puerto Rico and the Virgin Islands.
Sec. 162. Parity in the application of certain limits to mental
health benefits.
Sec. 163. Extension of economic development credit for American
Samoa.
SUBPART B—Provisions expiring in 2008
Sec. 166. Special rule for qualified methanol or ethanol fuel
from coal.
Sec. 167. Biodiesel mixture credit and credit for fuels used
for nontaxable purposes.
Part IV—Tax administration provisions
SUBPART A—Provisions expiring in 2007
Sec. 171. Disclosures to facilitate combined employment tax
reporting.
Sec. 172. Disclosure of return information to apprise
appropriate officials of terrorist activities.
Sec. 173. Disclosure upon request of information relating to
terrorist activities.
Sec. 174. Disclosure of return information to carry out income
contingent repayment of student loans.
Sec. 175. Authority for undercover operations.
SUBPART B—Provisions expiring in 2008
Sec. 176. Extension of reporting of interest of exempt
organizations in insurance contracts.
Sec. 177. Disclosures relating to certain programs administered
by the Department of Veterans Affairs.
Subtitle B—Alternative minimum tax relief
Sec. 181. 2-year extension of increased alternative minimum tax
exemption amount.
Sec. 182. Extension of alternative minimum tax relief for
nonrefundable personal credits.
Subtitle C—Additional tax relief
Sec. 191. Permanent extension of 2001 and 2003 tax relief
provisions.
Sec. 192. Maximum corporate income tax rate reduced to 25
percent.
Sec. 193. 3-year carryback of certain credits.
Sec. 194. Election to accelerate AMT and R and D credits in
lieu of bonus depreciation.
Sec. 195. Indexing of certain assets for purposes of
determining gain or loss.
Sec. 196. Deferral of gain on sale of certain principal
residences.
Sec. 197. Amount excluded from sale of principal residence
indexed for inflation.
Sec. 198. Repeal of phasein for domestic production activities
deduction.
TITLE II—Keeping America competitive
Sec. 201. Sense of Congress regarding the legislative
initiatives required to strengthen and protect the well being of our Nation's
capital markets.
Sec. 202. Directing the Securities and Exchange Commission to
convene a public hearing on the impact of excessive litigation.
Sec. 203. Directing the Commission to establish formal
processes and procedures for cost-benefit analyses of proposed and existing
rules and regulations.
Sec. 204. Directing the Commission to define smaller
public company
to provide certainty to issuers.
Sec. 205. Mutual recognition.
Sec. 206. Supporting the Securities and Exchange Commission
reform efforts to speed the process of rulemaking for self regulatory
organizations.
Sec. 207. Eliminate the exemption from State regulation for
certain securities designated by national securities exchanges.
Sec. 208. Directing the Commission to accelerate full
conversion of IFRS and United States GAAP.
Sec. 209. Promoting market access for financial
services.
TITLE III—Protecting homeowners
Sec. 301. Subprime refinancing loans through use of qualified
mortgage bonds.
Sec. 302. Expeditious distribution of funds already provided
for mortgage foreclosure counseling.
Sec. 303. Credit for purchase of homes in or near
foreclosure.
Sec. 304. Enhanced mortgage loan disclosures.
Sec. 305. Carryback of certain net operating losses allowed for
5 years; temporary suspension of 90 percent AMT limit.
TITLE IV—Reducing the litigation tax
Sec. 401 Limitation on punitive damages for small
businesses.
Sec. 402. Reasonableness review of attorney’s fees.
Sec. 403. Partial award of attorney’s fees for unreasonable
lawsuits.
Sec. 404. Mandatory sanctions for frivolous
lawsuits.
Sec. 405. Bar on junk science in the courtroom.
<enum>I</enum><header>Keeping taxes
low</header>
<section id="idABB4A820F25B46C0B6D1C3AAF8CA10DB"><enum>100.</enum><header>Amendment to
1986 Code</header><text display-inline="no-display-inline">Except as otherwise
expressly provided, whenever in this title 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.</text>
</section><subtitle id="idD88CDFE394434D57B390F4636270B136"><enum>A</enum><header>Extension of
expiring provisions</header>
<part id="id3C3ACD81F45E4AFE9E23A5CEC8F0A93B"><enum>I</enum><header>Individual tax
provisions</header>
<subpart id="id1E56DDEA6ADE4E36A127EF0C3F6B643D"><enum>A</enum><header>Provisions
expiring in 2007</header>
<section commented="no" display-inline="no-display-inline" id="id0BCAF8B74E764147B9B0B9BCD41D8ECE"><enum>101.</enum><header>Nonbusiness
energy property</header>
<subsection commented="no" id="id80FA32A3046E443ABA5EF9958D4A4193"><enum>(a)</enum><header>Extension of
credit</header><text display-inline="yes-display-inline">Section 25C(g)
(relating to termination) is amended by striking <quote>December 31,
2007</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" id="id646575C875F142FE8158A8A5352D1177"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to property
placed in service after December 31, 2007.</text>
</subsection></section><section commented="no" id="idD2192FD9C5564B578800445A517BA089"><enum>102.</enum><header>Election to
include combat pay as earned income for purposes of the earned income
credit</header>
<subsection id="IDA33AD759E0424354A14B3C15163C71B9"><enum>(a)</enum><header>In
general</header><text>Subclause (II) of section 32(c)(2)(B)(vi) (defining
earned income) is amended by striking <quote>January 1, 2008</quote> and
inserting <quote>January 1, 2010</quote>.</text>
</subsection><subsection id="id4732A3CF85664F918E326787684968F5"><enum>(b)</enum><header>Conforming
amendment</header><text>Paragraph (4) of section 6428, as amended by the
Economic Stimulus Act of 2008, is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idD787E513DB98409CA2EF68EC368ACA54" style="OLC">
<paragraph id="H6DDA45658C97469A91A0C9DCEED99BE"><enum>(4)</enum><header>Earned
income</header><text>The term <quote>earned income</quote> has the meaning set
forth in section 32(c)(2) except that such term shall not include net earnings
from self-employment which are not taken into account in computing taxable
income.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD6352D03AB2A441B8A828D4B4C3E71AF"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years ending after December 31, 2007.</text>
</subsection></section><section id="H406032AA87AC43E6932DE34D0265E7CB"><enum>103.</enum><header>Deduction for
certain expenses of elementary and secondary school teachers</header>
<subsection id="HF5EEB86D797845D9A215450007B3CB46"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subparagraph (D) of
section 62(a)(2) (relating to certain expenses of elementary and secondary
school teachers) is amended by striking <quote>or 2007</quote> and inserting
<quote>2007, 2008, or 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HBC8B0662C20F442982D3CAD00DDB64"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section id="ID24EC1C36A1B14F96AD1F69CEDA7E4AB7"><enum>104.</enum><header>Distributions
from retirement plans to individuals called to active duty</header>
<subsection id="ID7BB2E27C319B4312AEDAB5ED3C7A4778"><enum>(a)</enum><header>In
General</header><text>Clause (iv) of section 72(t)(2)(G) is amended by striking
<quote>December 31, 2007</quote> and inserting <quote>January 1,
2010</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID792C030DEDC54FD095A6FFB1880E85E1"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall apply to
individuals ordered or called to active duty on or after December 31,
2007.</text>
</subsection></section><section id="IDA4A63939BF4D492B9D52E24025ACC405"><enum>105.</enum><header>Modification
of mortgage revenue bonds for veterans</header>
<subsection id="IDB7FB19A31F6143A9959DD761A263D013"><enum>(a)</enum><header>Qualified
Mortgage Bonds Used To Finance Residences for Veterans Without Regard to
First-Time Homebuyer Requirement</header><text>Subparagraph (D) of section
143(d)(2) (relating to exceptions) is amended by inserting <quote>and after the
date of the enactment of the HOME Act and before January 1, 2010</quote> after
<quote>January 1, 2008</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDED7B238329254567BE4A7A2A6E345DDB"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall apply to bonds
issued after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="HB2FDAE35D5044852BC6056D5A46AF7B" section-type="subsequent-section"><enum>106.</enum><header>Deduction for State
and local sales taxes</header>
<subsection commented="no" id="H6384FC8E37794408B468F9AB11C56904"><enum>(a)</enum><header>In
general</header><text>Subparagraph (I) of section 164(b)(5) is amended by
striking <quote>January 1, 2008</quote> and inserting <quote>January 1,
2010</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H6A642AB987A944DB90DBA4F73200002B"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idAB5A3FCEBB60408294D41759C3D5BCA9"><enum>107.</enum><header>Archer
MSAs</header>
<subsection commented="no" display-inline="no-display-inline" id="id1680304B71D74E29BF342147E92BA2C4"><enum>(a)</enum><header>In
general</header><text>Subsection (i) of section 220 (relating to limitation on
number of taxpayers having Archer MSAs) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id443AEDF17B644DCAAEA56E37ECED4669"><enum>(1)</enum><text>by striking
<quote>2007</quote> each place it appears in paragraphs (2) and (3)(B) and
inserting <quote>2009</quote>,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id6229CE6E75B24986B0876B4F154FD043"><enum>(2)</enum><text>by striking
<quote><header-in-text level="subparagraph" style="OLC">2007</header-in-text></quote> in the heading of paragraph (3)(B)
and inserting <quote><header-in-text level="subparagraph" style="OLC">2009</header-in-text></quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idF20745A23A1F446EB6EF5E1DDEECBA74"><enum>(b)</enum><header>Conforming
amendments</header><text>Subsection (j) of section 220 is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id40CC5144569F49F3B8F7822A442D3160"><enum>(1)</enum><text>by striking
<quote>or 2006</quote> each place it appears in paragraph (2) and inserting
<quote>2006, 2007, or 2008</quote>,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id223F766A9A83408691669747BEC9CD6F"><enum>(2)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">or
2006</header-in-text></quote> in the heading for paragraph (2) and inserting
<quote><header-in-text level="paragraph" style="OLC">2006, 2007, or
2008</header-in-text></quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id1DFA6F1CCDEA41FE882699CD1A1D1E6B"><enum>(3)</enum><text>by striking
<quote>and 2006</quote> in paragraph (4) and inserting <quote>2006, 2007, and
2008</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idE2AB10B748774D30B89A99C7EC44343E"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to calendar
years beginning after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="H0911F6083497447BADAC09E0B98D67E8" section-type="subsequent-section"><enum>108.</enum><header>Deduction of
qualified tuition and related expenses</header>
<subsection id="H368783DD7DA3431393444914D220F212"><enum>(a)</enum><header>In
general</header><text>Subsection (e) of section 222 (relating to termination)
is amended by striking <quote>December 31, 2007</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H2C328B0E0ABA43FB811DB19FDF3E023D"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="HBE1ED2DFA39F4B72B75D702DCC851F82" section-type="subsequent-section"><enum>109.</enum><header>Tax-free
distributions from individual retirement plans for charitable purposes</header>
<subsection id="H043D149B7F98453BBE7D2EC237A200F0"><enum>(a)</enum><header>In
general</header><text>Subparagraph (F) of section 408(d)(8) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HA3FD08413557463DB818980057E367BD"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
distributions made in taxable years beginning after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idA43F67C471CC4B09A047AE2430532E7B"><enum>110.</enum><header>Stock in RIC
for purposes of determining estates of nonresidents not citizens</header>
<subsection commented="no" display-inline="no-display-inline" id="idA025601032474F97B2BC96385F08F8C1"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (3) of
section 2105(d) (relating to stock in a RIC) is amended by striking
<quote>December 31, 2007</quote> and inserting <quote>December 31,
2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id335D8D9F58C14193BC869C19CEEA7174"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to decedents
dying after December 31, 2007.</text>
</subsection></section></subpart><subpart id="id6E4D680DA93A42349E3A0C445F57E39A"><enum>B</enum><header>Provisions
expiring in 2008</header>
<section id="id425511F7FDE549B5B6282B05986AF418"><enum>111.</enum><header>Residential
energy efficient property</header><text display-inline="no-display-inline">Subsection (g) of section 25D (relating to
termination) is amended by striking <quote>December 31, 2008</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</section></subpart></part><part id="idE39616F7820D498FAEC99A3C806693F1"><enum>II</enum><header>Business tax
provisions</header>
<subpart id="id3822258A6A944489BB32BFFF7EDF91E5"><enum>A</enum><header>Provisions
expiring in 2007</header>
<section id="id8C04D6A5F6E9420AADCF63FFB7DB465D"><enum>121.</enum><header>Research
activities</header>
<subsection id="id38E78F1C8EAB480FB0013A4738D39FC8"><enum>(a)</enum><header>In
general</header><text>Section 41(h) (relating to termination) is amended by
striking <quote>December 31, 2007</quote> and inserting <quote>December 31,
2009</quote> in paragraph (1)(B).</text>
</subsection><subsection id="idAFA43F72D236414FA10993DD298BF624"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to amounts
paid or incurred after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="H12FD917F96A543E9BB365817C735F7B2" section-type="subsequent-section"><enum>122.</enum><header>Indian employment
credit</header>
<subsection id="H994638FE5C754634BC764CB115865760"><enum>(a)</enum><header>In
general</header><text>Subsection (f) of section 45A (relating to termination)
is amended by striking <quote>December 31, 2007</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H568E60AD31CE4728B6FDD9342CF1B308"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section id="H6D79774ABDC744C6A9D7EDB1059FB800"><enum>123.</enum><header>Railroad track
maintenance</header>
<subsection id="H3D96A57D6C9C47819DBEA44CE3B56B3F"><enum>(a)</enum><header>In
general</header><text>Subsection (f) of section 45G (relating to application of
section) is amended by striking <quote>January 1, 2008</quote> and inserting
<quote>January 1, 2010</quote>.</text>
</subsection><subsection id="id0705ACFD70F04418BBC2BFBDDDAE5BC0"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
expenditures paid or incurred during taxable years beginning after December 31,
2007.</text>
</subsection></section><section id="id9717C5D57E0C430986135932D357B192"><enum>124.</enum><header>Production of
fuel from a nonconventional source at certain facilities</header>
<subsection id="idD0189EB023284267A2B4F93CC721D9B1"><enum>(a)</enum><header>In
general</header><text>Subsection (f)(1)(B) of section 45K (relating to
extension for certain facilities) is amended by striking <quote>January 1,
2008</quote> and inserting <quote>January 1, 2010</quote>.</text>
</subsection><subsection id="id278E6DAD6E214E9397D5396F82024212"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to fuels
produced and sold after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idCD94C6F7299D4934BB14D8D1A68BA773"><enum>125.</enum><header>Energy
efficient appliances</header>
<subsection commented="no" display-inline="no-display-inline" id="id70773C4516D74B43954174FF1047335D"><enum>(a)</enum><header>In
general</header><text>Subsection (b) of section 45M (relating to applicable
amount) is amended by striking <quote>calendar year 2006 or 2007</quote> each
place it appears in paragraphs (1)(A)(i), (1)(B)(i), (1)(C)(ii)(I), and
(1)(C)(iii)(I), and inserting <quote>calendar year 2006, 2007, 2008, or
2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idD8F10D1A14EC4C1C9594E94E15C862A2"><enum>(b)</enum><header>Restart of
credit limitation</header><text>Paragraph (1) of section 45M(e) (relating to
aggregate credit amount allowed) is amended by inserting <quote>beginning after
December 31, 2007</quote> after <quote>for all prior taxable
years</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idB4FB9603826742319FF79C14BEA897BB"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
appliances produced after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id3A56D4D3FD1D434E821306C8DAC2932A"><enum>126.</enum><header>15-year
straight-line cost recovery for qualified leasehold improvements and qualified
restaurant improvements</header>
<subsection id="IDBE746848356E4AF3A97B6373A4309340"><enum>(a)</enum><header>In
general</header><text>Clauses (iv) and (v) of section 168(e)(3)(E) (relating to
15-year property) are each amended by striking <quote>January 1, 2008</quote>
and inserting <quote>January 1, 2010</quote>.</text>
</subsection><subsection id="IDCB131062A22945EDBD09958C6B247201"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after December 31, 2007.</text>
</subsection></section><section id="H36151EC261674D1384679DC37E19BF42"><enum>127.</enum><header>Seven-year cost
recovery period for motorsports racing track facility</header>
<subsection id="HFEF5F94D2F47497F98191FCC9F4FA56C"><enum>(a)</enum><header>In
general</header><text>Subparagraph (D) of section 168(i)(15) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HA6113B6DB1824AF4A386C4A6BF4600E6"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to property
placed in service after December 31, 2007.</text>
</subsection></section><section id="HD8C3242227FB4F8B8F6CC20030D526B9"><enum>128.</enum><header>Accelerated
depreciation for business property on Indian reservation</header>
<subsection id="H87875697DC884C50853507FAF2B8317"><enum>(a)</enum><header>In
general</header><text>Paragraph (8) of section 168(j) (relating to termination)
is amended by striking <quote>December 31, 2007</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H98DAA23691AA490EBF97F825963050D3"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to property
placed in service after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="HFC8D5C6402A649419887DCAB5F95D19" section-type="subsequent-section"><enum>129.</enum><header>Qualified
conservation contributions</header>
<subsection id="HBFB0759BCA3C4734A8B467FA2DD90623"><enum>(a)</enum><header>In
general</header><text>Clause (vi) of section 170(b)(1)(E) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection id="id3CBC193C950B4121B7F3EE86E4665399"><enum>(b)</enum><header>Contributions
by corporate farmers and ranchers</header><text>Clause (iii) of section
170(b)(2)(B) (relating to termination) is amended by striking <quote>December
31, 2007</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H9A9A6C8A59AD4B04BBAEE223356F78D"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
contributions made in taxable years beginning after December 31, 2007.</text>
</subsection></section><section commented="no" id="H8E64E530DB4B4DC2A96B6F6DBE17CB06"><enum>130.</enum><header>Enhanced
charitable deduction for contributions of food inventory</header>
<subsection commented="no" id="HFFE3C000BB0746A5BB3F3DE3404AF7"><enum>(a)</enum><header>In
general</header><text>Clause (iv) of section 170(e)(3)(C) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H6837DE957F334372BD51B2EBFE545C43"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
contributions made after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id63DBF9B04F334B00AE5F4EC6B39B9FAF"><enum>131.</enum><header>Enhanced
charitable deduction for contributions of book inventory</header>
<subsection commented="no" display-inline="no-display-inline" id="idE6443A8C015143C3BB335B0AEE2F51A5"><enum>(a)</enum><header>In
general</header><text>Clause (iv) of section 170(e)(3)(D) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3F37F734D0D04362B9ACD61F19674EFA"><enum>(b)</enum><header>Clerical
amendment</header><text>Clause (iii) of section 170(e)(3)(D) (relating to
certification by donee) is amended by inserting <quote>of books</quote> after
<quote>to any contribution</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3CAA481F14C4450493B21BE12FE210F4"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
contributions made after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id7AC5731EF6FA448691F6D5DE16F48D1E"><enum>132.</enum><header>Enhanced
charitable deduction for corporate contributions of computer equipment for
educational purposes</header>
<subsection commented="no" display-inline="no-display-inline" id="id82ACC8EDA9D54C4C90A38E6AA1C26C99"><enum>(a)</enum><header>In
general</header><text>Subparagraph (G) of section 170(e)(6) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idF0DCAEF291C04FB991D5CCEA583DF766"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
contributions made after December 31, 2007.</text>
</subsection></section><section id="HEC76B72602774C84A753D2B2776F06F5"><enum>133.</enum><header>Expensing of
environmental remediation costs</header>
<subsection id="H0E9EEEC28B964C67994C473DD10100A9"><enum>(a)</enum><header>In
general</header><text>Subsection (h) of section 198 (relating to termination)
is amended by striking <quote>December 31, 2007</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H99FAC0C4A8A446E087D99F8BCF8BD096"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
expenditures paid or incurred after December 31, 2007.</text>
</subsection></section><section id="H196DFA13D86C459AA893216D975B87F4"><enum>134.</enum><header>Deduction
allowable with respect to income attributable to domestic production activities
in Puerto Rico</header>
<subsection id="HE09C9686EF2C442EB14956002F43FCBA"><enum>(a)</enum><header>In
general</header><text>Subparagraph (C) of section 199(d)(8) (relating to
termination) is amended—</text>
<paragraph id="H50D41DBFCF594766B519FCA78DA26100"><enum>(1)</enum><text>by striking
<quote>first 2 taxable years</quote> and inserting <quote>first 4 taxable
years</quote>, and</text>
</paragraph><paragraph id="H55C685EBB5B1427091F12BDF969800AD"><enum>(2)</enum><text>by striking
<quote>January 1, 2008</quote> and inserting <quote>January 1,
2010</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H077806D4C0F34341A673DB7682B36B82"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id12A1C332DC0546C0B609392E0C914DFE"><enum>135.</enum><header>Special rule
for sales or dispositions to implement FERC or State electric restructuring
policy</header>
<subsection commented="no" display-inline="no-display-inline" id="id0EF52DC7599A43D5A4940F1A64103EC7"><enum>(a)</enum><header>In
general</header><text>Paragraph (3) of section 451(i) (relating to qualifying
electric transmission transaction) is amended by striking <quote>January 1,
2008</quote> and inserting <quote>January 1, 2010</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id7E8D919538454F5BB22F5D3DDA80DE27"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
transactions occurring after December 31, 2007.</text>
</subsection></section><section id="HC327A6861A0B41EF86E595C6F5047808"><enum>136.</enum><header>Modification of
tax treatment of certain payments to controlling exempt organizations</header>
<subsection id="H64C925302C9846479F17DB89EB395E16"><enum>(a)</enum><header>In
general</header><text>Clause (iv) of section 512(b)(13)(E) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H0F5CA84F487C4A4DBF01AC98A6076140"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to payments
received or accrued after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id7BDBC41737EC48C5BCEB6F26ACE51B17"><enum>137.</enum><header>Suspension of
taxable income limit with respect to marginal wells</header>
<subsection commented="no" display-inline="no-display-inline" id="id5A5359E1553048E884E7E1AD107C6552"><enum>(a)</enum><header>In
general</header><text>Subparagraph (H) of section 613A(c)(6) (relating to
temporary suspension of taxable income limit with respect to marginal
production) is amended by striking <quote>January 1, 2008</quote> and inserting
<quote>January 1, 2010</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id4D66ACE7D1AA47768B87F94D8FCC08CC"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section id="HE92E18ACDC924C128B2591CFFBAD3318"><enum>138.</enum><header>Treatment of
certain dividends of regulated investment companies</header>
<subsection id="H6571314F159F40F2AF74F07F9B99553B"><enum>(a)</enum><header>Interest-related
dividends</header><text>Subparagraph (C) of section 871(k)(1) (defining
interest-related dividend) is amended by striking <quote>December 31,
2007</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection display-inline="no-display-inline" id="H37A2A5EE703D42430031C9048FD3EA06"><enum>(b)</enum><header>Short-term
capital gain dividends</header><text display-inline="yes-display-inline">Subparagraph (C) of section 871(k)(2)
(defining short-term capital gain dividend) is amended by striking
<quote>December 31, 2007</quote> and inserting <quote>December 31,
2009</quote>.</text>
</subsection><subsection display-inline="no-display-inline" id="id86619BDF2933482AB1709DF885BEF587"><enum>(c)</enum><header>Disposition of
investment in United States real property</header><text>Clause (ii) of section
897(h)(4)(A) (relating to termination) is amended by striking <quote>December
31, 2007</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HE71CC284151A4FF28F36E3AB773626F3"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to dividends
with respect to taxable years of regulated investment companies beginning after
December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="H192138D5F89C49E6B630D32E9900037E" section-type="subsequent-section"><enum>139.</enum><header>Basis adjustment to
stock of S corporations making charitable contributions of property</header>
<subsection id="H98037D14367D40DB838FBE8C6F5E6B9C"><enum>(a)</enum><header>In
general</header><text>The last sentence of section 1367(a)(2) (relating to
decreases in basis) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection id="HD726C94443224E01A7E8C4373591AE4C"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
contributions made in taxable years beginning after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id8891EB7526D84137A8475B5325923E4E"><enum>140.</enum><header>Extension of
qualified zone academy bonds</header>
<subsection commented="no" display-inline="no-display-inline" id="id7FAE9F09BB9C43CAA1AA6FC0E403F10D"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 1397E(e) is amended by striking
<quote>and 2007</quote> and inserting <quote>2007, 2008, and
2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id62BA2EF92C8F420D8090F72811190210"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
obligations issued after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idDE16A00E855A4633940CCA465E2E944B"><enum>141.</enum><header>Tax incentives
for investment in the District of Columbia</header>
<subsection commented="no" display-inline="no-display-inline" id="idD38584AC99554D16ADE76C1F2A47879F"><enum>(a)</enum><header>Designation of
DC enterprise zone</header><text>Subsection (f) of section 1400 (relating to
time for which designation applicable) is amended by striking <quote>December
31, 2007</quote> each place it appears in paragraphs (1) and (2) and inserting
<quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id458E5A6692CF438F8483345441650A9A"><enum>(b)</enum><header>Tax-exempt DC
empowerment zone bonds</header><text>Subsection (b) of section 1400A (relating
to period of applicability) is amended by inserting <quote>, and after the date
of the enactment of the HOME Act and before December 31, 2009</quote> after
<quote>December 31, 2007</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idA86481B0A1E24B4B84DCA42CA5A3CC0F"><enum>(c)</enum><header>Acquisition
date for eligibility for zero-percent capital gains rate for investment in
DC</header><text>ubsection (b) of section 1400B (relating to DC zone asset) is
amended by striking <quote>January 1, 2008</quote> each place it appears in
paragraphs (2)(A)(i), (3)(A), (4)(A)(i), and (4)(B)(i)(I) and inserting
<quote>January 1, 2010</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id733C0B4C5F7D454DA2A4DAB8C1764292"><enum>(d)</enum><header>Tax credit for
first-time DC homebuyers</header><text>Subsection (i) of section 1400C
(relating to application of section) is amended by striking <quote>January 1,
2008</quote> and inserting <quote>January 1, 2010</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idF1B82FCACD914D5D9F39A3EA17B97397"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idC1BC2E98F818449F9C9765E25D053DE7"><enum>142.</enum><header>0.2 percent
FUTA surtax</header>
<subsection commented="no" display-inline="no-display-inline" id="id09D3FEC3777C41238EB832A0B24A322B"><enum>(a)</enum><header>In
general</header><text>Section 3301 (relating to rate of tax) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="idC149ABFB3BF34D348EC60B31D8ED3B5E"><enum>(1)</enum><text>by striking
<quote>through 2007</quote> in paragraph (1) and inserting <quote>through
2009</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id4DB01954DC984A248025F4C972908069"><enum>(2)</enum><text>by striking
<quote>calendar year 2008</quote> in paragraph (2) and inserting
<quote>calendar year 2010</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id5AAE16FC3BB74F1C86772D4351478FFF"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to wages
paid after December 31, 2007.</text>
</subsection></section></subpart><subpart id="idB2EC3486766644FC96E8A341FFA78677"><enum>B</enum><header>Provisions
expiring in 2008</header>
<section id="idA6386241C4254C538A74133B293F257C"><enum>146.</enum><header>Biodiesel and
renewable diesel used as fuel</header><text display-inline="no-display-inline">Subsection (g) of section 40A (relating to
termination) is amended by striking <quote>December 31, 2008</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</section><section id="id58C540D9C634421CB1544453C50A2433"><enum>147.</enum><header>Electricity
produced from certain renewable resources; production of refined coal and
Indian coal</header><text display-inline="no-display-inline">Section 45(d)
(relating to qualified facilities) is amended by striking <quote>January 1,
2009</quote> each place it appears in paragraphs (1), (2), (3), (4), (5), (6),
(7), (8), (9), and (10) and inserting <quote>January 1, 2010</quote>.</text>
</section><section id="H760774BC72734740A85E010060018121"><enum>148.</enum><header>New markets tax
credit</header><text display-inline="no-display-inline">Subparagraph (D) of
section 45D(f)(1) (relating to national limitation on amount of investments
designated) is amended by striking <quote>and 2008</quote> and inserting
<quote>2008, and 2009</quote>.</text>
</section><section commented="no" display-inline="no-display-inline" id="id7B8737085F384AABB481591B5FFB5A9A" section-type="subsequent-section"><enum>149.</enum><header display-inline="yes-display-inline">Extension of new energy efficient home
credit</header><text display-inline="no-display-inline">Subsection (g) of
section 45L (relating to termination) is amended by striking <quote>December
31, 2008</quote> and inserting <quote>December 31, 2009</quote>.</text>
</section><section display-inline="no-display-inline" id="id8FCAA6C6F7194634A682A4F913A18339"><enum>150.</enum><header>Extension of
mine rescue team training credit</header><text display-inline="no-display-inline">Section 45N(e) (relating to termination) is
amended by striking <quote>December 31, 2008</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</section><section id="H977F793DEBC54421B4FC922E41097EBF"><enum>151.</enum><header>Extension of
energy credit</header>
<subsection id="H693DD75D99B5480981AC600496B0015"><enum>(a)</enum><header>Solar energy
property</header><text>Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a)
(relating to energy credit) are each amended by striking <quote>January 1,
2009</quote> and inserting <quote>January 1, 2010</quote>.</text>
</subsection><subsection id="H2E65FDA4E91A4547948290BBE0BE206B"><enum>(b)</enum><header>Fuel cell
property</header><text>Subparagraph (E) of section 48(c)(1) (relating to
qualified fuel cell property) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection id="idCF9C74E6D90244A1BEF1C25750960387"><enum>(c)</enum><header>Microturbine
property</header><text>Subparagraph (E) of section 48(c)(2) (relating to
qualified microturbine property) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection></section><section id="id81C744C7113E46149C5C5F6C35FE38A5"><enum>152.</enum><header>5-year NOL
carryback for certain electric utility companies</header><text display-inline="no-display-inline">Subparagraph (I)(i) of section 172(b)(1)
(relating to transmission property and pollution control investment) is
amended—</text>
<paragraph id="idF7FC747A4A734025A01083BFB58357F1"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>January 1, 2009</quote>
and inserting <quote>January 1, 2010</quote>, and</text>
</paragraph><paragraph id="id0683CDEABF6643ACB2CC1FC5492FCE39"><enum>(2)</enum><text>by striking
<quote>January 1, 2006</quote> and inserting <quote>January 1,
2007</quote>.</text>
</paragraph></section><section commented="no" id="idAA7E21529A594F4081043DA43D502A11"><enum>153.</enum><header>Extension of
energy efficient commercial buildings deduction</header><text display-inline="no-display-inline">Section 179D(h) (relating to termination) is
amended by striking <quote>December 31, 2008</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</section><section display-inline="no-display-inline" id="id9B46DCE38067457F985335119B46C052"><enum>154.</enum><header>Extension of
election to expense advanced mine safety equipment</header><text display-inline="no-display-inline">Section
179E(g) (relating to termination) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2009</quote>.</text>
</section><section display-inline="no-display-inline" id="id67702DC1BEB24E7BB6AADD1ACBDBC885"><enum>155.</enum><header>Extension and
modification of expensing rules for qualified film and television
productions</header><text display-inline="no-display-inline">Section 181(f)
(relating to termination) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2009</quote>.</text>
</section><section id="ID5679FBC3740C43D5B67BD5EFABE46C8A"><enum>156.</enum><header>Subpart
<enum-in-header>F</enum-in-header> exception for active financing
income</header>
<subsection id="ID84C8D4E15F1B4A209EC5D250BB81FF14"><enum>(a)</enum><header>Exempt
insurance income</header><text>Paragraph (10) of section 953(e) (relating to
application) is amended—</text>
<paragraph id="IDBCE102C0DCB245CDA57C8599F9050A55"><enum>(1)</enum><text>by striking
<quote>January 1, 2009</quote> and inserting <quote>January 1, 2010</quote>,
and</text>
</paragraph><paragraph id="ID8047712002AD4EB5B474421F7ADB2733"><enum>(2)</enum><text>by striking
<quote>December 31, 2008</quote> and inserting <quote>December 31,
2009</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID582B3AF3290E4ED58F303195FF3BF392"><enum>(b)</enum><header>Exception to
treatment as foreign personal holding company income</header><text>Paragraph
(9) of section 954(h) (relating to application) is amended by striking
<quote>January 1, 2009</quote> and inserting <quote>January 1,
2010</quote>.</text>
</subsection></section><section id="ID43F6CC22F0FE44AB90CC69470A676BD8"><enum>157.</enum><header>Extension of
look-thru rule for related controlled foreign corporations</header><text display-inline="no-display-inline">Subparagraph (B) of section 954(c)(6)
(relating to application) is amended by striking <quote>January 1, 2009</quote>
and inserting <quote>January 1, 2010</quote>.</text>
</section></subpart></part><part id="id154C921FB38D45C1AF8B26AB5BEF6860"><enum>III</enum><header>Excise tax
provisions</header>
<subpart id="id63CD0CFB2164429188A5A493C4AC022F"><enum>A</enum><header>Provisions
expiring in 2007</header>
<section id="HD360BDD1E3094BE08E67FBD8EA22E8D7"><enum>161.</enum><header>Increase in
limit on cover over of rum excise tax to Puerto Rico and the Virgin
Islands</header>
<subsection id="HF82D70E407FE4F499C2157E93B304E00"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 7652(f) is amended by inserting
<quote>, and after the date of the enactment of the HOME Act and before January
1, 2010</quote> after <quote>January 1, 2008</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H3BAC33E3A1714815A033A998ECFF683F"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to distilled
spirits brought into the United States after the date of the enactment of this
Act.</text>
</subsection></section><section id="H59F20A817A804EDD9B790388F6DC60D8"><enum>162.</enum><header>Parity in the
application of certain limits to mental health benefits</header>
<subsection id="HF64935DC2C43466290FFF65F69F9873E"><enum>(a)</enum><header>In
general</header><text>Subsection (f) of section 9812 (relating to application
of section) is amended—</text>
<paragraph id="id93AD68A8788246169E7C6A0292969133"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of paragraph (2),</text>
</paragraph><paragraph id="idF2FEA656DB9D4131A0DDCB5DE2C1ACC9"><enum>(2)</enum><text>by striking the
period at the end of paragraph (3) and inserting <quote>, and before the date
of the enactment of the HOME Act</quote>, and</text>
</paragraph><paragraph id="idE7E97B329D0E476FA461C4621EAD4359"><enum>(3)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block act-name="" id="id479F65B1216943468AD1BB957FEEA989" style="OLC">
<paragraph id="idC8BCC0A571C04F9294EEFA6ABC3145B7"><enum>(4)</enum><text>after December
31,
2009.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id2001F3BFA2DE4591B74D57B96823456E"><enum>(b)</enum><header>Amendment to
the Employee Retirement Income Security Act of 1974</header><text>Section
712(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1185a(f)) is amended by inserting <quote>, and before the date of the enactment
of the HOME Act, and after December 31, 2009</quote> after <quote>December 31,
2007</quote>.</text>
</subsection><subsection id="idFE76426AF94240FDA93A044B27378BA7"><enum>(c)</enum><header>Amendment to
the Public Health Service Act</header><text>Section 2705(f) of the Public
Health Service Act (42 U.S.C. 300gg-5(f)) is amended by inserting <quote>, and
before the date of the enactment of the HOME Act, and after December 31,
2009</quote> after <quote>December 31, 2006</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HE2A6539D60CC40AE9CC3CFAB9CF8BABF"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to benefits
for services furnished on or after the date of the enactment of this
Act.</text>
</subsection></section><section id="H95EED196C3BB40E59CAC7D5E65FA788C"><enum>163.</enum><header>Extension of
economic development credit for American Samoa</header>
<subsection id="HD72B97E896114B98914481F315A69111"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (d) of
section 119 of division A of the Tax Relief and Health Care Act of 2006 is
amended—</text>
<paragraph id="H450099B466294B98A8E0D94F79DEEC8"><enum>(1)</enum><text>by
striking <quote>first two taxable years</quote> and inserting <quote>first 4
taxable years</quote>, and</text>
</paragraph><paragraph id="HC294B4BACE7C46C6AD6E8C02C869734B"><enum>(2)</enum><text>by striking
<quote>January 1, 2008</quote> and inserting <quote>January 1,
2010</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HF3ED8E784D594A4700D9A7021D03D431"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section></subpart><subpart id="idDDBFB8AA202D4F4182383BBD832509A5"><enum>B</enum><header>Provisions
expiring in 2008</header>
<section id="idFD3C6F2682574918802ADC83FDD43542"><enum>166.</enum><header>Special rule
for qualified methanol or ethanol fuel from coal</header><text display-inline="no-display-inline">Subparagraph (D) of section 4041(b)(2)
(relating to termination) is amended by striking <quote>January 1, 2009</quote>
and inserting <quote>January 1, 2010</quote>.</text>
</section><section id="id760A04B88C0241DD965ADFB2CE72ED17"><enum>167.</enum><header>Biodiesel
mixture credit and credit for fuels used for nontaxable purposes</header>
<subsection id="id742D0494F76C4796B923375FA7A030A0"><enum>(a)</enum><header>Biodiesel
mixtures</header><text display-inline="yes-display-inline">Paragraph (6) of
section 6426(c) (relating to termination) is amended by striking
<quote>December 31, 2008</quote> and inserting <quote>December 31,
2009</quote>.</text>
</subsection><subsection id="id49B462ABED2344FBB0B348C9913FE312"><enum>(b)</enum><header>Biodiesel used
for nontaxable purposes</header><text>Paragraph (5)(B) of section 6427(e)
(relating to termination) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection></section></subpart></part><part id="id199314491446420489D7086B97214367"><enum>IV</enum><header>Tax
administration provisions</header>
<subpart id="id4CFBE16025A24E86ADEE17A92E344B99"><enum>A</enum><header>Provisions
expiring in 2007</header>
<section commented="no" id="idDEBADC9345D5461AA06BB800D2FF2FA2"><enum>171.</enum><header>Disclosures to
facilitate combined employment tax reporting</header>
<subsection commented="no" id="idEE0EC188A4414EF48AFF1B05B62EDAF7"><enum>(a)</enum><header>In
general</header><text>Subparagraph (B) of section 6103(d)(5) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" id="id0F7504DBB54C45B58A6D3775333C57BB"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
disclosures after the date of the enactment of this Act.</text>
</subsection></section><section id="HCCBC84DF674B459D987009A68BBADAB3"><enum>172.</enum><header>Disclosure of
return information to apprise appropriate officials of terrorist
activities</header>
<subsection id="H123956A07B1046B39DAAA25317865832"><enum>(a)</enum><header>In
general</header><text>Clause (iv) of section 6103(i)(3)(C) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H044A0C74042A4F159900886EC6872CF7"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
disclosures after the date of the enactment of this Act.</text>
</subsection></section><section id="H861F113D5C6847F300E85DE3251E0251"><enum>173.</enum><header>Disclosure upon
request of information relating to terrorist activities</header>
<subsection id="H33D43C21EEDA4BD6938F8301A33D991B"><enum>(a)</enum><header>In
general</header><text>Subparagraph (E) of section 6103(i)(7) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection id="HD5A4373760014A61B3256D4C810056EF"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
disclosures after the date of the enactment of this Act.</text>
</subsection></section><section id="idBE81CCCF33F34F5A9A926805DA08E235"><enum>174.</enum><header>Disclosure of
return information to carry out income contingent repayment of student
loans</header>
<subsection id="id27CC66793CB2436D9D358B8D60D2A222"><enum>(a)</enum><header>In
general</header><text>Subparagraph (D) of section 6103(l)(13) (relating to
termination) is amended by striking <quote>December 31, 2007</quote> and
inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection id="id03ACFDFCC9D449F38F742F5AADF4D41B"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to
disclosures after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" id="HD8AA2CDE5BDF4DA5B94635B915B26790"><enum>175.</enum><header>Authority for
undercover operations</header>
<subsection commented="no" id="id6584697BF0FE4717B5DAAB3902D2648B"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (6) of
section 7608(c) (relating to application of section) is amended by striking
<quote>January 1, 2008</quote> each place it appears and inserting
<quote>January 1, 2010</quote>.</text>
</subsection><subsection commented="no" id="id473E4662C2A94154BE27ED34510D9202"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to operations conducted after the date of the
enactment of this Act.</text>
</subsection></section></subpart><subpart id="id713436ED0D584A5E9DE68474332C7EE1"><enum>B</enum><header>Provisions
expiring in 2008</header>
<section display-inline="no-display-inline" id="id982EED10003643B4AF06E6ABF6CD780F" section-type="subsequent-section"><enum>176.</enum><header>Extension of
reporting of interest of exempt organizations in insurance
contracts</header><text display-inline="no-display-inline">Section 6050V(e)
(relating to termination) is amended by striking <quote>the date which is 2
years after the date of the enactment of this section</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</section><section id="id2AF6810BB9014097A7FD75147E520D99"><enum>177.</enum><header>Disclosures
relating to certain programs administered by the Department of Veterans
Affairs</header>
<subsection id="id7B8374F2537E45C8822A366EBEBE87C9"><enum>(a)</enum><header>In
general</header><text>Section 6103(l)(7)(D) (relating to programs to which rule
applies) is amended by striking <quote>September 30, 2008</quote> and inserting
<quote>December 31, 2009</quote>.</text>
</subsection><subsection id="idE573DD248F0444229F4A5D356CEA7D9B"><enum>(b)</enum><header>Technical
amendment</header><text>Section 6103(l)(7)(D)(viii)(III) is amended by striking
<quote>sections 1710(a)(1)(I), 1710(a)(2), 1710(b), and 1712(a)(2)(B)</quote>
and inserting <quote>sections 1710(a)(2)(G), 1710(a)(3), and
1710(b)</quote>.</text>
</subsection></section></subpart></part></subtitle><subtitle id="idCC99AA0C729C4277A26D7FE9164EA4BE"><enum>B</enum><header>Alternative
minimum tax relief</header>
<section id="id57004F66FB5844C4A82736FB14399EC1"><enum>181.</enum><header>2-year
extension of increased alternative minimum tax exemption amount</header>
<subsection id="id36BF81C30CEF40B59C331759AAF523DB"><enum>(a)</enum><header>In
general</header><text>Section 55(d)(1) is amended—</text>
<paragraph id="id13B759B9121D4934BA262A9B737C51C6"><enum>(1)</enum><text>by striking
<quote>$66,250</quote> and all that follows through <quote>2007</quote> in
subparagraph (A) and inserting <quote>the joint return amount in the case of
taxable years beginning in 2008 and 2009</quote>, and</text>
</paragraph><paragraph id="id15BCE9059FED4F92844CF15FC804EE18"><enum>(2)</enum><text>by striking
<quote>$44,350</quote> and all that follows through <quote>2007</quote> in
subparagraph (B) and inserting <quote>the unmarried individual return amount in
the case of taxable years beginning in 2008 and 2009</quote>.</text>
</paragraph></subsection><subsection id="id7C142D1EC46A4469BB93DF90CAC1ADF1"><enum>(b)</enum><header>Joint return
amount; unmarried individual return amount</header><text>Section 55(d) is
amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idC4ADE25754A04C5A94DC4447140B7621" style="OLC">
<paragraph id="idEE570824672841EB9FCA3C0F32647E02"><enum>(4)</enum><header>Joint return
amount; unmarried individual return amount</header>
<subparagraph id="id85C2206F653045F4A715C3F826BE1169"><enum>(A)</enum><header>Joint return
amount</header><text>For purposes of paragraph (1)(A), the joint return amount
shall be—</text>
<clause id="idF44CDD8F9BA14FB8871854B3C9BD7609"><enum>(i)</enum><text>$69,950 for
taxable years beginning in 2008, and</text>
</clause><clause id="idB13BA124DB8543398447D5F99DA379BF"><enum>(ii)</enum><text>$73,250 for
taxable year beginning in 2009.</text>
</clause></subparagraph><subparagraph id="idB7B537071BD5416AADCE3617F4A8078D"><enum>(B)</enum><header>Unmarried
individual return amount</header><text>For purposes of paragraph (1)(B), the
unmarried individual return amount shall be—</text>
<clause id="id757CDAEE3FCF4C2FB4FD810BC0AB4D2B"><enum>(i)</enum><text>$46,200 for
taxable years beginning in 2008, and</text>
</clause><clause id="idE47381F351B64C95AFF6394D2D975A8A"><enum>(ii)</enum><text>$47,850 for
taxable year beginning in
2009.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idFE4193A8B1114F35BC5CDFF10FF3EB5D"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section id="idBCFAA3BF37B341A49436141FC5B525BE"><enum>182.</enum><header>Extension of
alternative minimum tax relief for nonrefundable personal credits</header>
<subsection id="idA414B6B9CCED49F4A15629C7A4D06581"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (2) of
section 26(a) is amended—</text>
<paragraph id="id5B0F66751B7248EC861AF5D53A9A472F"><enum>(1)</enum><text>by striking
<quote>or 2007</quote> and inserting <quote>2007, 2008, or 2009</quote>,
and</text>
</paragraph><paragraph id="id58DAB5B01EF84A8384BE522225D1D202"><enum>(2)</enum><text>by striking
<quote>2007</quote> in the heading thereof and inserting
<quote>2009</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id13494D7DF3C84073A3B7624421AB5E06"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section></subtitle><subtitle id="idA764D6FBFCEF4CAAB52FE2B7BA528788"><enum>C</enum><header>Additional tax
relief</header>
<section id="id4E317D1E41014CA7AAED88E1C483A778"><enum>191.</enum><header>Permanent
extension of 2001 and 2003 tax relief provisions</header>
<subsection id="id986DAA4E6EBC44C5854FBC5853700E61"><enum>(a)</enum><header>Economic Growth
and Tax Relief Reconciliation Act of 2001</header><text>Title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001 (relating to
compliance with Congressional Budget Act) is repealed.</text>
</subsection><subsection id="idB199EE8235EA4519BB1F5F20B576EA64"><enum>(b)</enum><header>Jobs and Growth
Tax Relief Reconciliation Act of 2003</header><text>Title III of the Jobs and
Growth Tax Relief Reconciliation Act of 2003 is amended by striking section
303.</text>
</subsection></section><section id="H670C03A8F1934937BFA30709FC125E81"><enum>192.</enum><header>Maximum
corporate income tax rate reduced to 25 percent</header>
<subsection id="H3F87A28E30684B069D2DFDCC60151C0"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Paragraph (1) of
section 11(b) (relating to amount of tax on corporations) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="HD008FA8A251945729ECE97D800A3E5C" style="OLC">
<paragraph id="H1EF91C94E7FA4AF8867C9642FE2D8FF0"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The amount of the tax
imposed by subsection (a) shall be the sum of—</text>
<subparagraph id="HCC0E275EFE444150A0005086B2A1679"><enum>(A)</enum><text>15 percent of so
much of the taxable income as does not exceed $50,000, and</text>
</subparagraph><subparagraph id="H3768B19B83054531931671C13300D7F4"><enum>(B)</enum><text>25 percent of so
much of the taxable income as exceeds
$50,000.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H97072FE7306D41809829E6591900186C"><enum>(b)</enum><header>Personal service
corporations</header><text>Paragraph (2) of section 11(b) is amended by
striking <quote>35 percent</quote> and inserting <quote>25
percent</quote>.</text>
</subsection><subsection id="H1F3EDFF0F03246B6BA8E82E2FFB1986C"><enum>(c)</enum><header>Conforming
amendments</header><text display-inline="yes-display-inline">Paragraphs (1) and
(2) of section 1445(e) are each amended by striking <quote>35 percent</quote>
and inserting <quote>25 percent</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HA004900E5FCA4EB3ACD2B0882733C029"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2008, except that the amendments made by
subsection (c) shall take effect on January 1, 2009.</text>
</subsection></section><section id="id799CC784328744EE803CEF4203808438"><enum>193.</enum><header>3-year
carryback of certain credits</header>
<subsection id="IDc51f5ea5e869402398bb35cb39dfacfd"><enum>(a)</enum><header>General
Business Credit</header><text>Subsection (a) of section 39 is amended by adding
at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idE9AC7DBE464C4C678A795D2D5D4E4294" style="OLC">
<paragraph id="ID36a2fb7844c64c9498b17773fdbb997f"><enum>(4)</enum><header>Special rule
for 2007, 2008, and 2009</header><text>In the case of an excess described in
paragraph (1) arising in a taxable year beginning in 2007, 2008, or
2009—</text>
<subparagraph id="ID6a6ccaa6881f4fd2ac205ecc0ef6b074"><enum>(A)</enum><text>paragraph (1)(A)
shall be applied by substituting <quote>each of the 3 taxable years</quote> for
`<quote>the taxable year</quote>,</text>
</subparagraph><subparagraph id="IDdf83cb5b038d45649ea9c1e4059dc64b"><enum>(B)</enum><text>paragraphs (2)(A)
and (3)(C)(i) shall each be applied by substituting <quote>23 taxable
years</quote> for <quote>21 taxable years</quote>, and</text>
</subparagraph><subparagraph id="ID29a1e1ae57c04d1fa0f9b05481c83a41"><enum>(C)</enum><text>paragraphs (2)(B)
and (3)(C)(ii) shall be applied by substituting <quote>23 taxable years</quote>
for <quote>20 taxable
years</quote>.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID3cfb142e880f4a6da5e47b4b8ac0798b"><enum>(b)</enum><header>Foreign Tax
Credit</header>
<paragraph id="idA9FC5343276847B4B1E9DB59253A6892"><enum>(1)</enum><header>In
general</header><text>Section 904(c) is amended by adding at the end thereof
the following: <quote>In the case of taxable years beginning in 2007, 2008, or
2009, the first sentence of this subsection shall, at the election of the
taxpayer, be applied by substituting <quote>in the third preceding taxable
year, the second preceding taxable year, the first preceding taxable
year</quote> for <quote>the first preceding taxable
year</quote>.</quote>.</text>
</paragraph><paragraph commented="no" id="id39C6AEBF783049BA988821FEF574DBC7"><enum>(2)</enum><header>Application of
special refund rules</header><text>Section 6411 (relating to tentative
carryback and refund adjustments) is amended by redesignating subsection (d) as
subsection (e) and by inserting after subsection (c) the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id6080BDCBCA234F6D8F5214688649D4AC" style="OLC">
<subsection commented="no" id="id7D54860ECAB840D4806190F58AC78EB3"><enum>(d)</enum><header>Application to
foreign tax credit carryback</header><text>Under rules prescribed by the
Secretary, in the case of taxable years beginning in 2007, 2008, and 2009, this
section shall apply with respect to a foreign tax credit carryback provided in
section 904(c) in the same manner as this section applies with respect to net
operating loss carrybacks provided in section 172(b), business credit
carrybacks provided in section 39, and capital loss carrybacks provided in
subsection (a)(1) or (c) of section
1212.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idD4369B1B3E18464F9F5452191F427133"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to general
business credits and foreign tax credits arising in taxable years beginning
after December 31, 2006.</text>
</subsection></section><section id="idF89CCCFE327E41798DB84F05EEA6B694"><enum>194.</enum><header>Election to
accelerate AMT and R and D credits in lieu of bonus depreciation</header>
<subsection id="idFACE3A0D63B64958B70A0B8766F6C2BE"><enum>(a)</enum><header>In
general</header><text>Section 168(k) is amended by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id87A0F04055634B719B3684C47E82BC42" style="OLC">
<paragraph id="id0839B039A65D408780626BDFA26DBA73"><enum>(4)</enum><header>Election to
accelerate AMT and R and D credits in lieu of bonus depreciation</header>
<subparagraph id="id9E6587149880482C87185FE68E2B557A"><enum>(A)</enum><header>In
general</header><text>If a corporation elects to have this paragraph apply
—</text>
<clause id="id047357ACD812480BABCB6D76451BFC41"><enum>(i)</enum><text>no additional
depreciation shall be allowed under paragraph (1) for any property placed in
service during the taxable year, and</text>
</clause><clause id="idE53F7CD6298A4CA2B4D070A909C40C7E"><enum>(ii)</enum><text>the limitations
described in subparagraph (B) for such taxable year shall be increased by an
aggregate amount not in excess of the bonus depreciation amount for such
taxable year.</text>
</clause></subparagraph><subparagraph id="idC4085FCA782C426A9569315A28771BC7"><enum>(B)</enum><header>Limitations to
be increased</header><text>The limitations described in this subparagraph
are—</text>
<clause id="idC91083F32DC143C9BA6CDD7709AC3708"><enum>(i)</enum><text>the limitation
under section 38(c), and</text>
</clause><clause id="idE8E201036C9A4914B869597EA11115BE"><enum>(ii)</enum><text>the limitation
under section 53(c).</text>
</clause></subparagraph><subparagraph id="id7001BAD9774F4511BDDE7E2193AAE53B"><enum>(C)</enum><header>Bonus
depreciation amount</header><text>For purposes of this paragraph—</text>
<clause id="id53EF2BABE0834A06A473776CE198EA21"><enum>(i)</enum><header>In
general</header><text>The bonus depreciation amount for any taxable year is an
amount equal to the product of the applicable percentage and the excess (if
any) of—</text>
<subclause id="id544A5E6A058C45EC8A09C30D8A469799"><enum>(I)</enum><text>the aggregate
amount of depreciation which would be determined under this section for
property placed in service during the taxable year if no election under this
paragraph were made, over</text>
</subclause><subclause id="id3579F24654E341D9BE813C63246F4352"><enum>(II)</enum><text>the aggregate
amount of depreciation allowable under this section for property placed in
service during the taxable year.</text>
</subclause></clause><clause id="id9179738BEE0D48139AA1D2E8755946CB"><enum>(ii)</enum><header>Applicable
percentage</header><text>For purposes of clause (i), the applicable percentage
shall be—</text>
<subclause id="idF2CCE575804F4A419EB4B11985A109D3"><enum>(I)</enum><text>30 percent in the
case of the limitation under section 38(c), and</text>
</subclause><subclause id="idAF599A563C1347398F7E1CE6CB667D8E"><enum>(II)</enum><text>20 percent in
the case of the limitation under section 53(c).</text>
</subclause></clause></subparagraph><subparagraph id="id877C23C1919E4BC6AD162AFC197F9141"><enum>(D)</enum><header>Allocation of
bonus depreciation amounts</header>
<clause id="idC0EEA95C0E9945B397146644AB74F453"><enum>(i)</enum><header>In
general</header><text>Subject to clauses (ii) and (iii), the taxpayer shall, at
such time and in such manner as the Secretary may prescribe, specify the
portion (if any) of the bonus depreciation amount which is to be allocated to
each of the limitations described in subparagraph (B).</text>
</clause><clause id="id341725B414AB477585840EE44966A894"><enum>(ii)</enum><header>Business
credit limitation</header><text>The portion of the bonus depreciation amount
allocated to the limitation described in subparagraph (B)(i) shall not exceed
an amount equal to the portion of the credit allowable under section 38 for the
taxable year which is allocable to business credit carryforwards to such
taxable year which are—</text>
<subclause id="id0714E06C46634738B5EB78F139F55DC3"><enum>(I)</enum><text>from taxable
years beginning before January 1, 2006, and</text>
</subclause><subclause id="id604C1A7E941C42D0AB64457BCAF4CCC6"><enum>(II)</enum><text>properly
allocable (determined under the rules of section 38(d)) to the research credit
determined under section 41(a).</text>
</subclause></clause><clause id="idD988EFD0897D41B6A4AE3A9D46EB96FC"><enum>(iii)</enum><header>Alternative
minimum tax credit limitation</header><text>The portion of the bonus
depreciation amount allocated to the limitation described in subparagraph
(B)(ii) shall not exceed an amount equal to the portion of the minimum tax
credit allowable under section 53 for the taxable year which is allocable to
the adjusted minimum tax imposed for taxable years beginning before January 1,
2006.</text>
</clause></subparagraph><subparagraph id="id75E17BE3440147E88937346FBFF269AE"><enum>(E)</enum><header>Credit
refundable</header><text>Any aggregate increases in the credits allowed under
section 38 or 53 by reason of this paragraph shall, for purposes of this title,
be treated as a credit allowed to the taxpayer under subpart C of part IV of
subchapter A.</text>
</subparagraph><subparagraph id="idCE3040A9CDDA49DF91BA5A63979E526D"><enum>(F)</enum><header>Other
rules</header>
<clause id="id7D6ED7C3CCD940AC990266688842298E"><enum>(i)</enum><header>Election</header><text>Any
election under this paragraph (including any allocation under subparagraph (D))
may be revoked only with the consent of the Secretary.</text>
</clause><clause id="id158C2242F0E944C0B14B1F560B7749E6"><enum>(ii)</enum><header>Deduction
allowed in computing minimum tax</header><text>Notwithstanding this paragraph,
paragraph (2)(G) shall apply with respect to the deduction computed under this
section (after application of this paragraph) with respect to property placed
in service during any applicable taxable
year.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id38FEFF6F086F4775AB2E5974C6F0B558"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after December 31, 2007, in taxable years ending after such
date.</text>
</subsection></section><section display-inline="no-display-inline" id="H59573FA148F041D2B5DC779605B8D3DE"><enum>195.</enum><header>Indexing of
certain assets for purposes of determining gain or loss</header>
<subsection id="H957C0CFB45AA4B6B9CC1FC9723D5573E"><enum>(a)</enum><header>In
General</header><text>Part II of subchapter O of chapter 1 (relating to basis
rules of general application) is amended by redesignating section 1023 as
section 1024 and by inserting after section 1022 the following new
section:</text>
<quoted-block id="HC0A4B7C196A54F4B8C9E0524ABBB8292" style="OLC">
<section id="H127E2E0296F64BE88C072CEE19F32F39"><enum>1023.</enum><header>Indexing of
certain assets for purposes of determining gain or loss</header>
<subsection id="HA0B5D14A24BF4E288160B4618B951094"><enum>(a)</enum><header>General
rule</header>
<paragraph id="H4B0CD4C58BD6478F9439A8E763C405AE"><enum>(1)</enum><header>Indexed basis
substituted for adjusted basis</header><text>Solely for purposes of determining
gain or loss on the sale or other disposition by a taxpayer (other than a
corporation) of an indexed asset which has been held for more than 3 years, the
indexed basis of the asset shall be substituted for its adjusted basis.</text>
</paragraph><paragraph id="H39214D60AED64846BEB988075C48313D"><enum>(2)</enum><header>Exception for
depreciation, etc</header><text>The deductions for depreciation, depletion, and
amortization shall be determined without regard to the application of paragraph
(1) to the taxpayer or any other person.</text>
</paragraph><paragraph id="H26443ADB38134A33A212B0EC9E1E6B45"><enum>(3)</enum><header>Written
documentation requirement</header><text>Paragraph (1) shall apply only with
respect to indexed assets for which the taxpayer has written documentation of
the original purchase price paid or incurred by the taxpayer to acquire such
asset.</text>
</paragraph></subsection><subsection id="HB9F2B09EA8DA4661BBDAD656FEF2EE35"><enum>(b)</enum><header>Indexed
asset</header>
<paragraph id="H08DE5BE14C0C4092AFEB82A5FBF679A"><enum>(1)</enum><header>In
general</header><text>For purposes of this section, the term <term>indexed
asset</term> means—</text>
<subparagraph id="H0A7C7257FF1D41238C5C17DB4BAA7D2D"><enum>(A)</enum><text>common stock in a
C corporation (other than a foreign corporation), or</text>
</subparagraph><subparagraph id="H29BB3EC12047449D8551A5A8415FEC3C"><enum>(B)</enum><text>tangible
property,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">which is a
capital asset or property used in the trade or business (as defined in section
1231(b)).</continuation-text></paragraph><paragraph id="HDACFE099BCD040F590885719C11C767B"><enum>(2)</enum><header>Stock in certain
foreign corporations included</header><text>For purposes of this
section—</text>
<subparagraph id="H0CB70FE7A5EA4163A511350284B137B6"><enum>(A)</enum><header>In
general</header><text>The term <term>indexed asset</term> includes common stock
in a foreign corporation which is regularly traded on an established securities
market.</text>
</subparagraph><subparagraph id="HD6A90044DB134F40B585A9BAEA9F6B5F"><enum>(B)</enum><header>Exception</header><text>Subparagraph
(A) shall not apply to—</text>
<clause id="HD1CA6FBF42004A1B00E377947F6359A8"><enum>(i)</enum><text>stock in a passive
foreign investment company (as defined in section 1296), and</text>
</clause><clause id="HAAD2297571C44BF6AD681669F09D2176"><enum>(ii)</enum><text>stock in a
foreign corporation held by a United States person who meets the requirements
of section 1248(a)(2).</text>
</clause></subparagraph><subparagraph id="H25B9EB6D50734F65BDC47E3EB235EC31"><enum>(C)</enum><header>Treatment of
American depository receipts</header><text>An American depository receipt for
common stock in a foreign corporation shall be treated as common stock in such
corporation.</text>
</subparagraph></paragraph></subsection><subsection id="H4AA87B25A2A8426D815F4BADB405D7F5"><enum>(c)</enum><header>Indexed
basis</header><text>For purposes of this section—</text>
<paragraph id="H527599403DA74B1991115B84D40095AB"><enum>(1)</enum><header>General
rule</header><text>The indexed basis for any asset is—</text>
<subparagraph id="H94D8FE2746744F10B49D1B0267F9D3DD"><enum>(A)</enum><text>the adjusted basis
of the asset, increased by</text>
</subparagraph><subparagraph id="HC0EB62956CF9472181F7A798272A29F"><enum>(B)</enum><text>the applicable
inflation adjustment.</text>
</subparagraph></paragraph><paragraph id="H4D6BACF1373C4FAE98ECADCA81F23F78"><enum>(2)</enum><header>Applicable
inflation adjustment</header><text>The applicable inflation adjustment for any
asset is an amount equal to—</text>
<subparagraph id="HB6337333239647E695F498AC8D4E905E"><enum>(A)</enum><text>the adjusted basis
of the asset, multiplied by</text>
</subparagraph><subparagraph id="HE9EA2B82FE35470EBFD429C2AF00B180"><enum>(B)</enum><text>the percentage (if
any) by which—</text>
<clause id="H2B3E608D89004D79BC42BC9905114EF2"><enum>(i)</enum><text>the gross domestic
product deflator for the last calendar quarter ending before the asset is
disposed of, exceeds</text>
</clause><clause id="HAEFB96F18AB349B7B779A334104D7F41"><enum>(ii)</enum><text>the gross
domestic product deflator for the last calendar quarter ending before the asset
was acquired by the taxpayer.</text>
</clause></subparagraph><continuation-text continuation-text-level="paragraph">The
percentage under subparagraph (B) shall be rounded to the nearest
<fraction>1/10</fraction> of 1 percentage point.</continuation-text></paragraph><paragraph id="HE11F3D265E8B4A5282259423C5506F42"><enum>(3)</enum><header>Gross domestic
product deflator</header><text>The gross domestic product deflator for any
calendar quarter is the implicit price deflator for the gross domestic product
for such quarter (as shown in the last revision thereof released by the
Secretary of Commerce before the close of the following calendar
quarter).</text>
</paragraph></subsection><subsection id="H305E5DA9CED54F82BED86FCDADAEC2A5"><enum>(d)</enum><header>Suspension of
holding period where diminished risk of loss; treatment of short sales</header>
<paragraph id="H48B6C6B530554F878BA32F10488B00E3"><enum>(1)</enum><header>In
general</header><text>If the taxpayer (or a related person) enters into any
transaction which substantially reduces the risk of loss from holding any
asset, such asset shall not be treated as an indexed asset for the period of
such reduced risk.</text>
</paragraph><paragraph id="H9D053F494D16499E9DA6D3FDDE56E969"><enum>(2)</enum><header>Short
sales</header>
<subparagraph id="H314688342E514D5389D54F103ED1B688"><enum>(A)</enum><header>In
general</header><text>In the case of a short sale of an indexed asset with a
short sale period in excess of 3 years, for purposes of this title, the amount
realized shall be an amount equal to the amount realized (determined without
regard to this paragraph) increased by the applicable inflation adjustment. In
applying subsection (c)(2) for purposes of the preceding sentence, the date on
which the property is sold short shall be treated as the date of acquisition
and the closing date for the sale shall be treated as the date of
disposition.</text>
</subparagraph><subparagraph id="HB596A472095E4F7EA71EC235882C03AC"><enum>(B)</enum><header>Short sale
period</header><text>For purposes of subparagraph (A), the short sale period
begins on the day that the property is sold and ends on the closing date for
the sale.</text>
</subparagraph></paragraph></subsection><subsection id="HD934FFDAEEC34394B548A0F796B9D09"><enum>(e)</enum><header>Treatment of
regulated investment companies and real estate investment trusts</header>
<paragraph id="H0C25D5FF70004DD4A65401F5007E6BA"><enum>(1)</enum><header>Adjustments at
entity level</header>
<subparagraph id="H7884B488E463467598B82CB9E732CE88"><enum>(A)</enum><header>In
general</header><text>Except as otherwise provided in this paragraph, the
adjustment under subsection (a) shall be allowed to any qualified investment
entity (including for purposes of determining the earnings and profits of such
entity).</text>
</subparagraph><subparagraph id="H2D204BA38518491295EF86A8F500796E"><enum>(B)</enum><header>Exception for
corporate shareholders</header><text>Under regulations—</text>
<clause id="HCAF6A0001BBA40ABBC8DA15F0273928C"><enum>(i)</enum><text>in
the case of a distribution by a qualified investment entity (directly or
indirectly) to a corporation—</text>
<subclause id="HFD441187F1C447B9AD9900DF883B4179"><enum>(I)</enum><text>the determination
of whether such distribution is a dividend shall be made without regard to this
section, and</text>
</subclause><subclause id="H967F0368A3FD4CBB848BF48DFBB53F50"><enum>(II)</enum><text>the amount
treated as gain by reason of the receipt of any capital gain dividend shall be
increased by the percentage by which the entity’s net capital gain for the
taxable year (determined without regard to this section) exceeds the entity’s
net capital gain for such year determined with regard to this section,
and</text>
</subclause></clause><clause id="H893BEF58C26445F3826B226F37080340"><enum>(ii)</enum><text>there shall be
other appropriate adjustments (including deemed distributions) so as to ensure
that the benefits of this section are not allowed (directly or indirectly) to
corporate shareholders of qualified investment entities.</text>
</clause><continuation-text continuation-text-level="subparagraph">For
purposes of the preceding sentence, any amount includible in gross income under
section 852(b)(3)(D) shall be treated as a capital gain dividend and an S
corporation shall not be treated as a corporation.</continuation-text></subparagraph><subparagraph id="H8D221405F8D44241B3E8BCDB0189FAC"><enum>(C)</enum><header>Exception for
qualification purposes</header><text>This section shall not apply for purposes
of sections 851(b) and 856(c).</text>
</subparagraph><subparagraph id="H771DF6F921E544BFAE7E818653F0ADEB"><enum>(D)</enum><header>Exception for
certain taxes imposed at entity level</header>
<clause id="H2A5B14ABE17F4D2DABF77ECC9710F683"><enum>(i)</enum><header>Tax on failure
to distribute entire gain</header><text>If any amount is subject to tax under
section 852(b)(3)(A) for any taxable year, the amount on which tax is imposed
under such section shall be increased by the percentage determined under
subparagraph (B)(i)(II). A similar rule shall apply in the case of any amount
subject to tax under paragraph (2) or (3) of section 857(b) to the extent
attributable to the excess of the net capital gain over the deduction for
dividends paid determined with reference to capital gain dividends only. The
first sentence of this clause shall not apply to so much of the amount subject
to tax under section 852(b)(3)(A) as is designated by the company under section
852(b)(3)(D).</text>
</clause><clause id="HB03E43723CE349949865FB7630D10113"><enum>(ii)</enum><header>Other
taxes</header><text>This section shall not apply for purposes of determining
the amount of any tax imposed by paragraph (4), (5), or (6) of section
857(b).</text>
</clause></subparagraph></paragraph><paragraph id="H96F8917232DD43C800A987CB947C0053"><enum>(2)</enum><header>Adjustments to
interests held in entity</header>
<subparagraph id="H524FC3A5042F48228ED79C7C59F7CEC6"><enum>(A)</enum><header>Regulated
investment companies</header><text>Stock in a regulated investment company
(within the meaning of section 851) shall be an indexed asset for any calendar
quarter in the same ratio as—</text>
<clause id="HB9833E88FFB44A4085F5646906DCFF76"><enum>(i)</enum><text>the average of the
fair market values of the indexed assets held by such company at the close of
each month during such quarter, bears to</text>
</clause><clause id="HEFEBCF29F7114CFB8488E00906B30002"><enum>(ii)</enum><text>the average of
the fair market values of all assets held by such company at the close of each
such month.</text>
</clause></subparagraph><subparagraph id="H5558157AB2F043CBB621EC2732766573"><enum>(B)</enum><header>Real estate
investment trusts</header><text>Stock in a real estate investment trust (within
the meaning of section 856) shall be an indexed asset for any calendar quarter
in the same ratio as—</text>
<clause id="H2DCC47E34B654F0B98D300E67BE28C35"><enum>(i)</enum><text>the fair market
value of the indexed assets held by such trust at the close of such quarter,
bears to</text>
</clause><clause id="H757860038B80420593396847C4D8213"><enum>(ii)</enum><text>the fair market
value of all assets held by such trust at the close of such quarter.</text>
</clause></subparagraph><subparagraph id="HF97F08029A904F61A1E52F0100BC6F8"><enum>(C)</enum><header>Ratio of 80
percent or more</header><text>If the ratio for any calendar quarter determined
under subparagraph (A) or (B) would (but for this subparagraph) be 80 percent
or more, such ratio for such quarter shall be 100 percent.</text>
</subparagraph><subparagraph id="H0503C8FFD694405C8075EA9EF3E7B572"><enum>(D)</enum><header>Ratio of 20
percent or less</header><text>If the ratio for any calendar quarter determined
under subparagraph (A) or (B) would (but for this subparagraph) be 20 percent
or less, such ratio for such quarter shall be zero.</text>
</subparagraph><subparagraph id="HBA8B43F65BD94EF800E12242ADAC9C14"><enum>(E)</enum><header>Look-thru of
partnerships</header><text>For purposes of this paragraph, a qualified
investment entity which holds a partnership interest shall be treated (in lieu
of holding a partnership interest) as holding its proportionate share of the
assets held by the partnership.</text>
</subparagraph></paragraph><paragraph id="HB69A9339C9F549E4AC8C4612C92B5D8"><enum>(3)</enum><header>Treatment of
return of capital distributions</header><text>Except as otherwise provided by
the Secretary, a distribution with respect to stock in a qualified investment
entity which is not a dividend and which results in a reduction in the adjusted
basis of such stock shall be treated as allocable to stock acquired by the
taxpayer in the order in which such stock was acquired.</text>
</paragraph><paragraph id="HD419008E10C047139CE2D736F6004E53"><enum>(4)</enum><header>Qualified
investment entity</header><text>For purposes of this subsection, the term
<term>qualified investment entity</term> means—</text>
<subparagraph id="HA9A2B6527C01463988BD1179B394F667"><enum>(A)</enum><text>a regulated
investment company (within the meaning of section 851), and</text>
</subparagraph><subparagraph id="H8EBBC66E0E594C8BA1EF85B2A1CECB59"><enum>(B)</enum><text>a real estate
investment trust (within the meaning of section 856).</text>
</subparagraph></paragraph></subsection><subsection id="HC45DEDE228374BB88426043375317359"><enum>(f)</enum><header>Other pass-thru
entities</header>
<paragraph id="HB8520B90C4AF4DE99601A1CE881CCE0"><enum>(1)</enum><header>Partnerships</header>
<subparagraph id="H553178DA5E5746D6ACFEEB3EE5CAE008"><enum>(A)</enum><header>In
general</header><text>In the case of a partnership, the adjustment made under
subsection (a) at the partnership level shall be passed through to the
partners.</text>
</subparagraph><subparagraph id="H88B29F22E1274090856B492C8B00D4D4"><enum>(B)</enum><header>Special rule in
the case of section 754 elections</header><text>In the case of a transfer of an
interest in a partnership with respect to which the election provided in
section 754 is in effect—</text>
<clause id="H1D384E3400FE468899BBD55D440B8E1"><enum>(i)</enum><text>the
adjustment under section 743(b)(1) shall, with respect to the transferor
partner, be treated as a sale of the partnership assets for purposes of
applying this section, and</text>
</clause><clause id="H9C24999823A4483BAA00BE3FB0645C00"><enum>(ii)</enum><text>with respect to
the transferee partner, the partnership’s holding period for purposes of this
section in such assets shall be treated as beginning on the date of such
adjustment.</text>
</clause></subparagraph></paragraph><paragraph id="H282E7C6D60C1491DBE00EDE6DE917043"><enum>(2)</enum><header>S
corporations</header><text>In the case of an S corporation, the adjustment made
under subsection (a) at the corporate level shall be passed through to the
shareholders. This section shall not apply for purposes of determining the
amount of any tax imposed by section 1374 or 1375.</text>
</paragraph><paragraph id="H0A58E2C633544102962C4BE1CCC7DDFD"><enum>(3)</enum><header>Common trust
funds</header><text>In the case of a common trust fund, the adjustment made
under subsection (a) at the trust level shall be passed through to the
participants.</text>
</paragraph><paragraph id="HA3DD3A51B7D74FBE99DBAABD2704777C"><enum>(4)</enum><header>Indexing
adjustment disregarded in determining loss on sale of interest in
entity</header><text>Notwithstanding the preceding provisions of this
subsection, for purposes of determining the amount of any loss on a sale or
exchange of an interest in a partnership, S corporation, or common trust fund,
the adjustment made under subsection (a) shall not be taken into account in
determining the adjusted basis of such interest.</text>
</paragraph></subsection><subsection id="HCD3B1C52173C484FA3837120AAE98776"><enum>(g)</enum><header>Dispositions
between related persons</header>
<paragraph id="HB722D28C026F4312876E9F8F00E38430"><enum>(1)</enum><header>In
general</header><text>This section shall not apply to any sale or other
disposition of property between related persons except to the extent that the
basis of such property in the hands of the transferee is a substituted
basis.</text>
</paragraph><paragraph id="H31747202686B4DB789D48FD1A12CE2EA"><enum>(2)</enum><header>Related persons
defined</header><text>For purposes of this section, the term <term>related
persons</term> means—</text>
<subparagraph id="H9AB5E944FA734FA4945779C4BCB4DB8C"><enum>(A)</enum><text>persons bearing a
relationship set forth in section 267(b), and</text>
</subparagraph><subparagraph id="H9AB9BE887A844A34AEF3D0535CCA1D42"><enum>(B)</enum><text>persons treated as
single employer under subsection (b) or (c) of section 414.</text>
</subparagraph></paragraph></subsection><subsection id="HF889EDFEF24D4F71B5B7EE96817158B3"><enum>(h)</enum><header>Transfers To
increase indexing adjustment</header><text>If any person transfers cash, debt,
or any other property to another person and the principal purpose of such
transfer is to secure or increase an adjustment under subsection (a), the
Secretary may disallow part or all of such adjustment or increase.</text>
</subsection><subsection id="HFF2A2AD5327D47F0B36014662CB60F0"><enum>(i)</enum><header>Special
rules</header><text>For purposes of this section—</text>
<paragraph id="H2BFF8B5BD98A4359AB75B455BB621568"><enum>(1)</enum><header>Treatment of
improvements, etc</header><text>If there is an addition to the adjusted basis
of any tangible property or of any stock in a corporation during the taxable
year by reason of an improvement to such property or a contribution to capital
of such corporation—</text>
<subparagraph id="H54DFE15C05FB4018BBCB7F299DF073D5"><enum>(A)</enum><text>such addition
shall never be taken into account under subsection (c)(1)(A) if the aggregate
amount thereof during the taxable year with respect to such property or stock
is less than $1,000, and</text>
</subparagraph><subparagraph id="HF405353869AD4F0CB7BADFC7ACC41D10"><enum>(B)</enum><text>such addition
shall be treated as a separate asset acquired at the close of such taxable year
if the aggregate amount thereof during the taxable year with respect to such
property or stock is $1,000 or more.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">A rule
similar to the rule of the preceding sentence shall apply to any other portion
of an asset to the extent that separate treatment of such portion is
appropriate to carry out the purposes of this section.</continuation-text></paragraph><paragraph id="H40413838ED66497CB992C26D7374CA61"><enum>(2)</enum><header>Assets which are
not indexed assets throughout holding period</header><text>The applicable
inflation adjustment shall be appropriately reduced for periods during which
the asset was not an indexed asset.</text>
</paragraph><paragraph id="H0E2B0CAD003846D585563EE877E668E"><enum>(3)</enum><header>Treatment of
certain distributions</header><text>A distribution with respect to stock in a
corporation which is not a dividend shall be treated as a disposition.</text>
</paragraph><paragraph id="H6F9A6474FEA2436CACFFB6B8286652CA"><enum>(4)</enum><header>Section cannot
increase ordinary loss</header><text>To the extent that (but for this
paragraph) this section would create or increase a net ordinary loss to which
section 1231(a)(2) applies or an ordinary loss to which any other provision of
this title applies, such provision shall not apply. The taxpayer shall be
treated as having a long-term capital loss in an amount equal to the amount of
the ordinary loss to which the preceding sentence applies.</text>
</paragraph><paragraph id="H8977725F4F3741E48FEEB566ED3E43BB"><enum>(5)</enum><header>Acquisition date
where there has been prior application of subsection
<enum-in-header>(a)(1)</enum-in-header> with respect to the
taxpayer</header><text>If there has been a prior application of subsection
(a)(1) to an asset while such asset was held by the taxpayer, the date of
acquisition of such asset by the taxpayer shall be treated as not earlier than
the date of the most recent such prior application.</text>
</paragraph></subsection><subsection id="HA19E12BB23EF405A8F1600977CE38560"><enum>(j)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H5E66E955714C494A8E56008DBBA1095C"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for part II of subchapter O of
chapter 1 is amended by striking the item relating to section 1023 and by
inserting after the item relating to section 1022 the following new
item:</text>
<quoted-block id="H1FD6072667B340B082B28E3806B58597" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 1023. Indexing of certain assets for
purposes of determining gain or loss.</toc-entry>
<toc-entry level="section">Sec. 1024. Cross
references.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HA8D0ED048D2E4C9AAAB863EB2C4F947"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to sales and
other dispositions of indexed assets after the date of the enactment of this
Act, in taxable years ending after such date.</text>
</subsection></section><section id="id290887C9A1644FD9B346371D959E065A"><enum>196.</enum><header>Deferral of
gain on sale of certain principal residences</header>
<subsection id="id318259BD3AA847F08F260FAF055CD314"><enum>(a)</enum><header>In
general</header><text>Part III of subchapter O of chapter 1 of subtitle A
(relating to common nontaxable exchanges) is amended by inserting after section
1033 the following new section:</text>
<quoted-block act-name="" id="id5D5B5A35E58B43EBA9F48D2CBB14A3E1" style="OLC">
<section id="id683CC6E4E45D4DC38773378881B6D0B3"><enum>1034.</enum><header>Deferral of
gain on sale of certain principal residences</header>
<subsection id="id1304301ACED94AF3AD03E65698B96142"><enum>(a)</enum><header>Deferral of
gain</header>
<paragraph id="id3D0C8FDD9BBC4999B2066F157B0BC579"><enum>(1)</enum><header>In
general</header><text>In the case of a sale of a principal residence by a
taxpayer, the taxpayer's gain (if any) from such sale shall be recognized only
to the extent that the taxpayer's adjusted sales price exceeds the taxpayer's
cost of purchasing a qualified residence.</text>
</paragraph><paragraph id="id3DFDD35BEB3448F38ED70ED572E0FA3F"><enum>(2)</enum><header>Reduction of
basis in qualified residence</header><text>In the case of a nonrecognition of
gain on the sale of a principal residence due to the purchase of a qualified
residence under paragraph (1), the taxpayer's basis in the qualified residence
shall be reduced by the amount of such gain.</text>
</paragraph></subsection><subsection id="id8A2C7AC1B310487D9DC09141319967E6"><enum>(b)</enum><header>Definitions</header>
<paragraph id="id0A131F69F580489A9FD1CE9033122F11"><enum>(1)</enum><header>Adjusted sales
price</header>
<subparagraph id="id1E1CCD8D5E094FCDAD4186A03C1134FD"><enum>(A)</enum><header>In
general</header><text>For purposes of this section, the term <term>adjusted
sales price</term> means the amount realized, reduced by the aggregate of the
expenses for work performed on a principal residence in order to assist in its
sale.</text>
</subparagraph><subparagraph id="id8D82287994C3433DA76A2F7EB582B8D4"><enum>(B)</enum><header>Limitation</header><text>The
reduction provided in subparagraph (A) applies only to expenses—</text>
<clause id="id3F6104F1D7EE4BC88660729641E3D63A"><enum>(i)</enum><text>for work
performed during the 90-day period ending on the day on which the contract to
sell the principal residence is entered into,</text>
</clause><clause id="id2EF34C91EA3247AA9E390EC9F518ACDC"><enum>(ii)</enum><text>which are paid
on or before the 30th day after the date of the sale of the principal
residence, and</text>
</clause><clause id="idB2233979A1454141B588625B3CE34252"><enum>(iii)</enum><text>which
are—</text>
<subclause id="id34095681083D49679095F9242399CF40"><enum>(I)</enum><text>not allowable as
deductions in computing taxable income under section 63, and</text>
</subclause><subclause id="idF3DB5D7834ED4F07948B6AD6A1970D4F"><enum>(II)</enum><text>not taken into
account in computing the amount realized from the sale of the principal
residence.</text>
</subclause></clause></subparagraph></paragraph><paragraph id="idA333F5E6C70C495884D9304B7F3BEB0B"><enum>(2)</enum><header>Qualified
residence</header><text>For purposes of this section, the term <term>qualified
residence</term> means property that is—</text>
<subparagraph id="id5B4BFF46B9544EDB9A7B4990260911C1"><enum>(A)</enum><text>purchased by the
taxpayer for use as a principal residence, and</text>
</subparagraph><subparagraph id="idACBF273B8DB8412CA5B4AFE28D305764"><enum>(B)</enum><text>purchased during
the period beginning 2 years before the date of the sale of the taxpayer's
previous principal residence and ending 2 years after the date of such
sale.</text>
</subparagraph></paragraph></subsection><subsection id="idA08290A9ADE04DFD970ABA25E4B78D97"><enum>(c)</enum><header>Application of
section</header><text>For purposes of this section:</text>
<paragraph id="id11041F44F5B64C1A9AB3F2C0F7A0BD07"><enum>(1)</enum><header>Exchange of
residence for property</header><text>An exchange by the taxpayer of a principal
residence for other property shall be treated as a sale of such residence, and
the acquisition of a qualified residence on the exchange of property shall be
treated as a purchase of such residence.</text>
</paragraph><paragraph id="idCCD3875907534E17AFF2E6345938C9FB"><enum>(2)</enum><header>Construction of
residence</header><text>A qualified residence any part of which was constructed
or reconstructed by the taxpayer shall be treated as purchased by the taxpayer.
In determining the taxpayer's cost of purchasing a qualified residence, there
shall be included only so much of such cost as is attributable to the
acquisition, construction, reconstruction, and improvements made which are
properly chargeable to capital account, during the period specified in
subsection (b)(2)(B).</text>
</paragraph><paragraph id="id668BDC15ECF441A4A8429FF52F8684DC"><enum>(3)</enum><header>Sale of new
residence prior to sale of principal residence</header><text>If a residence is
purchased by the taxpayer before the date of the sale of the taxpayer's
principal residence, such purchased residence shall not be a qualified
residence under this section if such residence is sold or otherwise disposed of
by the taxpayer before the date of the sale of the taxpayer's principal
residence.</text>
</paragraph><paragraph id="idB7A1CD7CF3B24290B97F3780906E899B"><enum>(4)</enum><header>Multiple
principal residences</header><text>If the taxpayer, during the period described
in subsection (b)(2)(B), purchases more than 1 residence which is used as the
taxpayer's principal residence at some time during the 2 years after the date
of the sale of a principal residence for which gain is deferred under this
section, only the last of such residences so used by the taxpayer within such 2
years shall be a qualified residence under this section. If a qualified
residence is sold in a sale to which subsection (d)(2) applies within 2 years
after the sale of the taxpayer's previous principal residence, for purposes of
applying the preceding sentence with respect to such principal residence, the
qualified residence sold shall be treated as the last residence used during
such 2-year period.</text>
</paragraph></subsection><subsection id="id34FF4E333DB2474B9E475DC3E22A7DB4"><enum>(d)</enum><header>Limitation</header>
<paragraph id="idEB76D52F35284F8D9EE7F35EEFB73010"><enum>(1)</enum><header>In
general</header><text>Subsection (a) shall not apply with respect to the sale
of the taxpayer's principal residence if within 2 years before the date of such
sale the taxpayer sold at a gain other property used by him as his principal
residence, and any part of such gain was deferred by reason of subsection
(a).</text>
</paragraph><paragraph id="idE9CAB15D35D44626BF521B01EAAFBEEB"><enum>(2)</enum><header>Subsequent sale
connected with new principal place of work</header><text>Paragraph (1) shall
not apply with respect to the sale of the taxpayer's principal residence
if—</text>
<subparagraph id="id6B51C671752E4890BAC6BFCD2EF65259"><enum>(A)</enum><text>such sale was in
connection with the commencement of work by the taxpayer (or the taxpayer's
spouse, if such spouse has the same principal residence as the taxpayer) as an
employee or as a self-employed individual at a new principal place of work,
and</text>
</subparagraph><subparagraph id="id8C0C3D28A4C24E8F9E83A66FB922839D"><enum>(B)</enum><text>the taxpayer
would satisfy the conditions of section 217(c) if the principal residence so
sold were treated as the former residence for purposes of section 217.</text>
</subparagraph></paragraph></subsection><subsection id="id1E9083989E564D9C9BA66ED4D634725D"><enum>(e)</enum><header>Tenant-stockholder
in a cooperative housing corporation</header><text>For purposes of this
section, references to property used by the taxpayer as a principal residence
shall include stock held by a tenant-stockholder (as defined in section 216) in
a cooperative housing corporation (as so defined) if—</text>
<paragraph id="id063048B45A6F4EBEA1DB9A2089B9509E"><enum>(1)</enum><text>in the case of
stock sold, the house or apartment which the taxpayer was entitled to occupy as
such stockholder was used by the taxpayer as a principal residence, and</text>
</paragraph><paragraph id="id1F9EF419B0874116B7BD127AD603AA21"><enum>(2)</enum><text>in the case of
stock purchased, the taxpayer used as a principal residence the house or
apartment which the taxpayer was entitled to occupy as such stockholder.</text>
</paragraph></subsection><subsection id="id613C4BE933194BA999AB28B7F841DA42"><enum>(f)</enum><header>Joint
ownership</header><text>In the case of a residence jointly owned and used as a
principal residence by 1 or more taxpayers, or by a married couple filing
separately, the gain (if any) from the sale of such principal residence which
may be deferred under subsection (a) shall be allocated among such taxpayers
according to regulations which shall be prescribed by the Secretary.</text>
</subsection><subsection id="idC0B326733DBE47BD9B189F236F440E26"><enum>(g)</enum><header>Members of the
Armed Forces</header>
<paragraph id="idD3ED1880F488404797C07A71CFB79715"><enum>(1)</enum><header>In
general</header><text>The running of any period of time specified in subsection
(b)(2)(B) or (c) (other than the 2 years referred to in subsection (c)(4))
shall be suspended during any time that the taxpayer (or the taxpayer's spouse,
if such spouse has the same principal residence as the taxpayer) serves on
extended active duty with the Armed Forces of the United States after the date
of the sale of the principal residence for which gain is deferred under this
section, except that any period of time so suspended shall not extend beyond
the date that is 4 years after the date of sale of such principal
residence.</text>
</paragraph><paragraph id="id84D483E4F0164592AAB0103DE8283BE1"><enum>(2)</enum><header>Members
stationed outside the United States or required to reside in Government
quarters</header><text>In the case of a taxpayer (or the taxpayer's spouse, if
such spouse has the same principal residence as the taxpayer) who, during any
period of time the running of which is suspended under paragraph (1)—</text>
<subparagraph id="id38161F7C87E04C0FBB106221019DE795"><enum>(A)</enum><text>is stationed
outside the United States, or</text>
</subparagraph><subparagraph id="id8B4C03A99F49407C9836BB4ED6C98297"><enum>(B)</enum><text>after returning
from a tour of duty outside of the United States and pursuant to a
determination by the Secretary of Defense that adequate off-base housing is not
available at a remote base site, is required to reside in on-base Government
quarters,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">any period
of time so suspended shall not expire before the day that is 1 year after the
last day that such taxpayer or spouse is so stationed or under such
requirement, except that any period so suspended shall not extend beyond the
date which is 8 years after the date of the sale of the principal
residence.</continuation-text></paragraph></subsection><subsection id="id0A42A5B603594DB38104124213F4A732"><enum>(h)</enum><header>Individual
whose tax home is outside the United States</header><text>The running of any
period of time specified in subsection (b)(2)(B) or (c) (other than the 2 years
referred to in subsection (c)(4)) shall be suspended during any time that the
taxpayer (or the taxpayer's spouse, if such spouse has the same principal
residence as the taxpayer) has a tax home (as defined in section 911(d)(3))
outside the United States after the date of the sale of the principal residence
for which gain is deferred under this section, except that any period of time
so suspended shall not extend beyond the date that is 4 years after the date of
sale of such principal residence.</text>
</subsection><subsection id="id1863E7E98F024AFA897F2F9EFA24B09E"><enum>(i)</enum><header>Special rule
for condemnation</header><text>In the case of the seizure, requisition, or
condemnation of a principal residence, or the sale or exchange of a principal
residence under threat or imminence thereof, the taxpayer may elect to have
this section apply in lieu of section 1033. If such election is made, such
seizure, requisition, or condemnation shall be treated as the sale of the
principal residence. Such election shall be made at such time and in such
manner as the Secretary shall prescribe.</text>
</subsection><subsection id="id56304B4F518B440ABFFD347E0A12C4ED"><enum>(j)</enum><header>Statute of
limitations</header><text>In the case of any sale of a principal residence that
results in gain—</text>
<paragraph id="idB372FA696ECE4C26A0C9D5F7B8F75946"><enum>(1)</enum><text>the statutory
period for the assessment of any deficiency attributable to any part of such
gain shall not expire before the expiration of 3 years from the date the
Secretary is notified by the taxpayer (in such manner as the Secretary shall
prescribe) of—</text>
<subparagraph id="id2D69420EE9B043E4ACBE7D1832E96F3D"><enum>(A)</enum><text>the taxpayer's
cost of purchasing any qualified residence which results in nonrecognition of
such gain,</text>
</subparagraph><subparagraph id="id49A46852FD58485B8006F65B269EF80B"><enum>(B)</enum><text>the taxpayer's
intention not to purchase such a qualified residence during the period
specified in subsection (b)(2)(B), or</text>
</subparagraph><subparagraph id="id466EC41DD82B45EDB19A0119E5278D0A"><enum>(C)</enum><text>a failure to make
such a purchase within such period, and</text>
</subparagraph></paragraph><paragraph id="idA3190C8238AB422FA09001C492597717"><enum>(2)</enum><text>such deficiency
may be assessed before the expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would otherwise prevent such
assessment.</text>
</paragraph></subsection><subsection id="idE87E52BD3AA84FD8B0FA8538092733D0"><enum>(k)</enum><header>Application of
exclusion on the sale of a principal residence</header><text>In the case of a
sale of a principal residence by a taxpayer to which section 121 applies, the
amount of the gain on such sale that may be deferred under subsection (a) of
this section shall be reduced by the amount of gain on such sale that is
excluded from gross income under section
121(a).</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id65F6470C979B4A7C96C711E2084DFC4B"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="id2E3883577910479CA58A07E7E5400175"><enum>(1)</enum><header>Coordination
with section 121</header>
<subparagraph id="id17AEB36C008D4E61939962940F124F94"><enum>(A)</enum><text>Section 121
(relating to exclusion of gain from sale of principal residence) is amended by
adding at the end the following new subsection:</text>
<quoted-block act-name="" id="idDB322398AD26414194B5470255CD2ED2" style="OLC">
<subsection id="idFE1E059254C747C88E14D0F49E9564DE"><enum>(h)</enum><header>Coordination
with section 1034 deferral</header><text>For deferral of gain from the sale of
a principal residence in the case of a purchase of another qualified residence,
see section
1034.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="idE29B4C63CFDB421AA8F7B6B21254D96D"><enum>(B)</enum><text>Subsection (g) of
section 121 (relating to residences acquired in rollovers under section 1034)
is amended by striking <quote>(as in effect on the day before the date of the
enactment of this section)</quote>.</text>
</subparagraph></paragraph><paragraph id="idB9D3D305C87F4FBAA5FE2D9E3E797199"><enum>(2)</enum><header>Extension of
period of limitation</header><text>Section 6503 (relating to suspension of
running of period of limitation) is amended—</text>
<subparagraph id="id3C605C70AF154103B269664A3D204164"><enum>(A)</enum><text>by redesignating
subsection (k) as subsection (l), and</text>
</subparagraph><subparagraph id="id05419FB8C32144EE8B65CAD3F78588C1"><enum>(B)</enum><text>by inserting
after subsection (j) the following new subsection:</text>
<quoted-block act-name="" id="idBA5F080CD4E84E58A2F5E13613330438" style="OLC">
<subsection id="idDD19365DEF3E4FE099A1967844596C28"><enum>(k)</enum><header>Extension of
time for assessment of tax liability on gain from the sale of certain principal
residences</header><text>The running of any period of limitations for
collection of any amount of tax liability on gain from the sale of a principal
residence that is deferred under section 1034 shall be suspended for the period
of any extension of time specified under section
1034(j).</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id8B5FF7060F1D41EA927E3069D751E7C3"><enum>(3)</enum><header>Reduction in
basis</header><text>Subsection (a) of section 1016 (relating to general rule)
is amended—</text>
<subparagraph id="id1E7B4B9BE5FF455490C7B1D893FDCD32"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of paragraph (36),</text>
</subparagraph><subparagraph id="id72D7B772E3F04CE1A5DBE804FAC3B885"><enum>(B)</enum><text>by striking the
period at the end of paragraph (37) and inserting <quote>, and</quote>,
and</text>
</subparagraph><subparagraph id="id737BB06C73B843A99A5A7BA906C8D605"><enum>(C)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block act-name="" id="idC8FD0A8E171F4FEFB88937F0315008B5" style="OLC">
<paragraph id="idBCF6BA4B3CF2426DBFEE0703AB174665"><enum>(38)</enum><text>to the extent
provided in section
1034(a)(2).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="id748B69A376D249DDA443965C807EBAF9"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for part III of subchapter O of
chapter 1 of subtitle A (relating to common nontaxable exchanges) is amended by
inserting after the item relating to section 1033 the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="id4894F5914B854C05BC592B835E884308" style="OLC">
<toc>
<toc-entry bold="off" level="section">Sec. 1034. Deferral of gain on
sale of certain principal
residences.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idDB9C236A215C4801ACF37054ECFC1CB0"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to sales in
taxable years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="id32703329AB504CFBAC09601F4BDBB421"><enum>197.</enum><header>Amount
excluded from sale of principal residence indexed for inflation</header>
<subsection id="id368D33E3CB2A49DA908FD4805A41A6F6"><enum>(a)</enum><header>In
general</header><text>Section 121 is amended by adding at the end the following
new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id813A4E16744B4D3281D77763A5967231" style="OLC">
<subsection id="id1F1E635BAF80437CBE1C8CA3F98DEAD2"><enum>(h)</enum><header>Inflation
adjustment</header>
<paragraph id="id5683065FC45A47F8936A65C22C8B15FF"><enum>(1)</enum><header>In
general</header><text>In the case of any taxable year beginning after 2008, the
$250,000 amount under subsection (b)(1) shall be increased by an amount equal
to—</text>
<subparagraph id="id15ED3E099A754379AD586197BDA2BE73"><enum>(A)</enum><text>such dollar
amount, multiplied by</text>
</subparagraph><subparagraph id="id3ACED648B3AF4D3CB7C981C133C3B883"><enum>(B)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, determined by substituting
<quote>calendar year 2007</quote> for <quote>calendar year 1992</quote> in
subparagraph (B) thereof.</text>
</subparagraph></paragraph><paragraph id="id2163A0A7771E4A0A98F5EE042564B1C7"><enum>(2)</enum><header>Rounding</header><text>If
any amount as adjusted under subparagraph (A) is not a multiple of $1,000, such
amount shall be rounded to the next lowest multiple of
$1,000.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idDC4416D1A56B4130B7172CFAACED88FD"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="id8D9D57179A0642DAB997293CD7D03AB7"><enum>(1)</enum><text>Subparagraph (A)
of section 121(b)(2) is amended—</text>
<subparagraph id="id73EB066640B449D0B5D724E8A058EE57"><enum>(A)</enum><text>by striking
<quote>Paragraph (1) shall be applied by substituting <quote>$500,000</quote>
for <quote>$250,000</quote></quote> and inserting <quote>The dollar amount
under paragraph (1) shall be twice the dollar amount otherwise in effect under
such paragraph</quote>, and</text>
</subparagraph><subparagraph id="id4C55C83AFF264B2D89CCAE1B0C04192B"><enum>(B)</enum><text>by striking
<quote>$500,000</quote> in the heading and inserting <quote><header-in-text level="subparagraph" style="OLC">Increased</header-in-text></quote>.</text>
</subparagraph></paragraph><paragraph id="idB08559766429493C98A56CBAE907E6B2"><enum>(2)</enum><text>Section 121(b)(4)
is amended by striking <quote>paragraph (1) shall be applied by substituting
<quote>$500,000</quote> for <quote>$250,000</quote></quote> and inserting
<quote>the dollar amount under paragraph (1) shall be twice the dollar amount
otherwise in effect under such paragraph</quote>.</text>
</paragraph></subsection><subsection id="idCD9B872E235F4DA9AAB0703372B04B2F"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to sales
occurring after December 31, 2008.</text>
</subsection></section><section id="id438F7B8FC586441DA1B0613D11CA1A75"><enum>198.</enum><header>Repeal of
phasein for domestic production activities deduction</header>
<subsection id="id0B55D642A200464886080C7B805A2C72"><enum>(a)</enum><header>In
general</header><text>Subsection (a) of section 199 (relating to income
attributable to domestic production activities) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id69C1FD1F5CA94522A7525B86AE6602AA" style="OLC">
<subsection id="idF0707C9670014D7A8B2128CD988E3BF3"><enum>(a)</enum><header>Allowance of
deduction</header><text>There shall be allowed as a deduction an amount equal
to 9 percent of the lesser of—</text>
<paragraph id="id355C20346F124A2493CCDDD8CCC3DE67"><enum>(1)</enum><text>the qualified
production activities income of the taxpayer for the taxable year, or</text>
</paragraph><paragraph id="id9FA8D633E39B440A83E31CDE01B00426"><enum>(2)</enum><text>taxable income
(determined without regard to this section) for the taxable
year.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idB6DCC3B5261749E297EFD1920DC20282"><enum>(b)</enum><header>Conforming
amendments</header><text>Section 199 is amended by striking <quote>subsection
(a)(1)(B)</quote> each place it appears and inserting <quote>subsection
(a)(2)</quote>.</text>
</subsection><subsection id="id5C47A3768FFF42B39957E75CE425F8F8"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section></subtitle><enum>II</enum><header>Keeping America
competitive</header>
<section id="id845F624BF0F84D5B94DC114F81E73254"><enum>201.</enum><header>Sense of
Congress regarding the legislative initiatives required to strengthen and
protect the well being of our Nation's capital markets</header>
<subsection id="idE7B9F09D8C784EE087CC603D1817D1DA"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">Congress finds the following:</text>
<paragraph id="IDe7bd66ab55c547a3aa17bce8891b82db"><enum>(1)</enum><text>America's capital
markets are a foundation of our Nation's economic well being and
security.</text>
</paragraph><paragraph id="ID590961c7a514485a81af04cae6ed10ac"><enum>(2)</enum><text>Healthy capital
markets foster investment in the United States economy, helping to sustain and
create jobs.</text>
</paragraph><paragraph id="ID9550be699a3044bda0e4c0fd3f4234d2"><enum>(3)</enum><text>The American
economy is fundamentally strong, but a correction in the residential housing
market, credit turmoil, and high oil prices are hampering economic
growth.</text>
</paragraph><paragraph id="IDec09dbd24f9d4cb38139c5f33e290a05"><enum>(4)</enum><text>American
businesses and investors face ever increasing competition from international
competitors and markets.</text>
</paragraph><paragraph id="ID193f0c9fd06a46139a224e74b55e0f75"><enum>(5)</enum><text>Economic policies
that maintain low tax rates on capital gains and dividends have historically
fostered sustained growth in the American economy.</text>
</paragraph></subsection><subsection id="id7BBA1E60392A4491867042B95F1CFDE0"><enum>(b)</enum><header>Sense of
Congress</header><text>It is the sense of the Congress that—</text>
<paragraph id="IDc76df7951e29496ab47b04b292b4ea42"><enum>(1)</enum><text>Congress should
not pass legislation that would create new or greater uncertainty in the
financial markets;</text>
</paragraph><paragraph id="ID9244d1c8b4b9483d842ed171595f0bbe"><enum>(2)</enum><text>Congress should
not pass legislation that would serve to further constrict liquidity in the
marketplace;</text>
</paragraph><paragraph id="IDa78ec439be914f439f988b3ed1a7b03b"><enum>(3)</enum><text>Congress should
not pass legislation that would make credit more expensive and less accessible
in the United States than in other world markets;</text>
</paragraph><paragraph id="IDccf76cdf0c90418ca1c1a534f5a71176"><enum>(4)</enum><text>Congress should
not pass legislation that would inhibit or impair capital formation and
long-term investments;</text>
</paragraph><paragraph id="ID3c11a7d97d21439e90a16bedb40b244b"><enum>(5)</enum><text>Congress should
maintain existing tax policy regarding capital formation and long-term
investment, except in the case of illegitimate tax shelter activity;</text>
</paragraph><paragraph id="ID058bc04d288d4ad6bc369e7d136f9906"><enum>(6)</enum><text>Congress should
pass legislation to extend permanently the 2001 and 2003 tax rate cuts,
including the 15 percent capital gains and dividend rates, and to simplify and
lower corporate tax rates; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID34ca6caab2154b78897f6bd7b282589c"><enum>(7)</enum><text>Congress should
promote the entrepreneurship and economic development fostered by long-term,
private investment.</text>
</paragraph></subsection></section><section id="ID8796d62af59a4994afaf0a97104a550d"><enum>202.</enum><header>Directing the
Securities and Exchange Commission to convene a public hearing on the impact of
excessive litigation</header>
<subsection id="id8367311C9F9D49668D06B25171D426A8"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">Congress finds that—</text>
<paragraph id="idC9D31D3C41EC4F2EB32129241E7520DF"><enum>(1)</enum><text display-inline="yes-display-inline">companies listed on United States
securities exchanges face the potential of extraordinary litigation costs that
companies listed abroad do not;</text>
</paragraph><paragraph id="idC4A93FADB52042E0AD9D19FD14A1F08B"><enum>(2)</enum><text display-inline="yes-display-inline">securities class action settlements in the
United States for 2006 totaled $10,600,000,000 (not counting the Enron-related
settlements of approximately $7,100,000,000), reflecting an increase of—</text>
<subparagraph id="id45841E404B8F41EAB4900445DC9BFADC"><enum>(A)</enum><text display-inline="yes-display-inline">255 percent from 2004;</text>
</subparagraph><subparagraph id="idD157727CD4BC4E83B45A2DDF60A23429"><enum>(B)</enum><text display-inline="yes-display-inline">more than 500 percent from 2000 (not
including the $3,100,000,000 Cendant settlement); and</text>
</subparagraph><subparagraph id="idFF5D32D6CEB144DAB97335CED2A7958A"><enum>(C)</enum><text display-inline="yes-display-inline">an astonishing 7,000 percent from
1995;</text>
</subparagraph></paragraph><paragraph id="id6326D4D9A8F8412296BE759B7144E6EB"><enum>(3)</enum><text display-inline="yes-display-inline">while many such claims are legitimate, the
sheer number of cases and the staggering settlement amounts illustrate the
growing impact of the tort system on the United States economy; and</text>
</paragraph><paragraph id="id5BE4EB2906804C9089B2EE3687AA27A5"><enum>(4)</enum><text display-inline="yes-display-inline">by contrast, such private shareholder class
action suits do not exist in the United Kingdom and other European Union
countries.</text>
</paragraph></subsection><subsection id="id65383F69E6364484B183E27F4421412B"><enum>(b)</enum><header>Public
hearing</header><text display-inline="yes-display-inline">Not later than 60
days after the date of enactment of this Act, the Chairman of the Securities
and Exchange Commission (in this section referred to as the
<quote>Commission</quote>) shall convene a public hearing on the impact of
excessive litigation on the competitiveness of companies listed on United
States securities exchanges.</text>
</subsection></section><section id="IDb735e15c410f411faa3811e2830527f2"><enum>203.</enum><header>Directing the
Commission to establish formal processes and procedures for cost-benefit
analyses of proposed and existing rules and regulations</header>
<subsection id="IDcbe56a326d4f40778a42fbb4f4fd7f94"><enum>(a)</enum><header>Study</header><text>Not
later than 180 days after the date of enactment of this Act, the Commission
shall submit to Congress a study of its existing processes and procedures for
conducting cost-benefit analyses of proposed and existing rules and
regulations, and shall report to Congress on ways in which the Commission could
perform more rigorous and informed cost-benefit analyses of such rules and
regulations.</text>
</subsection><subsection id="ID50b6cf77a42c4d6ea1bf96fb18a920c0"><enum>(b)</enum><header>Proposed
rule</header>
<paragraph id="id092E5F6BFCFB49AE94F731F276376016"><enum>(1)</enum><header>In
general</header><text>Not later than 180 days after the date of submission to
Congress of the report under subsection (a), the Commission shall issue a final
rule to establish formal processes and procedures for conducting cost-benefit
analyses of proposed and existing rules and regulations.</text>
</paragraph><paragraph id="id11B05C8A9B09411592D1829BEC0DB364"><enum>(2)</enum><header>Certain content
required</header><text>At a minimum, processes and procedures proposed by the
Commission under this subsection shall include provisions directing the
Commission—</text>
<subparagraph id="ID469a635f603d4558bd52a32c2797d483"><enum>(A)</enum><text>to assess all
costs and benefits of available regulatory alternatives, including both
quantifiable measures (to the extent that such measures can be usefully
estimated) and qualitative measures of costs and benefits that are difficult to
quantify, but nevertheless essential to consider;</text>
</subparagraph><subparagraph id="ID7eea9e29f77644d38d313296c4faa045"><enum>(B)</enum><text>to design its
rules and regulations in the most cost-effective manner to achieve the
regulatory objective, considering incentives for innovation, consistency,
predictability, the costs of enforcement and compliance, and
flexibility;</text>
</subparagraph><subparagraph id="ID44d658eff1a8441cb0ef669d20fae8d2"><enum>(C)</enum><text>to assess both
the costs and the benefits of the intended rule or regulation and propose or
adopt a rule or regulation only upon a reasoned determination that the benefits
of the intended rule or regulation justify its costs;</text>
</subparagraph><subparagraph id="ID46d56ba238b64f8aa266ca755400e7da"><enum>(D)</enum><text>to base its
decisions on the best reasonably obtainable economic and other information
concerning the need for, and consequences of, the intended rule or
regulation;</text>
</subparagraph><subparagraph id="ID0b5b73cc9e294a2abbcb08eda33ea88d"><enum>(E)</enum><text>to tailor its
rules and regulations to impose the least possible burden on individuals,
businesses of differing sizes, and other entities, consistent with obtaining
the regulatory objectives, taking into account, among other things, and to the
extent practicable, the cumulative costs; and</text>
</subparagraph><subparagraph id="IDbd0e0b94ea034bf99cdd9dac7594040f"><enum>(F)</enum><text>to establish a
process for reexamining existing rules and regulations, or, at a minimum, those
rules and regulations that the Commission, industry participants, or others
identify as imposing unjustifiable costs or competitive burdens, that shall be
designed to determine whether the rules and regulations are working as
intended, whether there are satisfactory alternatives of a less burdensome
nature, and whether changes should be made.</text>
</subparagraph></paragraph><paragraph id="IDa410616a2a5e4de3969fc65c857beb3b"><enum>(3)</enum><header>Periodic
review</header><text>Each rule and regulation of the Commission that is subject
to review pursuant to paragraph (2)(F) shall be reviewed not less frequently
than 2 years after the date of its issuance in final form, and once every 10
years thereafter.</text>
</paragraph></subsection></section><section id="ID7636541c755e407db5433c48f633a90b"><enum>204.</enum><header>Directing the
Commission to define <quote>smaller public company</quote> to provide certainty
to issuers</header>
<subsection id="ID868164ecd9fb444ab94586f33f84364e"><enum>(a)</enum><header>Rule revision
required</header><text>Not later than 90 days after the date of enactment of
this Act, the Commission, pursuant to its authority to amend rules of the
Public Company Accounting Oversight Board under section 107 of the
Sarbanes-Oxley Act of 2002, shall revise Auditing Standard No. 5 of the
Oversight Board, as in effect on the date of enactment of this Act, to include
a definition of the term <quote>smaller public company</quote>.</text>
</subsection><subsection id="IDf15661c491314e04a612760617abe618"><enum>(b)</enum><header>Definition of
smaller public company</header><text>For purposes of the rule revision required
under subsection (a), the term <quote>smaller public company</quote> shall mean
an issuer for which an annual report is required by section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)) that—</text>
<paragraph id="IDea739423de7843189c24d3fcae7004d6"><enum>(1)</enum><text>has a total
market capitalization at the beginning of the relevant reporting period of less
than $700,000,000; and</text>
</paragraph><paragraph id="ID2408f6efc08f4c40812f8c820021f5f8"><enum>(2)</enum><text>has total
revenues for that reporting period of less than $250,000,000.</text>
</paragraph></subsection></section><section id="IDa4ae81845f394eeeb6760fecd2bb9c64"><enum>205.</enum><header>Mutual
recognition</header>
<subsection id="idD3DDA3D54DBD47A4B8B67B626EDDD53A"><enum>(a)</enum><header>Findings</header><text>Congress
finds that—</text>
<paragraph id="ID85a1d82804314a50bd0992eb14cb2709"><enum>(1)</enum><text>there is an
ongoing and pressing need to update the United States financial regulatory
structure to address the increasingly global nature of the financial
marketplace;</text>
</paragraph><paragraph id="ID6aa40cab3fdd4791938dbdd0af3da114"><enum>(2)</enum><text>existing
regulations on cross-border activities are outdated, and predate the revolution
in communications technology and the accompanying transformations in global
markets;</text>
</paragraph><paragraph id="ID5c2ec58e529840e5be0f4980901cabfb"><enum>(3)</enum><text>existing
regulations on cross-border activities are complex, inefficient, not flexible
enough to meet modern market needs, and have the effect of chilling innovation
and imposing significant and unnecessary burdens on United States
investors;</text>
</paragraph><paragraph id="ID7b1016b179ee4116ad88a371e44cf74a"><enum>(4)</enum><text>the Commission
has delayed the timetable for Commission action on key elements of reexamining
and developing new approaches to cross-border regulation, including much needed
reform to Commission rule 240.15a–6 of title 17, Code of Federal Regulations,
as in effect on the date of enactment of this Act, and potential recognition of
foreign regulatory regimes; and</text>
</paragraph><paragraph id="ID0f7f083d8406442bbd6d556822463616"><enum>(5)</enum><text>such delay
postpones the regulatory changes needed to eliminate unnecessary inefficiencies
from international financial transactions, and poses an increasingly
significant risk to the effective modernization and competitiveness of United
States capital markets.</text>
</paragraph></subsection><subsection id="id133AB780464945B885B97684A329A4C2"><enum>(b)</enum><header>Modernization
of cross-border rules applicable to brokers and dealers</header>
<paragraph id="idC68D870E7B23459E8D691DFA7630DA77"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Commission shall,
by rule, exempt any foreign broker or dealer from the registration requirements
of the Securities Exchange Act of 1934, and any other regulation applicable to
registered or unregistered brokers or dealers, to the extent that the foreign
broker or dealer effects transactions in securities with or for, or induces or
attempts to induce the purchase or sale of any security by—</text>
<subparagraph id="id0EFBF3FEF2D14A94AD36C5E8DEE59D6C"><enum>(A)</enum><text display-inline="yes-display-inline">a qualified investor, as defined in section
3(a)(54) of the Securities Exchange Act of 1934;</text>
</subparagraph><subparagraph id="idF0E4957AD296414F99CBA9BCE82B39F8"><enum>(B)</enum><text display-inline="yes-display-inline">an investor that is a resident outside of
the United States; and</text>
</subparagraph><subparagraph id="id6B6B8C0A4A814A25AA7F4206B89BDFB4"><enum>(C)</enum><text display-inline="yes-display-inline">any person described in Commission rule
240.15a–6(a)(4) of title 17, Code of Federal Regulations, as in effect on the
date of enactment of this Act.</text>
</subparagraph></paragraph><paragraph id="idBFF8510579984D79A6717FB490C67095"><enum>(2)</enum><header>Definition of
foreign broker or dealer</header><text display-inline="yes-display-inline">As
used in this section, the term <quote>Foreign broker or dealer</quote> has the
same meaning as in section 240.15a–6(b)(3) of title 17, Code of Federal
Regulations, as in effect on the date of enactment of this Act.</text>
</paragraph><paragraph id="idA435A310124B4FE88B74167E364C8E2F"><enum>(3)</enum><header>Regulatory
authority</header><text display-inline="yes-display-inline">The Commission may,
upon a finding that such action is necessary to protect United States investors
and consistent with this section, require a foreign broker or dealer and its
associated persons—</text>
<subparagraph id="id71CA79923F3E44BEA4C4EDB4A3292D0C"><enum>(A)</enum><text display-inline="yes-display-inline">to file documentation to establish that the
foreign broker or dealer and its associated persons are not subject to
statutory disqualification;</text>
</subparagraph><subparagraph id="idB90D770B5B644966AACA19A7D6F8F5C9"><enum>(B)</enum><text display-inline="yes-display-inline">to consent to service of process for any
civil action brought by or proceeding before the Commission or a
self-regulatory organization; and</text>
</subparagraph><subparagraph id="idB2618B66B7A84A3EBF9CBAD69A379356"><enum>(C)</enum><text display-inline="yes-display-inline">to agree to provide any information or
documents that the Commission reasonably requests, relating to effecting
transactions in securities with or for, or inducing or attempting to induce the
purchase or sale of any security by persons described in subparagraphs (A)
through (C) of paragraph (1), subject to limitations recognizing potential
conflicts with applicable foreign laws or regulations.</text>
</subparagraph></paragraph><paragraph id="id04CEED90EC4C4CD0AD51914AC7158DE4"><enum>(4)</enum><header>Limitation on
State action</header><text display-inline="yes-display-inline">No State or
political subdivision thereof, or any self-regulatory organization, may impose
any registration, licensing, qualification, or other legal requirement
applicable to a foreign broker or dealer or associated person thereof that is
exempt from Commission registration and regulation pursuant to this subsection,
except that the State or political subdivision thereof, or such self-regulatory
organization, may require the foreign broker or dealer to provide copies of any
documents filed with the Commission, as described in this subsection.</text>
</paragraph><paragraph id="idC4DC78DA310341EC8CAEB4EF94EED1B4"><enum>(5)</enum><header>Timing of
regulations</header><text display-inline="yes-display-inline">Final regulations
to carry out this subsection shall be issued by the Commission, and such
regulations shall become effective, not later than 180 days after the date of
enactment of this Act.</text>
</paragraph></subsection><subsection id="IDf54781e2b9a44d3d9f1c082bb9aa334a"><enum>(c)</enum><header>Mutual
recognition rules</header>
<paragraph id="id8BD524D25F334545A4DE12FE0FC40ED6"><enum>(1)</enum><header>In
general</header><text>The Commission shall issue regulations designed to
provide for a framework for mutual recognition of foreign regulatory regimes,
so that foreign brokers, dealers, and exchanges shall be regulated based on
regulation in their home country, and shall not be subject to duplicative
regulatory requirements, except to the extent that the Commission finds
necessary to protect United States investors.</text>
</paragraph><paragraph id="id5C14FF307223440CAAF26F10860E4A1F"><enum>(2)</enum><header>Implementation</header><text>The
Commission shall adopt regulations that provide an expeditious and transparent
implementation mechanism for this section, based on objective qualification
criteria and fixed timelines, that is designed to enable foreign brokers,
dealers, and exchanges to operate in the United States and abroad based on
regulation in their home country.</text>
</paragraph><paragraph id="id5F21A1ACE4AF411CA71FB1D1C1AD27BB"><enum>(3)</enum><header>Limitation</header><text>The
regulations required by this subsection—</text>
<subparagraph id="idB33D4966435A4B28A41CC3BC8411902F"><enum>(A)</enum><text>shall not require
individualized review and approval process for foreign brokers, dealers, and
exchanges to be eligible to rely on regulation in their home country, but shall
permit such brokers, dealers, and exchanges to make a supplemental showing, on
an individual exemptive basis, to demonstrate their qualifications to do
business with relevant classes of investors; and</text>
</subparagraph><subparagraph id="id42F3DE599FE24F549D13E597F180D19A"><enum>(B)</enum><text>may not create
regulatory distinctions that limit trading of portfolios containing both United
States and non-United States securities or impose other requirements that are
inconsistent with the business objectives of investors.</text>
</subparagraph></paragraph><paragraph id="id62D8D6359A2F46088A88045C9A350AA0"><enum>(4)</enum><header>Timing</header><text>The
Commission shall issue proposed regulations to carry out this subsection not
later than 90 days after the date of enactment of this Act, and shall make such
regulations effective reasonably promptly thereafter.</text>
</paragraph><paragraph id="id4BD74C9FBC28424FAE608D0C1D14702A"><enum>(5)</enum><header>Exemption
authority</header><text>The Commission may, by rule, provide for such
exemptions to the provisions of this subsection as the Commission determines
appropriate.</text>
</paragraph></subsection></section><section id="ID7de6e721b4fe49a4b48a1cdf08b66f7b"><enum>206.</enum><header>Supporting the
Securities and Exchange Commission reform efforts to speed the process of
rulemaking for self regulatory organizations</header>
<subsection id="IDd3ab91ab00ab421486a6f6d8f08cd49d"><enum>(a)</enum><header>Findings</header><text>Congress
finds that—</text>
<paragraph id="idD9445BC8831D47E4BEDA5A43FBE5B0AF"><enum>(1)</enum><text>United States
capital markets are evolving quickly, and United States equity exchanges face
increasing competition, both domestically and internationally;</text>
</paragraph><paragraph id="id2CCA0AAC73EB4E02A760E55AEBBE9566"><enum>(2)</enum><text>the Commission
has recognized this transformation in the competitive landscape and announced a
project to redesign the rule approval process for exchanges to make it more
efficient;</text>
</paragraph><paragraph id="ID70f025536cc1470c84376cd93f53a046"><enum>(3)</enum><text>rather than
approving rule filings by self regulatory organizations within the 35-day
period prescribed under the Securities Exchange Act of 1934, the Commission has
routinely requested that exchanges agree to extend deadlines while rules are
weighed and considered within the agency, potentially resulting in years before
exchange rule filings are finally approved;</text>
</paragraph><paragraph id="IDc3da47fbe072401bb95264ec5997e2ae"><enum>(4)</enum><text>this antiquated
and overly rigid regulatory model does not recognize the new realities of
international competition among exchanges or new competition from innovative
products that compete with traditional asset classes; and</text>
</paragraph><paragraph id="id872D5B95BB3C483EBF8CEAEDCC6E2DDB"><enum>(5)</enum><text>competitors to
United States equity exchanges operate under different regulatory regimes,
which can allow such competitors to adapt to rapidly changing business
environments while United States exchanges are frozen in rule approval process
review by the Commission for months or years.</text>
</paragraph></subsection><subsection commented="no" id="IDbe771a59bc0e46178c604eb3cc816757"><enum>(b)</enum><header>Rulemaking</header><text>The
Commission shall promulgate rules under section 19 of the Securities Exchange
Act of 1934, to speed the process of rulemaking to enable self-regulatory
organizations to respond to competitive inequities and better meet customer
needs. Such rules and other actions should be completed not later than 180 days
after the date of enactment of this Act, and should predate or be coterminous
with any foreign exchange mutual recognition regime established under this
Act.</text>
</subsection></section><section id="IDb8dbfc3026b9489e85a5d76506a4b5b8"><enum>207.</enum><header>Eliminate the
exemption from State regulation for certain securities designated by national
securities exchanges</header><text display-inline="no-display-inline">Section
18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is amended—</text>
<paragraph id="ID2b9f075466354496ae9537a1de183dd6"><enum>(1)</enum><text>in subparagraph
(A)—</text>
<subparagraph id="ID8fdfc8f048e749b3bf6588b5b8278de5"><enum>(A)</enum><text>by striking
<quote>or the American Stock Exchange, or listed, or authorized for listing, on
the National Market System of the Nasdaq Stock Market (or any successor to such
entities)</quote> and inserting <quote>, the American Stock Exchange, or the
Nasdaq Stock Market (or any successor to such entities)</quote>; and</text>
</subparagraph><subparagraph id="ID4742c822b2414d86bf9fedad34ed4b1d"><enum>(B)</enum><text>by inserting
before the semicolon at the end the following: <quote>, except that a security
listed, or authorized for listing, on the New York Stock Exchange, the American
Stock Exchange, or the Nasdaq Stock Market (or any successor to any such
entity) shall not be a covered security if the exchange adopts listing
standards pursuant to section 19(b) of the Securities Exchange Act of 1934 (15
U.S.C. 78s(b)) that designates a tier or segment of such securities as
securities that are not covered securities for purposes of this section and
such security is listed, or authorized for listing, on such tier or
segment</quote>; and</text>
</subparagraph></paragraph><paragraph id="IDb6505770bcca4c26bed579aea79bd3a9"><enum>(2)</enum><text>in subparagraph
(B), by inserting <quote>covered</quote> after <quote>applicable
to</quote>.</text>
</paragraph></section><section id="ID4ca6248ce2db49339a0c2eaedc3ae1a9"><enum>208.</enum><header>Directing the
Commission to accelerate full conversion of IFRS and United States
GAAP</header>
<subsection id="idE977B720A9EB4480BEA6867E6AB3D9A9"><enum>(a)</enum><header>Findings</header><text>Congress
finds that—</text>
<paragraph id="idAB8704CD52A04DBA8BE1689EB7010F3C"><enum>(1)</enum><text display-inline="yes-display-inline">the accounting framework applied in more
than 100 countries around the world is the International Financial Reporting
Standard (in this section referred to as <quote>IFRS</quote>);</text>
</paragraph><paragraph id="idAB87F46761AB4FD69EC101D8F096DD35"><enum>(2)</enum><text display-inline="yes-display-inline">a number of additional important United
States trading partners, including Canada, Brazil, Chile, India, and South
Korea, have announced dates to shift to IFRS; and</text>
</paragraph><paragraph id="id58C9FF44D4F847DBB3FE5CEE623849B7"><enum>(3)</enum><text display-inline="yes-display-inline">the difficulty and expense of reconciling
IFRS with generally accepted accounting principles employed in the United
States (in this section referred to as <quote>GAAP</quote>), the accounting
framework within which companies whose shares are listed on United States
exchanges must report their financial information, is among the highest hurdles
for foreign companies considering a United States listing, and one of the most
compelling incentives for foreign-based businesses to list their shares on
exchanges based somewhere other than the United States.</text>
</paragraph></subsection><subsection id="id13E0E7B5BB124FE7A4CCAB925415D85D"><enum>(b)</enum><header>Acceleration of
effort</header><text display-inline="yes-display-inline">The Commission
shall—</text>
<paragraph id="id1347664628FD46B59C6A3DB50B93C688"><enum>(1)</enum><text display-inline="yes-display-inline">accelerate efforts to offer to both United
States- and foreign-based companies the option of reporting financial
information using either IFRS or GAAP; and</text>
</paragraph><paragraph id="id7842B3366F934B6CA6FD8164C2060F36"><enum>(2)</enum><text display-inline="yes-display-inline">accelerate efforts with the Commission’s
foreign counterparts to achieve full conversion of IFRS and GAAP.</text>
</paragraph></subsection></section><section id="IDf5de6b18794e4607b2e28b6236bfc5a3"><enum>209.</enum><header>Promoting
market access for financial services</header>
<subsection id="id739AC574A60441AB8AD731767765F651"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">Congress finds that—</text>
<paragraph id="id767D5EE566D64F1BB45B2DC223AF6161"><enum>(1)</enum><text>there is a need
to consistently monitor and increase Government advocacy for United States
financial services firms’ attempts to gain overseas financial market
access;</text>
</paragraph><paragraph id="ID8db333ae3fac4df7a8be2efcc3eefa4f"><enum>(2)</enum><text>the presence of
foreign financial services firms in the United States and their activities
should be documented to find which countries’ firms enjoy full market access in
the United States, while their home governments deny national treatment to
American financial services firms; and</text>
</paragraph><paragraph id="IDb692de5391384df3bf4310d97f2e96d6"><enum>(3)</enum><text>an analysis of
the results achieved from the U.S.-China Strategic Economic Dialogue (referred
to as <quote>SED</quote>) and how such results specifically apply to United
States financial services firms, including benchmarks and timeframes for future
improvements, should be compiled to assess the efficacy of the
negotiations.</text>
</paragraph></subsection><subsection id="idB8072073E71747CD8E96291ACDF98E79"><enum>(b)</enum><header>Amendments to
Financial Reports Act</header><text display-inline="yes-display-inline">The
Financial Reports Act of 1988 (22 U.S.C. 5351 et seq.) is amended—</text>
<paragraph id="ID22959b33f0da4c6391d2e1376ee0c3d6"><enum>(1)</enum><text>in section
3602—</text>
<subparagraph id="ID8b56c56d2cb44730a8b1c0625562b51f"><enum>(A)</enum><text>in the section
heading, by striking <quote><header-in-text level="section" style="OLC">quadrennial</header-in-text></quote> and inserting
<quote><header-in-text level="section" style="OLC">annual</header-in-text></quote>;</text>
</subparagraph><subparagraph id="ID127c482037184adf9152246004f0dc3d"><enum>(B)</enum><text>by striking
<quote>Not less frequently than every 4 years, beginning December 1,
1990</quote> and inserting <quote>Beginning July 1, 2008, and annually
thereafter,</quote>; and</text>
</subparagraph><subparagraph id="IDf813573c251a4c33b38efeba5d7f2a4a"><enum>(C)</enum><text>by striking
<quote>to the Congress</quote> and inserting <quote>to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives</quote>; and</text>
</subparagraph></paragraph><paragraph id="ID962e3b47e90542ff9a7f9f8604f162e7"><enum>(2)</enum><text>in section
3603—</text>
<subparagraph id="ID53835cd3bb0b4acd96b2d9655a6b84b6"><enum>(A)</enum><text>by redesignating
subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively;
and</text>
</subparagraph><subparagraph id="ID38c58bead0bc4708891f8d82a833597c"><enum>(B)</enum><text>by inserting
after subsection (a) the following:</text>
<quoted-block display-inline="no-display-inline" id="id89021F5E5BAD4E95AEB98835339FB28C" style="OLC">
<subsection id="IDda74c9b66014452a987c3618890685d7"><enum>(b)</enum><header>Report on
SED</header>
<paragraph id="id0FB3B066BE5B405CB5C82524077F239F"><enum>(1)</enum><header>In
general</header><text>The Secretary shall include in the initial report
required under section 3602, a summary of the results of the most recent United
States-China Strategic Economic Dialogue (in this subsection referred to as
<quote>SED</quote>) and the results of the SED as it relates to promoting
market access for financial institutions.</text>
</paragraph><paragraph id="id0887FA7BF44C46A5817DED6DDD69FBDF"><enum>(2)</enum><header>Progress
report</header><text>The reports required under section 3602 shall include a
progress report on the implementation of any agreements resulting from the SED,
a description of the remaining challenges, if any, in improving market access
for financial institutions, and a plan, including benchmarks and time frames,
for dealing with the remaining challenges.</text>
</paragraph><paragraph id="idA17F051D19B44B9CBBB79E8A0A217E2B"><enum>(3)</enum><header>Specific
content</header><text>Each report described in this subsection shall
specifically address issues regarding—</text>
<subparagraph id="ID06f99bb907464d6f8dc0ec95ca3e645d"><enum>(A)</enum><text>foreign
investment rules;</text>
</subparagraph><subparagraph id="IDac3d6ae5bf9b4708814366aec81e8b2f"><enum>(B)</enum><text>the problems of a
dual-share stock market;</text>
</subparagraph><subparagraph id="IDcb6dd4af17e14a768f556d43ade1955c"><enum>(C)</enum><text>the openness of
the derivatives market;</text>
</subparagraph><subparagraph id="ID8e5e2522a6d2486abea21f24ed782f79"><enum>(D)</enum><text>restrictions on
foreign bank branching;</text>
</subparagraph><subparagraph id="IDd3eb2b4f47784994bd67c89c7b254608"><enum>(E)</enum><text>the ability to
offer insurance (including innovative products); and</text>
</subparagraph><subparagraph id="IDd3fd038245454e0789fa83a258f2e700"><enum>(F)</enum><text>regulatory and
procedural
transparency.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection></section><enum>III</enum><header>Protecting
homeowners</header>
<section id="idB8D42EA33F6F40FFA0817F9DB2B5763D"><enum>301.</enum><header>Subprime
refinancing loans through use of qualified mortgage bonds</header>
<subsection id="IDdeec79dbe0364d99982f0ce7b8f53632"><enum>(a)</enum><header>Use of
qualified mortgage bonds proceeds for subprime refinancing
loans</header><text>Section 143(k) of the Internal Revenue Code of 1986
(relating to other definitions and special rules) is amended by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="idC3F0157011444FC087B5D7501F8EB828" style="OLC">
<paragraph id="IDaea0f00b34064587b2e4c51075e7d659"><enum>(12)</enum><header>Special rules
for subprime refinancings</header>
<subparagraph id="IDaf44f5b31c4b49fd92f849807b57e184"><enum>(A)</enum><header>In
general</header><text>Notwithstanding the requirements of subsection (i)(1),
the proceeds of a qualified mortgage issue may be used to refinance a mortgage
on a residence which was originally financed by the mortgagor through a
qualified subprime loan.</text>
</subparagraph><subparagraph id="IDa901b47820a14fbba374a2be34244765"><enum>(B)</enum><header>Special
rules</header><text>In applying this paragraph to any case in which the
proceeds of a qualified mortgage issue are used for any refinancing described
in subparagraph (A)—</text>
<clause id="IDb1eae33f85d446acb4699697a8c4593e"><enum>(i)</enum><text>subsection
(a)(2)(D)(i) shall be applied by substituting <quote>12-month period</quote>
for <quote>42-month period</quote> each place it appears,</text>
</clause><clause id="IDebc56238f70e41f68f2458d1a5d9ea71"><enum>(ii)</enum><text>subsection (d)
(relating to 3-year requirement) shall not apply, and</text>
</clause><clause id="ID99664f2ba58742708c8b78f09edaa974"><enum>(iii)</enum><text>subsection (e)
(relating to purchase price requirement) shall be applied by using the market
value of the residence at the time of refinancing in lieu of the acquisition
cost.</text>
</clause></subparagraph><subparagraph id="ID81d71ce3b794407b95976f409a88b64e"><enum>(C)</enum><header>Qualified
subprime loan</header><text>The term <term>qualified subprime loan</term> means
an adjustable rate single-family residential mortgage loan originated after
December 31, 2001, and before January 1, 2008, that the bond issuer determines
would be reasonably likely to cause financial hardship to the borrower if not
refinanced.</text>
</subparagraph><subparagraph id="IDd84d1b3c0a414ef9a2519b71dfd799fa"><enum>(D)</enum><header>Termination</header><text>This
paragraph shall not apply to any bonds issued after December 31,
2010.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID17bbb35565484472ab83f796ee03e9b4"><enum>(b)</enum><header>Increased
volume cap for certain bonds</header>
<paragraph id="ID755a2a3ae6a04af4bc22de1ce901b2ee"><enum>(1)</enum><header>In
general</header><text>Subsection (d) of section 146 of the Internal Revenue
Code of 1986 is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id079D7E5C399D4CC8963A164F9533F2F4" style="OLC">
<paragraph id="ID05c71db2139b46ac911ba845b420838f"><enum>(5)</enum><header>Increase and
set aside for housing bonds for 2008</header>
<subparagraph id="ID144c71b8c90a4e799175542c00dd3ca2"><enum>(A)</enum><header>Increase for
2008</header><text>In the case of calendar year 2008, the State ceiling for
each State shall be increased by an amount equal to $10,000,000,000 multiplied
by a fraction—</text>
<clause id="ID3e949c70d57a44e0b2ee73892d522028"><enum>(i)</enum><text>the numerator of
which is the population of such State (as reported in the most recent decennial
census), and</text>
</clause><clause id="ID77b01de519074a90972763c795bcd9ed"><enum>(ii)</enum><text>the denominator
of which is the total population of all States (as reported in the most recent
decennial census).</text>
</clause></subparagraph><subparagraph id="IDe016b3f7327d4401a530362a8309178d"><enum>(B)</enum><header>Set
aside</header>
<clause id="IDc538cab8bfc34768bcad223618ac0f6e"><enum>(i)</enum><header>In
general</header><text>Any amount of the State ceiling for any State which is
attributable to an increase under this paragraph shall be allocated solely for
one or more qualified purposes.</text>
</clause><clause id="ID0dee8465d72047d8a2bd3c284180b7df"><enum>(ii)</enum><header>Qualified
purpose</header><text>For purposes of this paragraph, the term <term>qualified
purpose</term> means—</text>
<subclause id="ID4a6da39149d344c7a55cf4de0c098c27"><enum>(I)</enum><text>the issuance of
exempt facility bonds used solely to provide qualified residential rental
projects, or</text>
</subclause><subclause id="ID77a397640a834ecb99e5f85f8fd26da7"><enum>(II)</enum><text>a qualified
mortgage issue (determined by substituting <quote>12-month period</quote> for
<term>42-month period</term> each place it appears in section
143(a)(2)(D)(i)).</text>
</subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID216221ffe601438a9d9c23a7f40b484b"><enum>(2)</enum><header>Carryforward of
unused limitations</header><text>Subsection (f) of section 146 of such Code is
amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id15AAB3DFA7674F82947ACA97A9A0FC9F" style="OLC">
<paragraph id="ID6835c3c00a5b417aa8d1a39da47bd6b6"><enum>(6)</enum><header>Special rules
for increased volume cap under subsection (d)(5)</header>
<subparagraph id="ID080e8222527b4089b8c1a2eff041d898"><enum>(A)</enum><header>In
general</header><text>No amount which is attributable to the increase under
subsection (d)(5) may be used—</text>
<clause id="IDb3ccaf412b754ffe82b3593850786714"><enum>(i)</enum><text>for a
carryforward purpose other than a qualified purpose (as defined in subsection
(d)(5)), and</text>
</clause><clause id="IDdc81de38b20248bdb1bcfd13c8bd7465"><enum>(ii)</enum><text>to issue any
bond after calendar year 2010.</text>
</clause></subparagraph><subparagraph id="IDa77843ec274548a99c57c3c5e22e3478"><enum>(B)</enum><header>Ordering
rules</header><text>For purposes of subparagraph (A), any carryforward of an
issuing authority's volume cap for calendar year 2008 shall be treated as
attributable to such increase to the extent of such
increase.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID39c81ac7324e45a8866c005be6c654e0"><enum>(c)</enum><header>Alternative
minimum tax</header>
<paragraph id="ID49fea810f8e0465391785dff0237c51b"><enum>(1)</enum><header>In
general</header><text>Clause (ii) of section 57(a)(5)(C) of the Internal
Revenue Code of 1986 is amended by striking <quote>shall not include</quote>
and all that follows and inserting “shall not include—</text>
<quoted-block display-inline="no-display-inline" id="id3925EAD1513142F396976BB1378A07AC" style="OLC">
<subclause id="ID5eba0d9fb8f94e28984717fe9ce32557"><enum>(I)</enum><text>any qualified
501(c)(3) bond (as defined in section 145), or</text>
</subclause><subclause id="IDd097cb05aa7342238b64c5c1a012f9e5"><enum>(II)</enum><text>any qualified
mortgage bond (as defined in section 143(a)) or qualified veteran's mortgage
bond (as defined in section 143(b)) issued after the date of the enactment of
this subclause and before January 1,
2011.</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID822057bd097340fa982804db1edec93c"><enum>(2)</enum><header>Conforming
amendment</header><text>The heading for section 57(a)(5)(C)(ii) of the Internal
Revenue Code of 1986 is amended by striking <quote><header-in-text level="clause" style="OLC">qualified 501(c)(3) bonds</header-in-text></quote>
and inserting <quote><header-in-text level="clause" style="OLC">certain
bond</header-in-text></quote>.</text>
</paragraph></subsection><subsection id="ID52020ac2a05d4f599aa8632f8c083a9d"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to bonds
issued after the date of the enactment of this Act.</text>
</subsection></section><section id="ID333b5e893ae0433b8ebad68cb7e94bf2"><enum>302.</enum><header>Expeditious
distribution of funds already provided for mortgage foreclosure
counseling</header><text display-inline="no-display-inline">Upon certification
by the Neighborhood Reinvestment Corporation under paragraph (4) under the
heading <quote>Neighborhood Reinvestment Corporation—Payment to the
Neighborhood Reinvestment Corporation</quote> of Public Law 110-161 that
Housing and Urban Development or Neighborhood Reinvestment Corporation-approved
counseling intermediaries and State Housing Finance Agencies have the need for
additional portions of the $180,000,000 provided therein for mortgage
foreclosure mitigation activities in States and areas with high rates of
mortgage foreclosures, defaults, or related activities beyond the initial
awards, and the expertise to use such funds effectively, the Neighborhood
Reinvestment Corporation shall expeditiously continue to award such funds as
need and expertise is shown.</text>
</section><section id="id00D98EB0034D4F898255E9F6BDE75A00" section-type="subsequent-section"><enum>303.</enum><header>Credit for purchase
of homes in or near foreclosure</header>
<subsection id="ID1913303D6FAF4166B44D11BE701895A9"><enum>(a)</enum><header>Allowance of
credit</header><text>Subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to refundable credits) is amended by
inserting after section 25D the following new section:</text>
<quoted-block act-name="" id="id796B26425585468AAB66B1F29143B625" style="OLC">
<section id="id5224850B85E74ADB84E79D05A21108A4"><enum>25E.</enum><header>Credit for
purchase of homes in or near foreclosure</header>
<subsection id="idFF6E92FE186D4C7BA3778383131F1ED6"><enum>(a)</enum><header>Allowance of
credit</header>
<paragraph id="id3743483ECA864DE28A48FEE7A064F1A5"><enum>(1)</enum><header>In
general</header><text>In the case of an individual who is a purchaser of a
qualified principal residence during the taxable year, there shall be allowed
as a credit against the tax imposed by this chapter an amount equal to so much
of the purchase price of the residence as does not exceed $15,000.</text>
</paragraph><paragraph id="idF316E6A8CC11480EB760FD2FAED200B6"><enum>(2)</enum><header>Allocation of
credit amount</header><text>The amount of the credit allowed under paragraph
(1) shall be equally divided among the 3 taxable years beginning with the
taxable year in which the purchase of the qualified principal residence is
made.</text>
</paragraph></subsection><subsection id="id9DE7E5CDA9C84DBCB732CE50A244B904"><enum>(b)</enum><header>Limitations</header>
<paragraph id="id7D599410A9624BFEA74E1DE5148A66EC"><enum>(1)</enum><header>Date of
purchase</header><text>The credit allowed under subsection (a) shall be allowed
only with respect to purchases made—</text>
<subparagraph id="id953019E192B94AB7B32844F9A0F28861"><enum>(A)</enum><text>after February
29, 2008, and</text>
</subparagraph><subparagraph id="id7D26180C5AF2438F8A9ADC684FEC12DC"><enum>(B)</enum><text>before March 1,
2009.</text>
</subparagraph></paragraph><paragraph id="idA8F59AD4C3D54D87A95FD6845342DADA"><enum>(2)</enum><header>Limitation
based on amount of tax</header><text>In the case of a taxable year to which
section 26(a)(2) does not apply, the credit allowed under subsection (a) for
any taxable year shall not exceed the excess of—</text>
<subparagraph id="idB7BB9BEEE47747FB999C9D272A4154F5"><enum>(A)</enum><text>the sum of the
regular tax liability (as defined in section 26(b)) plus the tax imposed by
section 55, over</text>
</subparagraph><subparagraph id="idA836511D1DD14D4F8402A11BA57FA102"><enum>(B)</enum><text>the sum of the
credits allowable under this subpart (other than this section) for the taxable
year.</text>
</subparagraph></paragraph><paragraph id="id4ED379E2CE2941D3BBD5BDCB272CC175"><enum>(3)</enum><header>One-time
only</header>
<subparagraph id="id1BA25C3B979347F9BEF6234E01DF20DD"><enum>(A)</enum><header>In
general</header><text>If a credit is allowed under this section in the case of
any individual (and such individual's spouse, if married) with respect to the
purchase of any qualified principal residence, no credit shall be allowed under
this section in any taxable year with respect to the purchase of any other
qualified principal residence by such individual or a spouse of such
individual.</text>
</subparagraph><subparagraph id="id78631E989B1A444787C91FC507BA806F"><enum>(B)</enum><header>Joint
purchase</header><text>In the case of a purchase of a qualified principal
residence by 2 or more unmarried individuals or by 2 married individuals filing
separately, no credit shall be allowed under this section if a credit under
this section has been allowed to any of such individuals in any taxable year
with respect to the purchase of any other qualified principal residence.</text>
</subparagraph></paragraph></subsection><subsection id="id75919FA796374AC0B503B6371059E10F"><enum>(c)</enum><header>Qualified
principal residence</header>
<paragraph id="id78695F17ADD84991B71CC961CD8293E4"><enum>(1)</enum><header>In
general</header><text>For purposes of this section, the term <term>qualified
principal residence</term> means an eligible single-family residence that is
purchased to be the principal residence of the purchaser.</text>
</paragraph><paragraph id="id4E69549FF8EC47A4B1C93C9DA6880DD0"><enum>(2)</enum><header>Eligible
single-family residence</header>
<subparagraph id="idCDF6FF1EF3D64F0C974C0569CBBF13F3"><enum>(A)</enum><header>In
general</header><text>For purposes of this subsection, the term <term>eligible
single-family residence</term> means a single-family structure that is—</text>
<clause id="idFF5D6EA1612A4407840442371A849469"><enum>(i)</enum><text>a
new previously unoccupied residence for which a building permit is issued and
construction begins on or before September 1, 2007, but only if such residence
is purchased by the taxpayer directly from the person to whom such building
permit was issued,</text>
</clause><clause id="idA3E4ED96A1EC4D5E8A13FA8CDAF1F9C7"><enum>(ii)</enum><text>an
owner-occupied residence with respect to which the owner's acquisition
indebtedness (as defined in section 163(h)(3)(B), determined without regard to
clause (ii) thereof) is in default on or before March 1, 2008, or</text>
</clause><clause id="id7383A6CF4E074D30A5CFA7D79C1CE46F"><enum>(iii)</enum><text>a residence
with respect to which a foreclosure event has taken place and which is owned by
the mortgagor or the mortgagor's agent, but only if such residence was occupied
as a principal residence by the mortgagee for at least 1 year prior to the
foreclosure event.</text>
</clause></subparagraph><subparagraph id="idF6B3C4084BA042A19637AB3A0E4A91C3"><enum>(B)</enum><header>Certification</header><text>In
the case of an eligible single-family residence described in subparagraph
(A)(i), no credit shall be allowed under this section unless the purchaser
submits a certification by the seller of such residence that such residence
meets the requirements of such subparagraph.</text>
</subparagraph></paragraph></subsection><subsection id="idC21AC02ECA2447FB827347212D725F08"><enum>(d)</enum><header>Denial of
double benefit</header><text>No credit shall be allowed under this section for
any purchase for which a credit is allowed under section 1400C.</text>
</subsection><subsection id="id363C86C627D84F17B3830F4566DF0DA1"><enum>(e)</enum><header>Recapture in
the case of certain dispositions</header><text>In the event that a
taxpayer—</text>
<paragraph id="id8CA6CDB6B12F42BAB37AD8281EBC4338"><enum>(1)</enum><text>disposes of the
qualified principal residence with respect to which a credit is allowed under
subsection (a), or</text>
</paragraph><paragraph id="id80C6EBCBC54A489BBCD62D40C9581654"><enum>(2)</enum><text>fails to occupy
such residence as the taxpayer's principal residence,</text>
</paragraph><continuation-text continuation-text-level="subsection">at any
time within 36 months after the date on which the taxpayer purchased such
residence, then the remaining portion of the credit allowed under subsection
(a) shall be disallowed in the taxable year during which such disposition
occurred or in which the taxpayer failed to occupy the residence as a principal
residence, and in any subsequent taxable year in which the remaining portion of
the credit would, but for this subsection, have been allowed.</continuation-text></subsection><subsection id="id9403E3DF8C514E8F95C0D9681B34FAFE"><enum>(f)</enum><header>Special
rules</header>
<paragraph id="id82E97C6071AF4D3EB8C82DABE445145B"><enum>(1)</enum><header>Joint
purchase</header>
<subparagraph id="id515D49E8423147ABAA52BFFF35576058"><enum>(A)</enum><header>Married
individuals filing separately</header><text>In the case of 2 married
individuals filing separately, subsection (a) shall be applied to each such
individual by substituting <quote>$7,500</quote> for <quote>$15,000</quote> in
subsection (a)(1).</text>
</subparagraph><subparagraph id="id18E19045B6134563B84C89B17678F05E"><enum>(B)</enum><header>Unmarried
individuals</header><text>If 2 or more individuals who are not married purchase
a qualified principal residence, the amount of the credit allowed under
subsection (a) shall be allocated among such individuals in such manner as the
Secretary may prescribe, except that the total amount of the credits allowed to
all such individuals shall not exceed $15,000.</text>
</subparagraph></paragraph><paragraph id="id6AB624887EAD468EA8C1D9DBC991FC20"><enum>(2)</enum><header>Purchase</header><text>In
defining the purchase of a qualified principal residence, rules similar to the
rules of paragraphs (2) and (3) of section 1400C(e) (as in effect on the date
of the enactment of this section) shall apply.</text>
</paragraph><paragraph id="id8B424507BEF34821923BA1731A3B891A"><enum>(3)</enum><header>Reporting
requirement</header><text>Rules similar to the rules of section 1400C(f) (as so
in effect) shall apply.</text>
</paragraph></subsection><subsection id="id613F3932136A4E5EB3F9D6EB71B296BF"><enum>(g)</enum><header>Basis
adjustment</header><text>For purposes of this subtitle, if a credit is allowed
under this section with respect to the purchase of any residence, the basis of
such residence shall be reduced by the amount of the credit so
allowed.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idB780D0F6D8CA400C8476DF30AC0FE931"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for subpart A of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to section 25D the following new item:</text>
<quoted-block display-inline="no-display-inline" id="idBE1241B820E24A95B61D17DF0C605248" style="OLC">
<toc>
<toc-entry level="section">Sec. 25E. Credit for certain home
purchases.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="IDff5844e56ffd4a2d9d2a4b6a5c7b9f9c"><enum>304.</enum><header>Enhanced
mortgage loan disclosures</header>
<subsection id="IDc37b22dfad774eb4a408b115d2ab8ba9"><enum>(a)</enum><header>Truth in
lending Act disclosures</header><text>Section 128(b)(2) of the Truth in Lending
Act (15 U.S.C. 1638(b)(2)) is amended—</text>
<paragraph id="IDfcbf8660f33648578139c38fb0b5769f"><enum>(1)</enum><text>by inserting
<quote>(A)</quote> before <quote>In the</quote>;</text>
</paragraph><paragraph id="ID97a3e35d02e94a65833ebca2130b23ea"><enum>(2)</enum><text>by striking
<quote>a residential mortgage transaction, as defined in section 103(w)</quote>
and inserting <quote>any extension of credit that is secured by the dwelling of
a consumer</quote>;</text>
</paragraph><paragraph id="ID77d234ee04ac43edb607fba5c52d2831"><enum>(3)</enum><text>by striking
<quote>shall be made in accordance</quote> and all that follows through
<quote>extended, or</quote>; and</text>
</paragraph><paragraph id="ID185cf90987764dee9e57ebd9b14a0e3d"><enum>(4)</enum><text>by striking
<quote>If the</quote> and all that follows through the end of the paragraph and
inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="idE02BA6D81D5F4E9FA1CC290242A4344C" style="OLC">
<subparagraph id="IDc5b52d2c5166442eaa7da832f043bfd0"><enum>(B)</enum><text>In the case of an
extension of credit that is secured by the dwelling of a consumer, in addition
to the other disclosures required by subsection (a), the disclosures provided
under this paragraph shall—</text>
<clause id="ID36e468eb39414b86819ed386551305fe"><enum>(i)</enum><text>state in
conspicuous type size and format, the following: <quote>You are not required to
complete this agreement merely because you have received these disclosures or
signed a loan application.</quote>; and</text>
</clause><clause id="IDc97883a4e9834808917bf43ed63a9bc8"><enum>(ii)</enum><text>be furnished to
the borrower not later than 7 business days before the date of consummation of
the transaction, and at the time of consummation of the transaction, subject to
subparagraph (D).</text>
</clause></subparagraph><subparagraph id="IDab54a28a8db44a058fe4f0ac1fb05b87"><enum>(C)</enum><text>In the case of an
extension of credit that is secured by the dwelling of a consumer, under which
the annual rate of interest is variable, or with respect to which the regular
payments may otherwise be variable, in addition to the other disclosures
required by subsection (a), the disclosures provided under this paragraph
shall—</text>
<clause id="IDd18585c872c24339af7e7cb8c1ca02c7"><enum>(i)</enum><text>label the payment
schedule as follows: <quote>Payment Schedule: Payments Will Vary Based on
Interest Rate Changes</quote>;</text>
</clause><clause id="ID9965552a0807401497ad0683bb7c7e28"><enum>(ii)</enum><text>state the
maximum amount of the regular required payments on the loan, based on the
maximum interest rate allowed, introduced with the following language in
conspicuous type size and format: <quote>Your payment can go as high as
$_______</quote>, the blank to be filled in with the maximum possible payment
amount;</text>
</clause><clause id="IDd735e10413714bc9b1ea89e3965ec875"><enum>(iii)</enum><text>if the loan is
an adjustable rate mortgage that includes an initial fixed interest
rate—</text>
<subclause id="ID50dbd4c1ddd4431ab444638912fe9ad9"><enum>(I)</enum><text>state in
conspicuous type size and format the following phrase: This loan is an
adjustable rate mortgage with an initial fixed interest rate. Your initial
fixed interest rate is AAA with a monthly payment of BBB until CCC. After that
date, the interest rate on your loan will <quote>reset</quote> to an adjustable
rate and both your interest rate and payment could go higher on that date and
in the future. For example, if your initial fixed rate ended today, your new
adjustable interest rate would be DDD and your new payment EEE. If interest
rates are one percent higher than they are today or at some point in the
future, your new payment would be FFF. There is no guarantee you will be able
to refinance your loan to a lower interest rate and payment before your initial
fixed interest rate ends.;</text>
</subclause><subclause id="IDb5b0889b3def475993e7b49b515c8da6"><enum>(II)</enum><text>the blank AAA in
subparagraph (I) to be filled in with the initial fixed interest rate;</text>
</subclause><subclause id="ID0f274fad611c4149ade3c7798934f241"><enum>(III)</enum><text>the blank BBB
in subparagraph (I) to be filled in with the payment amount under the initial
fixed interest rate;</text>
</subclause><subclause id="IDba04f543d23d4a6d9fca7211d84868c1"><enum>(IV)</enum><text>the blank CCC in
subparagraph (I) to be filled in with the loan reset date;</text>
</subclause><subclause id="ID231d18c7bcd5431c9de3f6772b2e86e2"><enum>(V)</enum><text>the blank DDD in
subparagraph (I) to be filled in with the adjustable rate as if the initial
rate expired on the date of disclosure under subparagraph (B);</text>
</subclause><subclause id="ID9e5303e322a8427fba8ab62112b26a45"><enum>(VI)</enum><text>the blank EEE in
subparagraph (I) to be filled in with the payment under the adjustable rate as
if the initial rate expired on the date of disclosure under subparagraph (B);
and</text>
</subclause><subclause id="ID6cf44bd294434101abf19ac044456a42"><enum>(VII)</enum><text>the blank FFF
in subparagraph (I) to be filled in with the payment under the adjustable rate
as if index rate on which the adjustable rate was one percent higher than of
the date of disclosure under subparagraph (B); and</text>
</subclause></clause><clause id="ID47736a9fd8b44a68889f4dc1b9d7a8b3"><enum>(iv)</enum><text>if the loan
contains a prepayment penalty—</text>
<subclause id="IDde64cbd28dbf4000a321602f34918ff8"><enum>(I)</enum><text>state in
conspicuous type and format the following phrase: This loan contains a
prepayment penalty. If you desire to pay off this loan before GGG, you will pay
a penalty of HHH.;</text>
</subclause><subclause id="ID0f314dbdaa3245e9b930228634264ab5"><enum>(II)</enum><text>the blank GGG in
subparagraph (I) to be filled in with the date the prepayment penalty expires;
and</text>
</subclause><subclause id="ID6b3c4a5a4bc74e98b0d59d2a2c58214f"><enum>(III)</enum><text>the blank HHH
in subparagraph (I) to be filled in with the prepayment penalty amount.</text>
</subclause></clause></subparagraph><subparagraph id="ID6568aaa5a7594857b8d6723db23624d9"><enum>(D)</enum><text>In any case in
which the disclosure statement provided 7 business days before the date of
consummation of the transaction contains an annual percentage rate of interest
that is no longer accurate, as determined under section 107(c), the creditor
shall furnish an additional, corrected statement to the borrower, not later
than 3 business days before the date of consummation of the
transaction.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID21fc5ebaedeb4f75b083b7b1b33eacc2"><enum>(b)</enum><header>Civil
liability</header><text>Section 130(a) of the Truth in Lending Act (15 U.S.C.
1640(a)) is amended—</text>
<paragraph id="IDa20b596177da42cabf8b7460ad7b6141"><enum>(1)</enum><text>in paragraph
(2)(A)(iii), by striking <quote>not less than $200 or greater than
$2,000</quote> and inserting <quote>$5,000, such amount to be adjusted annually
based on the consumer price index, to maintain current value</quote>;
and</text>
</paragraph><paragraph id="IDc65d55e056494e5b8631aa2e7140847f"><enum>(2)</enum><text>in the
penultimate sentence of the undesignated matter following paragraph (4)—</text>
<subparagraph id="ID20934f8091dd4c5aa3d50fa7e6bef58c"><enum>(A)</enum><text>by striking
<quote>only for</quote> and inserting <quote>for</quote>;</text>
</subparagraph><subparagraph id="IDf4261827bd5b4617841e98a4c4b1c34c"><enum>(B)</enum><text>by striking
<quote>section 125 or</quote> and inserting <quote>section 122, section
125,</quote>;</text>
</subparagraph><subparagraph id="ID0b22fdff10ae4c388d75ff56712e4cf6"><enum>(C)</enum><text>by inserting
<quote>or section 128(b),</quote> after <quote>128(a),</quote>; and</text>
</subparagraph><subparagraph id="ID767e17c3b677476aaf376fe291b206a5"><enum>(D)</enum><text>by inserting
<quote>or section 128(b)</quote> before the period.</text>
</subparagraph></paragraph></subsection></section><section id="IDF2B306F1EC2946B2A9FADC6CD59E0064" section-type="subsequent-section"><enum>305.</enum><header>Carryback of certain
net operating losses allowed for 5 years; temporary suspension of 90 percent
AMT limit</header>
<subsection id="IDD943244B9DEB4EE9985280327EEDEA04"><enum>(a)</enum><header>In
general</header><text>Subparagraph (H) of section 172(b)(1) of the Internal
Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idA72692128AA14D7793AAC4908BAEA451" style="OLC">
<subparagraph id="idC598B916365045FCBA79AA54E5298A60"><enum>(H)</enum><header>5-year
carryback of certain losses</header>
<clause id="id07DDAB8475FD4DAC8D0C4577DF2777F6"><enum>(i)</enum><header>Taxable years
ending during 2001 and 2002</header><text>In the case of a net operating loss
for any taxable year ending during 2001 or 2002, subparagraph (A)(i) shall be
applied by substituting <quote>5</quote> for <quote>2</quote> and subparagraph
(F) shall not apply.</text>
</clause><clause id="id489C33104EC946CEB63C04DDAD137BA5"><enum>(ii)</enum><header>Taxable years
ending during 2006, 2007, 2008, and 2009</header><text>In the case of a net
operating loss for any taxable year ending during 2006, 2007, 2008, or
2009—</text>
<subclause id="idC8362D5196424425B44AF9DEA92DCC6B"><enum>(I)</enum><text>subparagraph
(A)(i) shall be applied by substituting <quote>5</quote> for
<quote>2</quote>,</text>
</subclause><subclause id="id79EF2CBB8EF44E6AB9223320FBEDD6B2"><enum>(II)</enum><text>subparagraph
(E)(ii) shall be applied by substituting <quote>4</quote> for <quote>2</quote>,
and</text>
</subclause><subclause id="id1420B883D27E4091B4D54969FC72BA6A"><enum>(III)</enum><text>subparagraph
(F) shall not
apply.</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID70E44446FEB74F1B81A8C39E6047CEF1"><enum>(b)</enum><header>Temporary
suspension of 90 percent limit on certain NOL carrybacks and
carryovers</header>
<paragraph id="id1A45B12EA2E74ECD8F7406CD3455F064"><enum>(1)</enum><header>In
general</header><text>Section 56(d) of the of the Internal Revenue Code of 1986
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id2AAB59D8EF994C9FAD4C2E0B0FC2880E" style="OLC">
<paragraph id="idF092949B7FD64A1683A2F728245E8B29"><enum>(3)</enum><header>Additional
adjustments</header><text>For purposes of paragraph (1)(A), the amount
described in clause (I) of paragraph (1)(A)(ii) shall be increased by the
amount of the net operating loss deduction allowable for the taxable year under
section 172 attributable to the sum of—</text>
<subparagraph id="idC114BC22B3C7447F8EBF80D6E846446F"><enum>(A)</enum><text>carrybacks of net
operating losses from taxable years ending during 2006, 2007, 2008, and 2009,
and</text>
</subparagraph><subparagraph id="idE061D523FC534D6E9F11F8BBEED98A96"><enum>(B)</enum><text>carryovers of net
operating losses to taxable years ending during 2006, 2007, 2008, or
2009.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id1616A021C57C4E688548621183A01B25"><enum>(2)</enum><header>Conforming
amendment</header><text>Subclause (I) of section 56(d)(1)(A)(i) of such Code is
amended by inserting <quote>amount of such</quote> before <quote>deduction
described in clause (ii)(I)</quote>.</text>
</paragraph></subsection><subsection id="id43F87EDF37EA4DA78C56593B3AF3B88F"><enum>(c)</enum><header>Anti-abuse
rules</header><text>The Secretary of Treasury or the Secretary's designee shall
prescribes such rules as are necessary to prevent the abuse of the purposes of
the amendments made by this section, including anti-stuffing rules,
anti-churning rules (including rules relating to sale-leasebacks), and rules
similar to the rules under section 1091 of the Internal Revenue Code of 1986
relating to losses from wash sales.</text>
</subsection><subsection id="ID307DEB8A7A7B464084744F79833C2D7E"><enum>(d)</enum><header>Effective
dates</header>
<paragraph id="IDA1EBF98DB0C748709A9EBF12D6289B19"><enum>(1)</enum><header>Subsection
<enum-in-header>(a)</enum-in-header></header>
<subparagraph id="id82CBA5AA7375447ABF191BE2C81717CD"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraph (B), the amendments
made by subsection (a) shall apply to net operating losses arising in taxable
years ending in 2006, 2007, 2008, or 2009.</text>
</subparagraph><subparagraph id="ID44FA5E4C7A834A6FA35C8E255FB483C7"><enum>(B)</enum><header>Election</header><text>In
the case of a net operating loss for a taxable year ending during 2006 or
2007—</text>
<clause id="IDF006C55BB7F34FD69CD41D7FA073E603"><enum>(i)</enum><text>any
election made under section 172(b)(3) of the Internal Revenue Code of 1986 may
(notwithstanding such section) be revoked before November 1, 2008, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID51BB518D54FF477BA2D662BA715DC014"><enum>(ii)</enum><text>any election
made under section 172(j) of such Code shall (notwithstanding such section) be
treated as timely made if made before November 1, 2008.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD875F678C2274583993756996B965364"><enum>(2)</enum><header>Subsection
<enum-in-header>(b)</enum-in-header></header><text>The amendments made by
subsection (b) shall apply to taxable years ending after December 31,
1995.</text>
</paragraph></subsection></section><enum>IV</enum><header>Reducing the
litigation tax</header>
<section id="ID6373a4149e144213893b9e60591c62e4"><enum>401</enum><header>Limitation on
punitive damages for small businesses</header>
<subsection id="IDfdcba0c067d3438c9a0e2f5163d22c61"><enum>(a)</enum><header>Definition of
covered small business</header><text>In this section, the term <term>covered
small business</term> means any unincorporated business, or any partnership,
corporation, association, unit of local government, or organization—</text>
<paragraph id="id439627234CFC4BB19794F1B1AC327D69"><enum>(1)</enum><text>that has fewer
than 25 full-time employees as of the date that the relevant civil action is
filed; and</text>
</paragraph><paragraph id="idBCFB5162B7894E0D9338179E440BFA48"><enum>(2)</enum><text>the principal
place of business of which is in a State other than the State where the
relevant civil action is filed.</text>
</paragraph></subsection><subsection id="ID9c77098640bd43b4bf44de5ba3054986"><enum>(b)</enum><header>General
rule</header><text>Except as provided in subsection (c), in any civil action
filed in a Federal or State court against a covered small business, punitive
damages—</text>
<paragraph id="IDa774c4e5a2994f8abb664b195fd307ec"><enum>(1)</enum><text>may be awarded
against that covered small business only if the court finds by clear and
convincing evidence that conduct of that covered small business was—</text>
<subparagraph id="id61BF6CF14BD84E60836EF9633D074EDD"><enum>(A)</enum><text>carried out with
a conscious, flagrant indifference to the rights or safety of others;
and</text>
</subparagraph><subparagraph id="idF01E80F8800E4E12A5E2AD23220E9403"><enum>(B)</enum><text>the proximate
cause of the harm that is the subject of the civil action; and</text>
</subparagraph></paragraph><paragraph id="ID0389d3291c6e4ae3b9592c0d96051a3e"><enum>(2)</enum><text>shall not be
awarded against that covered small business in an amount greater than
$250,000.</text>
</paragraph></subsection><subsection id="ID56a816f337184b1cb37acf4cccfa6828"><enum>(c)</enum><header>Exceptions</header><text>This
section shall not apply to a civil action if the court finds by clear and
convincing evidence that—</text>
<paragraph id="ID1067cfc75e214971b93a609145e4cf71"><enum>(1)</enum><text>the covered small
business acted with specific intent to cause the type of harm that is the
subject of the civil action;</text>
</paragraph><paragraph id="ID85d95c8f55f2437086321d401fa35f96"><enum>(2)</enum><text>the conduct of
the covered small business constitute a criminal offense; or</text>
</paragraph><paragraph id="IDa9da3a0546944f1b8d2377f8d4e1fce9"><enum>(3)</enum><text>the conduct of
the covered small business resulted in serious environmental
degradation.</text>
</paragraph></subsection><subsection id="IDaea8d149f2684b21a0a2ccc83f60031d"><enum>(d)</enum><header>Application by
the court</header><text>The limitation on punitive damages under this section
shall be carried out by the court and shall not be disclosed to the jury, if
any.</text>
</subsection></section><section id="IDfe9dbe87c4ee4820a2881d653334cd39"><enum>402.</enum><header>Reasonableness
review of attorney’s fees</header>
<subsection id="idD159B182348F438B9208484A09294271"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">In any civil action
in a Federal or State court in which the damages awarded to a party exceed
$5,000,000, the court shall review the fees paid to any attorney for the
prevailing party and ensure that those fees are reasonable in light of the
hours of work actually performed by that attorney and the risk of nonpayment of
fees assumed by that attorney when that attorney agreed to represent the
party.</text>
</subsection><subsection id="id27F1B309716C4C66A18257FDF03C5846"><enum>(b)</enum><header>Unreasonable
fees</header><text>If a Federal or State court determines under subsection (a)
that the fees paid to an attorney for a prevailing party are not reasonable,
the court shall reduce the amount of that attorney's fees.</text>
</subsection><subsection id="idA9F03FAE0DD14D4A8737409708D6313E"><enum>(c)</enum><header>Assistance</header><text display-inline="yes-display-inline">A Federal or State court may, as
appropriate, retain the services of an independent accounting firm to assist
the court in conducting a review under this section.</text>
</subsection></section><section id="IDbc614bcdfb5446d1acffc0cddce5b41f"><enum>403.</enum><header>Partial award
of attorney’s fees for unreasonable lawsuits</header>
<subsection id="id2C429E597A044C8582B1DF95D3087B07"><enum>(a)</enum><header>In
general</header><text>In any civil action described in subsection (b), a court
shall award to a prevailing party 30 percent of the reasonable attorney’s fees
that were incurred by that prevailing party in connection with a claim
described in subsection (b)(2) after the date on which the party asserting that
claim knew or should have known of the facts that would require that claim to
be dismissed because there was no genuine issue of material fact.</text>
</subsection><subsection id="id72D4B245F6164FE284227F17E2C79BBB"><enum>(b)</enum><header>Civil
actions</header><text>A civil action described in this subsection is a civil
action—</text>
<paragraph id="id1F739856A5BE4E3FB94003FA27AAA3EB"><enum>(1)</enum><text>filed in a
Federal court or against a party whose principal residence or place of business
is in a State other than the State where the civil action is filed; and</text>
</paragraph><paragraph id="id25565DC13EBE4ED783BE183D304314B7"><enum>(2)</enum><text>in which the
court finds that no genuine issue of material fact exists with regard to a
claim that would allow a reasonable juror to find in favor of the party
presenting that claim.</text>
</paragraph></subsection></section><section id="ID6749ec37ac9f4a5aa62e728f16854725"><enum>404.</enum><header>Mandatory
sanctions for frivolous lawsuits</header>
<subsection id="IDd636c3bb2c3c406db63636bfe92795dd"><enum>(a)</enum><header>In
general</header><text>If a court of the United States (as that term is defined
in section 451 of title 28, United States Code) determines, whether on a motion
of a party or on its own motion, that there has been a violation of rule 11 of
the Federal Rules of Civil Procedure in any civil action, the court shall
impose upon the attorney, law firm, or pro se litigant that violated rule 11,
or is responsible for such violation, an appropriate sanction.</text>
</subsection><subsection id="ID46a6d6cee1eb4abfbdad05a97f642816"><enum>(b)</enum><header>Sanctions</header><text>A
sanction imposed under this section—</text>
<paragraph id="ID085fc43add954e49ba34c6b795f17476"><enum>(1)</enum><text>shall include an
order to pay any other party to the relevant civil action the reasonable
expenses incurred by that party as a direct result of the filing of the
pleading, motion, or other paper that is the subject of the violation of rule
11 of the Federal Rules of Civil Procedure, including reasonable attorney’s
fees; and</text>
</paragraph><paragraph id="IDbedb3218c3664752aa2de2dfbdada186"><enum>(2)</enum><text>shall be
sufficient to—</text>
<subparagraph id="IDfc8535ee444343ba9adf044812219296"><enum>(A)</enum><text>deter the
repetition of such conduct or comparable conduct by other similarly situated
persons; and</text>
</subparagraph><subparagraph id="IDb5ebd9720ee840a8889a34c3b68454e9"><enum>(B)</enum><text>compensate any
party injured by such conduct.</text>
</subparagraph></paragraph></subsection></section><section id="IDeca626d72bbc4ede8c7678e00aa0e448"><enum>405.</enum><header>Bar on junk
science in the courtroom</header>
<subsection id="IDa9cf3d4bcfea4d8fa40d032631be53ba"><enum>(a)</enum><header>In
general</header><text>In any civil action filed in a Federal court or against a
party whose principal residence or place of business is in a State other than
the State where the civil action is filed, if scientific, technical, or other
specialized knowledge will assist the fact finder to understand the evidence or
to determine a fact in issue, a witness qualified as an expert by knowledge,
skill, experience, training, or education, may give testimony relating to that
evidence or fact, in the form of an opinion or otherwise, if—</text>
<paragraph id="ID12969a26c5c24747867b92c52c4f956b"><enum>(1)</enum><text>the witness has
disclosed, upon the request of the opposing party, those facts or data upon
which the testimony of the witness is based or that are material to the
testimony of the witness;</text>
</paragraph><paragraph id="IDd67e56ddee0b4f6690ea03f876714035"><enum>(2)</enum><text>the testimony is
based upon sufficient facts or data;</text>
</paragraph><paragraph id="ID90ea887f79504313bce3e2806cc12341"><enum>(3)</enum><text>the testimony is
the product of reliable principles and methods; and</text>
</paragraph><paragraph id="IDd7d8c64cc49f4a3fa90a423c958d6ba4"><enum>(4)</enum><text>the witness has
applied the principles and methods reliably to the facts.</text>
</paragraph></subsection><subsection id="ID709773790042415e8a6c0cf05bd26591"><enum>(b)</enum><header>Review</header><text>A
trial court’s application of subsection (a) shall be subject to de novo
review.</text>
</subsection></section>
March 3, 2008
Read the second time and placed on the
calendar