1.
(a)This Act may be cited
as the American Infrastructure
Investment and Improvement Act of 2007
.
(b)Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms of an amendment to, or
repeal of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.
(c)The table of
contents for this Act is as follows:
Sec. 1. Short title, etc.
TITLE I—Airport and Airway Trust Fund provisions and related
taxes
Sec. 101. Extension of taxes funding Airport and Airway Trust
Fund.
Sec. 102. Extension of Airport and Airway Trust Fund
expenditure authority.
Sec. 103. Modification of excise tax on kerosene used in
aviation .
Sec. 104. Increase in tax on use of international air
facilities.
Sec. 105. Air Traffic Control System Modernization
Account.
Sec. 106. Treatment of fractional aircraft ownership
programs.
Sec. 107. Termination of exemption for small aircraft on
nonestablished lines.
Sec. 108. Transparency in passenger tax
disclosures.
Sec. 109. Required funding of new accruals under air carrier
pension plans.
TITLE II—Increased funding for Highway Trust Fund
Sec. 201. Replenish emergency spending from Highway Trust
Fund.
Sec. 202. Suspension of transfers from highway trust fund for
certain repayments and credit.
Sec. 203. Taxation of taxable fuels in foreign trade
zones.
Sec. 204. Clarification of penalty for sale of fuel failing to
meet EPA regulations.
Sec. 205. Treatment of qualified alcohol fuel mixtures and
qualified biodiesel fuel mixtures as taxable fuels.
Sec. 206. Calculation of volume of alcohol for fuel
credits.
Sec. 207. Bulk transfer exception not to apply to finished
gasoline.
Sec. 208. Increase and extension of Oil Spill Liability Trust
Fund tax.
Sec. 209. Application of rules treating inverted corporations
as domestic corporations to certain transactions occurring after March 20,
2002.
Sec. 210. Denial of deduction for punitive damages.
Sec. 211. Fuel technical corrections.
Sec. 212. Motor fuel tax enforcement advisory
commission.
Sec. 213. Highway Trust Fund conforming expenditure
amendment.
TITLE III—Additional infrastructure modifications and revenue
provisions
Sec. 301. Restructuring of New York
Liberty Zone tax credits.
Sec. 302. Participants in government section
457 plans allowed to treat elective deferrals
as Roth contributions.
Sec. 303. Increased information return penalties.
Sec. 304. Exemption of certain commercial cargo from harbor
maintenance tax.
Sec. 305. Credit to holders of qualified rail infrastructure
bonds.
Sec. 306. Repeal of suspension of certain penalties and
interest.
Sec. 307. Denial of deduction for certain fines, penalties, and
other amounts.
Sec. 308. Revision of tax rules on expatriation.
<enum>I</enum><header>Airport and
Airway Trust Fund provisions and related taxes</header>
<section id="id4E67F1E11B9244E98BE1EFD1C16D6195"><enum>101.</enum><header>Extension of
taxes funding Airport and Airway Trust Fund</header>
<subsection id="idD5D69020A5624FA9861A838716A9E5E3"><enum>(a)</enum><header>Fuel
taxes</header><text>Subparagraph (B) of section 4081(d)(2) is amended by
striking <quote>September 30, 2007</quote> and inserting <quote>September 30,
2011</quote>.</text>
</subsection><subsection id="id18E83613DA154021A4774076DDDFE686"><enum>(b)</enum><header>Ticket
taxes</header>
<paragraph id="id985C58A4ABD742B69B040B3B67313808"><enum>(1)</enum><header>Persons</header><text>Clause
(ii) of section 4261(j)(1)(A) is amended by striking <quote>September 30,
2007</quote> and inserting <quote>September 30, 2011</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idFCB1F09E25EC4B5CB9D5E5AE3E92C6E5"><enum>(2)</enum><header display-inline="yes-display-inline">Property</header><text display-inline="yes-display-inline">Clause (ii) of section 4271(d)(1)(A) is
amended by striking <quote>September 30, 2007</quote> and inserting
<quote>September 30, 2011</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idB8E73747D97A48AB88D7F41BFCA4B35B"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall take effect on October 1, 2007.</text>
</subsection></section><section id="id6D30C8145AD249D9929627F67B27C79A"><enum>102.</enum><header>Extension of
Airport and Airway Trust Fund expenditure authority</header>
<subsection id="idF79B78FF804A4612AE23502DB36DBC8E"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 9502(d) is amended—</text>
<paragraph id="id7E871CD9094242E7B9C43C4167A30C7A"><enum>(1)</enum><text>by striking
<quote>October 1, 2007</quote> in the matter preceding subparagraph (A) and
inserting <quote>October 1, 2011</quote>, and</text>
</paragraph><paragraph id="id68FD6711C22543FB80FCBEAC8FBF6290"><enum>(2)</enum><text>by striking the
semicolon at the end of subparagraph (A) and inserting <quote>or the Aviation
Investment and Modernization Act of 2007;</quote>.</text>
</paragraph></subsection><subsection id="id7414F6A57EFE4021BD8F1A1A91005F11"><enum>(b)</enum><header>Conforming
amendment</header><text>Paragraph (2) of section 9502(f) is amended by striking
<quote>October 1, 2007</quote> and inserting <quote>October 1,
2011</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idFE60F12B538744D890C40158760D8CB0"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall take effect on October 1, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="HD567DD90FC8C4D89BAD9F8C1006F60D0" section-type="subsequent-section"><enum>103.</enum><header>Modification of
excise tax on kerosene used in aviation </header>
<subsection id="H3FFDB8379A4047BD96F3BF4183EBE96E"><enum>(a)</enum><header>Rate of tax on
aviation-grade kerosene</header>
<paragraph id="id2DF20A156F0943BE9C83554E1A34AF1E"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Subparagraph (A) of
<external-xref legal-doc="usc" parsable-cite="usc/26/4081">section
4081(a)(2)</external-xref> (relating to rates of tax) is amended by striking
<quote>and</quote> at the end of clause (ii), by striking the period at the end
of clause (iii) and inserting <quote>, and</quote>, and by adding at the end
the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H160C0EA8C8CE41AA93BA69BB4C4CDA55" style="OLC">
<clause id="H5741C47543F1404EAA00255C84F389B"><enum>(iv)</enum><text display-inline="yes-display-inline">in the case of aviation-grade kerosene,
35.9 cents per
gallon.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H8F7269F7A0CE4C66833B00FBE361133"><enum>(2)</enum><header>Fuel removed
directly into fuel tank of airplane used in noncommercial
aviation</header><text>Subparagraph (C) of section 4081(a)(2) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HCFF96559DEA349B6841709373CB5DBE" style="OLC">
<subparagraph id="HCC931F81363E4728AA5DC0AC3E2CF4B6"><enum>(C)</enum><header>Taxes imposed on
fuel used in commercial aviation</header><text display-inline="yes-display-inline">In the case of aviation-grade kerosene
which is removed from any refinery or terminal directly into the fuel tank of
an aircraft for use in commercial aviation by a person registered for such use
under section 4101, the rate of tax under subparagraph (A)(iv) shall be 4.3
cents per
gallon.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HA273E224950149C8B1B84653CC4AEE"><enum>(3)</enum><header>Exemption for
aviation-grade kerosene removed into an aircraft</header><text>Subsection (e)
of section 4082 is amended—</text>
<subparagraph id="H5500C88E1B25457394E17C812E55B992"><enum>(A)</enum><text>by striking
<quote>kerosene</quote> and inserting <quote>aviation-grade
kerosene</quote>,</text>
</subparagraph><subparagraph id="HE73A2CFF91C74EEC87F2A4D45D5DD63F"><enum>(B)</enum><text>by striking
<quote>section 4081(a)(2)(A)(iii)</quote> and inserting <quote>section
4081(a)(2)(A)(iv) </quote>, and</text>
</subparagraph><subparagraph id="HADB669EA62F246658FED8C00EAB03D43"><enum>(C)</enum><text>by striking
<quote><header-in-text level="subsection" style="OLC">Kerosene</header-in-text></quote> in the heading and inserting
<quote><header-in-text level="subsection" style="OLC">Aviation-Grade
Kerosene</header-in-text></quote>.</text>
</subparagraph></paragraph><paragraph id="H04EEBBED6C494F6D9E00B23547A9A5C"><enum>(4)</enum><header>Conforming
amendments</header>
<subparagraph id="HF61D8A44D64D49A59CF700C8A300FDD"><enum>(A)</enum><text>Clause (iii) of
section 4081(a)(2)(A) is amended by inserting <quote>other than aviation-grade
kerosene</quote> after <quote>kerosene</quote>.</text>
</subparagraph><subparagraph id="H63E16E8261DD4159AFF9FD000420A4D1"><enum>(B)</enum><text>The following
provisions are each amended by striking <quote>kerosene</quote> and inserting
<quote>aviation-grade kerosene</quote>:</text>
<clause id="H55C1DF8D815641D780957892A500D95E"><enum>(i)</enum><text>Section
4081(a)(3)(A)(ii).</text>
</clause><clause id="H2C9C1D1777004E64AFE600CB109F21AA"><enum>(ii)</enum><text>Section
4081(a)(3)(A)(iv).</text>
</clause><clause id="H377F2AC69143450CBAAE09B34F566238"><enum>(iii)</enum><text display-inline="yes-display-inline">Section 4081(a)(3)(D).</text>
</clause></subparagraph><subparagraph id="HE97B312EF8A940A582902D32941809D1"><enum>(C)</enum><text>Section
4081(a)(3)(D) is amended—</text>
<clause id="H759057B9754041039C84CB12AF89DB56"><enum>(i)</enum><text>by
striking <quote>paragraph (2)(C)(i)</quote> in clause (i) and inserting
<quote>paragraph (2)(C)</quote>, and</text>
</clause><clause id="H65419D7A6DA14F9E962B16B65E15723E"><enum>(ii)</enum><text>by
striking <quote>paragraph (2)(C)(ii)</quote> in clause (ii) and inserting
<quote>paragraph (2)(A)(iv)</quote>.</text>
</clause></subparagraph><subparagraph id="HF3EE92C4967C4C4BA233FD552E97653B"><enum>(D)</enum><text>Section 4081(a)(4)
is amended—</text>
<clause id="id0146B86F025246DB9F4EF03E9DC4A90C"><enum>(i)</enum><text>in
the heading by striking <quote><header-in-text level="subparagraph" style="OLC">kerosene</header-in-text></quote> and inserting
<quote><header-in-text level="subparagraph" style="OLC">aviation-grade
kerosene</header-in-text></quote>, and</text>
</clause><clause id="id6C6E89D3FDEC47038903D918D5FAC755"><enum>(ii)</enum><text>by
striking <quote>paragraph (2)(C)(i)</quote> and inserting <quote>paragraph
(2)(C)</quote>.</text>
</clause></subparagraph><subparagraph id="H51E097B38F9245AC9D29978693FBF91B"><enum>(E)</enum><text>Section 4081(d)(2)
is amended by striking <quote>(a)(2)(C)(ii)</quote> and inserting
<quote>(a)(2)(A)(iv)</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="HDEE7754C61E34DBDA0A882351B128E76"><enum>(b)</enum><header>Retail tax on
aviation fuel</header>
<paragraph id="HB6058051484D427B85D161BE6B869303"><enum>(1)</enum><header>Exemption for
previously taxed fuel</header><text>Paragraph (2) of section 4041(c) is amended
by inserting <quote>at the rate specified in subsection (a)(2)(A)(iv)
thereof</quote> after <quote>section 4081</quote>.</text>
</paragraph><paragraph id="H0E174F93E87F43FEBCF85E53753C7C53"><enum>(2)</enum><header>Rate of
tax</header><text display-inline="yes-display-inline">Paragraph (3) of section
4041(c) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HEB3F345207404EC78ED600E037D06DB" style="OLC">
<paragraph id="H3790960FE9A34A4E9CA86B64ED1FD07C"><enum>(3)</enum><header>Rate of
tax</header><text>The rate of tax imposed by this subsection shall be the rate
of tax in effect under section 4081(a)(2)(A)(iv) (4.3 cents per gallon with
respect to any sale or use for commercial
aviation).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HE19B198C94534C2891926FCB4031E4EE"><enum>(c)</enum><header>Refunds relating
to aviation-grade kerosene</header>
<paragraph id="H964C69495E714A49BB1E772337E4E2EA"><enum>(1)</enum><header>Kerosene used in
commercial aviation</header><text>Clause (ii) of section 6427(l)(4)(A) is
amended by striking <quote>specified in section 4041(c) or 4081(a)(2)(A)(iii),
as the case may be,</quote> and inserting <quote>so imposed</quote>.</text>
</paragraph><paragraph id="H8D3FD2A1B37F4158B7E6C002B3FC9B3"><enum>(2)</enum><header>Kerosene used in
aviation</header><text>Paragraph (4) of section 6427(l) is amended—</text>
<subparagraph id="H3DC35884F8DF49D784537919F20D91F"><enum>(A)</enum><text>by striking
subparagraph (B) and redesignating subparagraph (C) as subparagraph (B),
and</text>
</subparagraph><subparagraph id="HDC205D43C81D44A49254CB09F218832C"><enum>(B)</enum><text>by amending
subparagraph (B), as redesignated by subparagraph (A), to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="HDCC59C3F076F4C4096717758005B9C52" style="OLC">
<subparagraph id="HEEFEE894A39646C400A95500AB84E1FA"><enum>(B)</enum><header>Payments to
ultimate, registered vendor</header><text display-inline="yes-display-inline">With respect to any kerosene used in
aviation (other than kerosene to which paragraph (6) applies), if the ultimate
purchaser of such kerosene waives (at such time and in such form and manner as
the Secretary shall prescribe) the right to payment under paragraph (1) and
assigns such right to the ultimate vendor, then the Secretary shall pay
(without interest) the amount which would be paid under paragraph (1) to such
ultimate vendor, but only if such ultimate vendor—</text>
<clause id="H7813FA9991DF4C9B808BC132FEDB471"><enum>(i)</enum><text>is
registered under section 4101, and</text>
</clause><clause id="H6994FFB37B2E49CD8B8D410200990034"><enum>(ii)</enum><text>meets the
requirements of subparagraph (A), (B), or (D) of section
6416(a)(1).</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H26193724CE8A44EDB392F158321194B3"><enum>(3)</enum><header>Aviation-grade
kerosene not used in aviation</header><text>Subsection (l) of section 6427 is
amended by redesignating paragraph (5) as paragraph (6) and by inserting after
paragraph (4) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HA90086D48FEA46C1B57B864310099EC9" style="OLC">
<paragraph id="H4922408B21024EA787E75F465D4706A7"><enum>(5)</enum><header>Refunds for
aviation-grade kerosene not used in aviation</header><text>If tax has been
imposed under section 4081 at the rate specified in section 4081(a)(2)(A)(iv)
and the fuel is used other than in an aircraft, the Secretary shall pay
(without interest) to the ultimate purchaser of such fuel an amount equal to
the amount of tax imposed on such fuel reduced by the amount of tax that would
be imposed under section 4041 if no tax under section 4081 had been
imposed.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HD184766D4EC04080BB5319C3C7148FCC"><enum>(4)</enum><header>Conforming
amendments</header>
<subparagraph id="HB7AD46EBC5C64E1A8136964010881F66"><enum>(A)</enum><text>Section
4082(d)(2)(B) is amended by striking <quote>6427(l)(5)(B)</quote> and inserting
<quote>6427(l)(6)(B)</quote>.</text>
</subparagraph><subparagraph id="H8C8740B9BA5A49C0B614AED95F0059DF"><enum>(B)</enum><text>Section 6427(i)(4)
is amended—</text>
<clause id="H104E786C6BBD4A0A8BE8C62345BA3CE5"><enum>(i)</enum><text>by
striking <quote>(4)(C)</quote> the first two places it occurs and inserting
<quote>(4)(B)</quote>, and</text>
</clause><clause id="H277E1ECF22EC4E8CA96C3213842092B2"><enum>(ii)</enum><text>by
striking <quote>, (l)(4)(C)(ii), and</quote> and inserting
<quote>and</quote>.</text>
</clause></subparagraph><subparagraph id="idC5F161E4290A4C9E9DCE1EF3EC081191"><enum>(C)</enum><text>The heading of
section 6427(l) is amended by striking <quote><header-in-text level="subsection" style="OLC">diesel fuel and
kerosene</header-in-text></quote> and inserting <quote><header-in-text level="subsection" style="OLC">diesel fuel, kerosene, and aviation
fuel</header-in-text></quote>.</text>
</subparagraph><subparagraph id="id7CD57285C1114F2893C666D11BBBD5A9"><enum>(D)</enum><text>Section
6427(l)(1) is amended by striking <quote>paragraph (4)(C)(i)</quote> and
inserting <quote>paragraph (4)(B)</quote>.</text>
</subparagraph><subparagraph id="idF97883E1769A40469A121AFA9909BA35"><enum>(E)</enum><text>Section
6427(l)(4) is amended—</text>
<clause id="id11C14BEE2F9C46A78F7233C0850037B1"><enum>(i)</enum><text>by
striking <quote><header-in-text level="paragraph" style="OLC">kerosene used in
aviation</header-in-text></quote> in the heading and inserting
<quote><header-in-text level="paragraph" style="OLC">aviation-grade kerosene
used in commercial aviation</header-in-text></quote>, and</text>
</clause><clause id="id7DC4D20F4155439AB92FAAA892DD31A9"><enum>(ii)</enum><text>in
subparagraph (A)—</text>
<subclause id="idB47D19AEE5144ED7BE54D75CECF2B5F9"><enum>(I)</enum><text>by striking
<quote>kerosene</quote> and inserting <quote>aviation-grade
kerosene</quote>,</text>
</subclause><subclause id="id9B91E42BB09248D1AEFCF11DD9D968A8"><enum>(II)</enum><text>by striking
<quote><header-in-text level="subparagraph" style="OLC">Kerosene used in
commercial aviation</header-in-text></quote> in the heading and inserting
<quote><header-in-text level="subparagraph" style="OLC">In
general</header-in-text></quote>.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="H7C0B135A3FAD41CF91D90588A8E3EC95"><enum>(d)</enum><header>Transfers to the
Airport and Airway Trust Fund</header>
<paragraph id="H13E73D51130C437CB7FBF15E851DD1D0"><enum>(1)</enum><header>In
general</header><text>Subparagraph (C) of section 9502(b)(1) is amended to read
as follows:</text>
<quoted-block display-inline="no-display-inline" id="HBFEBAACC5BF94920B6B247777C5E763" style="OLC">
<subparagraph id="H82BC6885B8904943B98EDDC1C5E23C9"><enum>(C)</enum><text display-inline="yes-display-inline">section 4081 with respect to aviation
gasoline and aviation-grade kerosene,
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HC6F202B4584041618E1E503400F9F699"><enum>(2)</enum><header>Transfers on
account of certain refunds</header>
<subparagraph id="H2DDCB59B32EE470B8E7317E5A9C64329"><enum>(A)</enum><header>In
general</header><text>Subsection (d) of section 9502 is amended—</text>
<clause id="H40D1A07BCABC40C0A44B78A62256146"><enum>(i)</enum><text display-inline="yes-display-inline">in paragraph (2) by striking <quote>(other
than subsection (l)(4) thereof)</quote>, and</text>
</clause><clause id="H1CC45BE9A6C14A0580D7DEB2B4273FC"><enum>(ii)</enum><text>in
paragraph (3) by striking <quote>(other than payments made by reason of
paragraph (4) of section 6427(l))</quote>.</text>
</clause></subparagraph><subparagraph id="H1E19909DD0F64243B9E3349313B96B22"><enum>(B)</enum><header>Conforming
amendments</header>
<clause id="H343F67B3B8714B3BA5B8AE1FCCDFF1E4"><enum>(i)</enum><text>Section 9503(b)(4)
is amended by striking <quote>or</quote> at the end of subparagraph (C), by
striking the period at the end of subparagraph (D) and inserting a comma, and
by inserting after subparagraph (D) the following:</text>
<quoted-block display-inline="no-display-inline" id="H363E293E8ED0402AA86F2BE200A92C79" style="OLC">
<subparagraph id="H2FD415B367544A438241BFD4BC9F4623"><enum>(E)</enum><text display-inline="yes-display-inline">section 4081 to the extent attributable to
the rate specified in clause (ii) or (iv) of section 4081(a)(2)(A), or</text>
</subparagraph><subparagraph id="HA2362B672EAD43ABB43329B1A9B9008C"><enum>(F)</enum><text>section
4041(c).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause><clause id="H3B4FA0937952469F80E472BA7BC4B715"><enum>(ii)</enum><text>Section 9503(c)
is amended by striking the last paragraph (relating to transfers from the Trust
Fund for certain aviation fuel taxes).</text>
</clause><clause id="id2A3AD8BA04DC425BB96832F65BB38B14"><enum>(iii)</enum><text>Section 9502(a)
is amended—</text>
<subclause id="id2220A586BFDD492E9A53CD8A20E1CB63"><enum>(I)</enum><text>by striking
<quote>appropriated, credited, or paid into</quote> and inserting
<quote>appropriated or credited to</quote>, and</text>
</subclause><subclause id="id2EA810A51E824A82B56A20916F6DF027"><enum>(II)</enum><text>by striking
<quote>, section 9503(c)(7),</quote>.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="H568366D1CBB9440099391C5D23F923A3"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuels
removed, entered, or sold after December 31, 2007.</text>
</subsection><subsection display-inline="no-display-inline" id="H878E18A316C542A0BD1FC5D11EE48B84"><enum>(f)</enum><header>Floor stocks
tax</header>
<paragraph id="H53CB94F785CC4466BA3411B08ECBDBE"><enum>(1)</enum><header>Imposition of
tax</header><text display-inline="yes-display-inline">In the case of aviation
fuel which is held on January 1, 2008, by any person, there is hereby imposed a
floor stocks tax on aviation fuel equal to—</text>
<subparagraph id="HCBC0F0D5BA9E4814949951F4723EF36"><enum>(A)</enum><text>the tax which would
have been imposed before such date on such fuel had the amendments made by this
section been in effect at all times before such date, reduced by</text>
</subparagraph><subparagraph id="H5740E7D5107B4A338217C6AA6C8FD851"><enum>(B)</enum><text>the sum of—</text>
<clause id="H28AF792849164843B9F3713B07E1FC2F"><enum>(i)</enum><text>the
tax imposed before such date on such fuel under section 4081 of the Internal
Revenue Code of 1986, as in effect on such date, and</text>
</clause><clause id="HF776EB2E27D544CA932874DAF08F3C31"><enum>(ii)</enum><text>in
the case of kerosene held exclusively for such person’s own use, the amount
which such person would (but for this clause) reasonably expect (as of such
date) to be paid as a refund under section 6427(l) of such Code with respect to
such kerosene.</text>
</clause></subparagraph></paragraph><paragraph id="HAC475BE9EDA348C783B0759715E0542B"><enum>(2)</enum><header>Liability for
tax and method of payment</header>
<subparagraph id="H58FF540F312148BD994199F3F8BD74AB"><enum>(A)</enum><header>Liability for
tax</header><text display-inline="yes-display-inline">A person holding aviation
fuel on January 1, 2008, shall be liable for such tax.</text>
</subparagraph><subparagraph id="H5EA65311CADD49DCBE83EDA0D44282F5"><enum>(B)</enum><header>Time and method
of payment</header><text display-inline="yes-display-inline">The tax imposed by
paragraph (1) shall be paid at such time and in such manner as the Secretary of
the Treasury shall prescribe.</text>
</subparagraph></paragraph><paragraph id="H708FCE18480C47C38FF3E470F0FFDC21"><enum>(3)</enum><header>Transfer of
floor stock tax revenues to trust funds</header><text display-inline="yes-display-inline">For purposes of determining the amount
transferred to the Airport and Airway Trust Fund, the tax imposed by this
subsection shall be treated as imposed by section 4081(a)(2)(A)(iv) of the
Internal Revenue Code of 1986.</text>
</paragraph><paragraph id="HCADC28D0AD4244849965DE06BEF6FEF"><enum>(4)</enum><header>Definitions</header><text>For
purposes of this subsection—</text>
<subparagraph id="HF04B232918C3499300EB865803137DA6"><enum>(A)</enum><header>Aviation
fuel</header><text>The term <term>aviation fuel</term> means aviation-grade
kerosene and aviation gasoline, as such terms are used within the meaning of
<external-xref legal-doc="usc" parsable-cite="usc/26/4081">section
4081</external-xref> of the Internal Revenue Code of 1986.</text>
</subparagraph><subparagraph id="HCC3781FF38834B828B02DB9C771DD68C"><enum>(B)</enum><header>Held by a
person</header><text>Aviation fuel shall be considered as held by a person if
title thereto has passed to such person (whether or not delivery to the person
has been made).</text>
</subparagraph><subparagraph id="H1B6C7FBC66C54454A7844CF3E100FAA5"><enum>(C)</enum><header>Secretary</header><text>The
term <term>Secretary</term> means the Secretary of the Treasury or the
Secretary’s delegate.</text>
</subparagraph></paragraph><paragraph id="H9D32531FFAAF49A1B211FFE667608B3"><enum>(5)</enum><header>Exception for
exempt uses</header><text>The tax imposed by paragraph (1) shall not apply to
any aviation fuel held by any person exclusively for any use to the extent a
credit or refund of the tax is allowable under the Internal Revenue Code of
1986 for such use.</text>
</paragraph><paragraph id="HA21353DB81D0439C83B85325A7283CDA"><enum>(6)</enum><header>Exception for
certain amounts of fuel</header>
<subparagraph id="H200561F8BE694D34A566C376FDAC75DC"><enum>(A)</enum><header>In
general</header><text>No tax shall be imposed by paragraph (1) on any aviation
fuel held on January 1, 2008, by any person if the aggregate amount of such
aviation fuel held by such person on such date does not exceed 2,000 gallons.
The preceding sentence shall apply only if such person submits to the Secretary
(at the time and in the manner required by the Secretary) such information as
the Secretary shall require for purposes of this subparagraph.</text>
</subparagraph><subparagraph id="H3838013495044CDB8B6186B75176D400"><enum>(B)</enum><header>Exempt
fuel</header><text>For purposes of subparagraph (A), there shall not be taken
into account any aviation fuel held by any person which is exempt from the tax
imposed by paragraph (1) by reason of paragraph (6).</text>
</subparagraph><subparagraph id="HEC56090AF0CC491980006F6800791260"><enum>(C)</enum><header>Controlled
groups</header><text>For purposes of this subsection—</text>
<clause id="HBCF85823BE7F45C29B32E9D34870010"><enum>(i)</enum><header>Corporations</header>
<subclause id="HE49000A83D00499CA5496EC910248722"><enum>(I)</enum><header>In
general</header><text>All persons treated as a controlled group shall be
treated as 1 person.</text>
</subclause><subclause id="HEE9C2AA03C9841E8A59600F124F56C46"><enum>(II)</enum><header>Controlled
group</header><text>The term <term>controlled group</term> has the meaning
given to such term by subsection (a) of section 1563 of the Internal Revenue
Code of 1986; except that for such purposes the phrase <quote>more than 50
percent</quote> shall be substituted for the phrase <quote>at least 80
percent</quote> each place it appears in such subsection.</text>
</subclause></clause><clause id="H6A5EED8E93AE488FA35E78A538CBB855"><enum>(ii)</enum><header>Nonincorporated
persons under common control</header><text>Under regulations prescribed by the
Secretary, principles similar to the principles of subparagraph (A) shall apply
to a group of persons under common control if 1 or more of such persons is not
a corporation.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H365CED3B37E941589F8E65CC48E2EC02"><enum>(7)</enum><header>Other laws
applicable</header><text>All provisions of law, including penalties, applicable
with respect to the taxes imposed by section 4081 of the Internal Revenue Code
of 1986 on the aviation fuel involved shall, insofar as applicable and not
inconsistent with the provisions of this subsection, apply with respect to the
floor stock taxes imposed by paragraph (1) to the same extent as if such taxes
were imposed by such section.</text>
</paragraph></subsection></section><section id="id4693C0C39A614A8AB049164C3E2B5A0C"><enum>104.</enum><header>Increase in
tax on use of international air facilities</header>
<subsection id="id106FFFEAA11844BE9D125CC78263C1E7"><enum>(a)</enum><header>In
general</header><text>Section 4261(c)(1) is amended by striking
<quote>$12.00</quote> and inserting <quote>$16.65</quote>.</text>
</subsection><subsection id="idA4B4099FE0B049F283D5A8D294F35B70"><enum>(b)</enum><header>Inflation
adjustment</header><text>Section 4261(e)(4)(B) is amended—</text>
<paragraph id="id5F672A7649D0466989DD6ED68060DF26"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of clause (i),</text>
</paragraph><paragraph id="idCD1B956FCA50419FB1BD9E912E001694"><enum>(2)</enum><text>by striking
<quote>amounts contained in subsection (c).</quote> in clause (ii) and
inserting <quote>amount contained in subsection (c)(3), and</quote>, and</text>
</paragraph><paragraph id="id55DEBE76300544D3BB24E04D36C199AB"><enum>(3)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block act-name="" id="idB3C606E5E63648EBA6270EDD95318E6E" style="OLC">
<clause id="id66CD84AF195C47E7BB9E1DA96BD8FFA2"><enum>(iii)</enum><text>2008 in the
case of the dollar amount contained in subsection
(c)(1).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id8D17EAA474D04B379F698C88A1AA93DC"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on
January 1, 2008.</text>
</subsection></section><section id="id66C0D89ADABC44AC989AA9A6FE232A46"><enum>105.</enum><header>Air Traffic
Control System Modernization Account</header>
<subsection id="idEE526B65A3AD49E5B3423C2281F14C94"><enum>(a)</enum><header>In
general</header><text>Section 9502 (relating to the Airport and Airway Trust
Fund) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id43926350905840148769E5EA68D870BC" style="OLC">
<subsection id="id7A6284F1F46347EABC88CFA7C8B24B86"><enum>(g)</enum><header>Establishment
of Air Traffic Control System Modernization Account</header>
<paragraph id="IDed8ac133ea1a41138beb9acd0321df72"><enum>(1)</enum><header>Creation of
Account</header><text>There is established in the Airport and Airway Trust Fund
a separate account to be known as the <quote>Air Traffic Control System
Modernization Account</quote> consisting of such amounts as may be transferred
or credited to the Air Traffic Control System Modernization Account as provided
in this subsection or section 9602(b).</text>
</paragraph><paragraph id="ID93fbd10c047d4edca423bffa36c6f78e"><enum>(2)</enum><header>Transfers to
Air Traffic Control System Modernization Account</header><text>The Secretary of
the Treasury shall annually transfer from the Airport and Airway Trust Fund to
the Air Traffic Control System Modernization Account an amount equal to
$400,000,000.</text>
</paragraph><paragraph id="ID4bc56c24ba154ce5bc154ca11f9c1dd3"><enum>(3)</enum><header>Expenditures
from Account</header><text>Amounts in the Air Traffic Control System
Modernization Account shall be available to the Administrator of the Federal
Aviation Administration for expenditures relating the modernization of the air
traffic control system (including facility and equipment account expenditures)
approved by the Air Traffic Control Modernization Oversight
Board.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id22B9CFD65B4E4E7688C174305F8AF18E"><enum>(b)</enum><header>Conforming
amendment</header><text>Section 9502(d)(1) is amended by striking
<quote>Amounts</quote> and inserting <quote>Except as provided in subsection
(g), amounts</quote>.</text>
</subsection><subsection id="idE08403A3EA88422FBBC45B26C58BE6A0"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="id57F11C053465412FA8A81E00B70B8BA1"><enum>106.</enum><header>Treatment of
fractional aircraft ownership programs</header>
<subsection id="idA3721F9B2FF846868AE80604B427A188"><enum>(a)</enum><header>Departure tax
in lieu of persons and property tax</header>
<paragraph id="id284058DA7DE848DCA41D1B18E329214B"><enum>(1)</enum><header>Departure
tax</header>
<subparagraph id="idCBEF9BF0268243BBABF7B163E9E9DFD4"><enum>(A)</enum><header>In
general</header><text>Subchapter C of chapter 33 is amended by redesignating
part III as part IV and by inserting after part II the following new
part:</text>
<quoted-block display-inline="no-display-inline" id="idD14B7FCBF5E347A68CE608E533EB54FE" style="OLC">
<part id="id93426BD7162B478391099066649C19DE"><enum>III</enum><header>Departures</header>
<toc>
<toc-entry idref="id0B201F8380504A66A6374202A2F0B4C9" level="section">Sec. 4266. Fractional aircraft ownership programs.</toc-entry>
</toc>
<section id="id0B201F8380504A66A6374202A2F0B4C9"><enum>4266.</enum><header>Fractional
aircraft ownership programs</header>
<subsection id="id308A593ABDBF449B893284F38EF39930"><enum>(a)</enum><header>In
general</header><text>There is hereby imposed a tax of $58 on each departure of
an aircraft which is part of a fractional ownership aircraft program.</text>
</subsection><subsection id="id1C7B17E879B84DFCB38937C5AB456DED"><enum>(b)</enum><header>Fractional
ownership aircraft program</header><text>For purposes of this section—</text>
<paragraph id="idAB4C26C80C1547278B678818148A6C56"><enum>(1)</enum><header>In
general</header><text>The term <term>fractional ownership aircraft
program</term> means a program under which—</text>
<subparagraph id="ID625cc06e66c142fb82d0ece8d415c2c4"><enum>(A)</enum><text>a single
fractional ownership program manager provides fractional ownership program
management services on behalf of the fractional owners,</text>
</subparagraph><subparagraph id="IDccce393f8f6243808f7ac6bac8c5588f"><enum>(B)</enum><text>2 or more
airworthy aircraft are part of the program,</text>
</subparagraph><subparagraph id="ID8f8a27b364694e03aa496ed433f27629"><enum>(C)</enum><text>there are 1 or
more fractional owners per program aircraft, with at least 1 program aircraft
having more than 1 owner,</text>
</subparagraph><subparagraph id="IDdfdce230fdd74182bb029688627b7b98"><enum>(D)</enum><text>each fractional
owner possesses at least a minimum fractional ownership interest in 1 or more
program aircraft,</text>
</subparagraph><subparagraph id="IDc038e6bb10b8477791f7e253211aa3fa"><enum>(E)</enum><text>there exists a
dry-lease exchange arrangement among all of the fractional owners, and</text>
</subparagraph><subparagraph id="ID75bf719cfb1c41d5a6f814d9dda2e578"><enum>(F)</enum><text>there are
multi-year program agreements covering the fractional ownership, fractional
ownership program management services, and dry-lease aircraft exchange aspects
of the program.</text>
</subparagraph></paragraph><paragraph id="id211B8D26E86F49A98FE1475DE72C4BFD"><enum>(2)</enum><header>Minimum
fractional ownership interest</header><text>The term <term>minimum fractional
ownership interest</term> means, with respect to each type of aircraft—</text>
<subparagraph id="idDF5B4C5DDDA04EAA8CB8E03FF4F1E614"><enum>(A)</enum><text>a fractional
ownership interest equal to or greater than <fraction>1/16</fraction> of at
least 1 subsonic, fixed wing or powered lift program aircraft, or</text>
</subparagraph><subparagraph id="IDb9581337f69c4f71bf48a68469799cbe"><enum>(B)</enum><text>a fractional
ownership interest equal to or greater than <fraction>1/32</fraction> of a
least 1 rotorcraft program aircraft.</text>
</subparagraph></paragraph><paragraph id="idC4B91A8B3198484FBC374180E93D8879"><enum>(3)</enum><header>Dry-lease
exchange arrangement</header><text>A <term>dry-lease aircraft exchange</term>
means an agreement, documented by the written program agreements, under which
the program aircraft are available, on an as needed basis without crew, to each
fractional owner.</text>
</paragraph></subsection><subsection id="id21F26C6A56E345C8A6CE5613D8B3E634"><enum>(c)</enum><header>Application of
taxes</header>
<paragraph id="id962DF827645D42779AF8DCC38C667F90"><enum>(1)</enum><header>In
general</header><text>The taxes imposed by this section shall apply to
departures during the period beginning on January 1, 2008, and ending on
September 30,
2011.</text>
</paragraph></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id0EDC62BC3EB548469940A2AC7744E327"><enum>(B)</enum><header>Transfer of
revenues to Airport and Airway Trust Fund</header><text>Section 9502(b)(1)(B)
is amended by striking <quote>and 4271</quote> and inserting <quote>4266, and
4271</quote>.</text>
</subparagraph><subparagraph id="id417F7360C41A4988BC620CBE4340221B"><enum>(C)</enum><header>Conforming
amendments</header><text>The table of parts for subchapter C of chapter 33 is
amended by redesignating the item relating to part III as relating to part IV
and by inserting after the item relating to part II the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="idB98D84FB0E6E4F3D929F3A45F25F3748" style="OLC">
<toc>
<toc-entry bold="off" level="section">Part III.
Departures.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id1F8174A4C33B44188DC0F9198D36DCFB"><enum>(2)</enum><header>Exemption from
tax on transportation of persons</header><text>Section 4261, as amended by
section 101(b)(1), is amended by redesignating subsection (j) as subsection (k)
and by inserting after subsection (i) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id6D83D8C149C74AD382554413A32B849A" style="OLC">
<subsection id="id75F16C0EF36D49A3B6B8BB92A2E3807C"><enum>(j)</enum><header>Exemption for
aircraft in fractional ownership aircraft programs</header><text>No tax shall
be imposed by this section on any air transportation by an aircraft which is
part of a fractional ownership aircraft program (as defined by section
4266(b)).</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id2C3DD8B6CE1A452187662850F73DAC31"><enum>(b)</enum><header>Treatment of
programs under fuel taxes</header><text>Subsection (b) of section 4083 is
amended by adding at the end the following new sentence: <quote>Such term shall
not include the use of any aircraft which is part of a fractional ownership
aircraft program (as defined by section 4266(b)).</quote>.</text>
</subsection><subsection id="id87D8C247011745A2AD367551F3E9EE80"><enum>(c)</enum><header>Effective
dates</header>
<paragraph id="id71F75B52A15E4F14B9919E929390ED98"><enum>(1)</enum><header>Departure
tax</header><text>The amendments made by subsection (a) shall apply to
transportation beginning after December 31, 2007.</text>
</paragraph><paragraph id="id1C5E1FE509B84CB09F8F041D875CD183"><enum>(2)</enum><header>Fuel
taxes</header><text>The amendment made by subsection (b) shall apply to fuel
sold or used after December 31, 2007.</text>
</paragraph></subsection></section><section id="idD2246AA065214623A14C63508BDCC9DB"><enum>107.</enum><header>Termination of
exemption for small aircraft on nonestablished lines</header>
<subsection id="id90996B73B59243EAB6698BC2CFF3E39D"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 4281 is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id9587445CBD1C4C0899CC768864D1F5D9" style="OLC">
<section id="id39200E51B307411A98FFA3B670658F8A"><enum>4281.</enum><header>Small
aircraft operated solely for sightseeing</header><text display-inline="no-display-inline">The taxes imposed by sections 4261 and 4271
shall not apply to transportation by an aircraft having a maximum certificated
takeoff weight of 6,000 pounds or less at any time during which such aircraft
is being operated on a flight the sole purpose of which is sightseeing. For
purposes of the preceding sentence, the term <term>maximum certificated takeoff
weight</term> means the maximum such weight contained in the type certificate
or airworthiness
certificate.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id2408E3E4A6314BA4AACEFC68CA10C64C"><enum>(b)</enum><header>Conforming
amendment</header><text>The item relating to section 4281 in the table of
sections for part III of subchapter C of chapter 33 is amended by striking
<quote>on nonestablished lines</quote> and inserting <quote>operated solely for
sightseeing</quote>.</text>
</subsection><subsection id="idB443626B75584E708354E2A84568B920"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transportation beginning after December 31, 2007.</text>
</subsection></section><section id="idB32D845887E844368C4B19F278FF12D8"><enum>108.</enum><header>Transparency
in passenger tax disclosures</header>
<subsection id="id02FDD74015CD4E21AC54D9986CDC6D84"><enum>(a)</enum><header>In
general</header><text>Section 7275 (relating to penalty for offenses relating
to certain airline tickets and advertising) is amended—</text>
<paragraph id="id6AB95A38E4604C0D830E3D8291925E5A"><enum>(1)</enum><text>by redesignating
subsection (c) as subsection (d),</text>
</paragraph><paragraph id="id5EE4287E79BC4CE89BDD88940861CB2C"><enum>(2)</enum><text>by striking
<quote>subsection (a) or (b)</quote> in subsection (d), as so redesignated, and
inserting <quote>subsection (a), (b), or (c)</quote>, and</text>
</paragraph><paragraph id="id61B415A405D04B68826AF04CA111B558"><enum>(3)</enum><text>by inserting
after subsection (b) the following new subsection:</text>
<quoted-block act-name="" id="id964FCFC8F9BA4B44821B7B5E2489AF62" style="OLC">
<subsection id="idD3C720A223B74C57BACE79699656F6DF"><enum>(c)</enum><header>Non-tax
charges</header>
<paragraph id="idF80A36EA23914EBDBDABF9656C05E347"><enum>(1)</enum><header>In
general</header><text>In the case of transportation by air for which disclosure
on the ticket or advertising for such transportation of the amounts paid for
passenger taxes is required by subsection (a)(2) or (b)(1)(B), it shall be
unlawful for the disclosure of the amount of such taxes on such ticket or
advertising to include any amounts not attributable to the taxes imposed by
subsection (a), (b), or (c) of section 4261.</text>
</paragraph><paragraph id="id9177BD27180041C7AE06490EF7DCA42C"><enum>(2)</enum><header>Inclusion in
transportation cost</header><text>Nothing in this subsection shall prohibit the
inclusion of amounts not attributable to the taxes imposed by subsection (a),
(b), or (c) of section 4261 in the disclosure of the amount paid for
transportation as required by subsection (a)(1) or (b)(1)(A), or in a separate
disclosure of amounts not attributable to such
taxes.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id2FF6C5A3680345A791DBDB197AF73B66"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transportation beginning after December 31, 2007.</text>
</subsection></section><section id="id927EF35005574BABA1DCCC9C9633079D"><enum>109.</enum><header>Required
funding of new accruals under air carrier pension plans</header>
<subsection id="id11B6640B79A5419CA73E6BBEA5C97870"><enum>(a)</enum><header>In
general</header><text>Section 402(a) of the Pension Protection Act of 2006, as
amended by section 6615(a) of the U. S. Troop Readiness, Veterans' Care,
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law
110–28), is amended—</text>
<paragraph id="id489A2B852E214EE3A4A517DDF8425EC1"><enum>(1)</enum><text>in paragraph
(2)—</text>
<subparagraph id="idCCED4B14660C4741B5252BA357975B8B"><enum>(A)</enum><text>by striking
<quote>to its first taxable year beginning in 2008</quote>,</text>
</subparagraph><subparagraph id="id9F37EFCF19BC4D98BCEBE45445C0E1AD"><enum>(B)</enum><text>by striking
<quote>for such taxable year</quote> and inserting <quote>for its first plan
year beginning in 2008</quote>, and</text>
</subparagraph><subparagraph id="id61C13D156E9E4652A6723B69A8DEB4F5"><enum>(C)</enum><text>by striking
<quote>and by using, in determining the funding target for each of the 10 plan
years during such period, an interest rate of 8.25 percent (rather than the
segment rates calculated on the basis of the corporate bond yield
curve)</quote>, and</text>
</subparagraph></paragraph><paragraph id="idF38C88E84FEE48D78172C48CF61B7C1C"><enum>(2)</enum><text>by adding at the
end the following new flush matter:</text>
<quoted-block display-inline="no-display-inline" id="idC99E1F37D3294ABE8D29828C36C0723C" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subsection">If the
plan sponsor of an eligible plan elects the application of paragraph (2), the
plan sponsor may also elect, in determining the funding target for each of the
10 plan years during the period described in paragraph (2), to use an interest
rate of 8.25 percent (rather than the segment rates calculated on the basis of
the corporate bond yield curve). Notwithstanding the preceding sentence, in the
case of any plan year of the eligible plan for which such 8.25 percent interest
rate is used, the minimum required contribution under section 303 of such Act
and section 430 of such Code shall in no event be less than the target normal
cost of the plan for such plan year (as determined under section 303(b) of such
Act and section 430(b) of such Code). A plan sponsor may revoke the election to
use the 8.25 percent interest rate and if the revocation is made, the
revocation shall apply to the plan year for which made and all subsequent plan
years and the plan sponsor may not elect to use the 8.25 percent interest rate
for any subsequent plan
year.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id6CA61A4556A441F9A2FF0D530217A37A"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect as if
included in the provisions of the Pension Protection Act of 2006 to which such
amendments relate.</text>
</subsection></section><enum>II</enum><header>Increased
funding for Highway Trust Fund</header>
<section id="idC61ADBC3727C4D5F92A852CEBEA7FEE5"><enum>201.</enum><header>Replenish
emergency spending from Highway Trust Fund</header>
<subsection id="id782B06CCCC6E4AC9B5240E278E651F85"><enum>(a)</enum><header>In
general</header><text>Section 9503(b) is amended—</text>
<paragraph id="id8536B9118550413C9A4F37B265491C67"><enum>(1)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id53FE865CD8D94D4C9BC813311F7B3CD0" style="OLC">
<paragraph id="id81392A219D5F4EF892438E0396BF5D51"><enum>(7)</enum><header>Emergency
spending replenishment</header><text>There is hereby appropriated to the
Highway Trust Fund $3,400,000,000.</text>
</paragraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="id72C85022FCD34F94A4F6959B50F71E81"><enum>(2)</enum><text>by striking
<quote><header-in-text level="subsection" style="OLC">amounts equivalent to
certain taxes and penalties</header-in-text></quote> in the heading and
inserting <quote><header-in-text level="subsection" style="OLC">certain
amounts</header-in-text></quote>.</text>
</paragraph></subsection><subsection id="idF47F8E9E2BBD435DB407AFA462B53664"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="id8BDF5305B2354F8E94D553CFBE5C9D06"><enum>202.</enum><header>Suspension of
transfers from highway trust fund for certain repayments and
credit</header><text display-inline="no-display-inline">Section 9503(c)(2) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block act-name="" id="id0C5C4752826641CEB8E99A8B949B19A5" style="OLC">
<subparagraph id="id9D3AC766B19B4141A7090FFBCDBA9000"><enum>(D)</enum><header>Temporary
suspension</header><text>This paragraph shall not apply to amounts estimated by
the Secretary to be attributable to the 6-month period beginning on the date of
the enactment of the <short-title>American Infrastructure
Investment and Improvement Act of
2007</short-title>.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id46A5B6BAA09141CEAE650DE5D0673E71"><enum>203.</enum><header>Taxation of
taxable fuels in foreign trade zones</header>
<subsection id="id8F9A3C8FF0444102A4D85C3077FB35BD"><enum>(a)</enum><header>Tax imposed on
removals and entries in foreign trade zones</header>
<paragraph id="idC59F5207FB90493CB4CEC09BCA7D054C"><enum>(1)</enum><header>In
general</header><text>Subsection (a) of section 4083 (relating to definitions)
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id797424A7EBB94943A4729AC32A48ED3D" style="OLC">
<paragraph id="idD15BC2E9C8884C59908C10FFF1F4483B"><enum>(4)</enum><header>United
States</header><text>The term <term>United States</term> includes any foreign
trade zone or bonded warehouse located in the United
States.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idF76CE878F503471EBA474E5876F53096"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 4081(a)(1)(A) (relating to imposition of tax)
is amended—</text>
<subparagraph id="id9791FA97EF574B409D337E8C5BD75979"><enum>(A)</enum><text>in clause (i), by
inserting <quote>in the United States</quote> after <quote>refinery</quote>;
and</text>
</subparagraph><subparagraph id="idCBA9426C88444A1C8C241E41A37BCB46"><enum>(B)</enum><text>in clause (ii),
by inserting <quote>in the United States</quote> after
<quote>terminal</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" id="id414EDC51260C43DB8F1F13FE2A58EF55"><enum>(b)</enum><header>Treatment of
taxable fuel in foreign trade zones</header><text>Paragraph (2) of section
81c(a) of title 19, United States Code, is amended by inserting <quote>(other
than the provisions relating to taxable fuel (as defined under section 4083(a)
of the Internal Revenue Code of 1986))</quote> after
<quote>thereunder</quote>.</text>
</subsection><subsection id="id6DCF1BE6286144BB8B700F0A548D955A"><enum>(c)</enum><header>Effective
dates</header>
<paragraph id="id769328FC18674E5FAD75D525054386E2"><enum>(1)</enum><header>Subsection
<enum-in-header>(a)</enum-in-header></header><text>The amendments made by
subsection (a) shall apply to removals and entries after December 31,
2007.</text>
</paragraph><paragraph id="idA0387336101F4CB4AE3C4C5C8BE708BE"><enum>(2)</enum><header>Subsection
<enum-in-header>(b)</enum-in-header></header><text>The amendment made by
subsection (b) shall take effect on January 1, 2008.</text>
</paragraph></subsection></section><section id="id5AE30E695C3144A6B37C0813753B2E62"><enum>204.</enum><header>Clarification
of penalty for sale of fuel failing to meet EPA regulations</header>
<subsection id="id5ACE48BE22EB409AACC17E49DCF06E8B"><enum>(a)</enum><header>In
general</header><text>Subsection (a) of section 6720A (relating to penalty with
respect to certain adulterated fuels) is amended by striking <quote>applicable
EPA regulations (as defined in section 45H(c)(3))</quote> and inserting
<quote>the requirements for diesel fuel under section 211 of the Clean Air Act,
as determined by the Secretary,</quote>.</text>
</subsection><subsection id="idDC314831FEB94FCEB3B7A028C13B8D93"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to any
transfer, sale, or holding out for sale or resale occurring after the date of
the enactment of this Act.</text>
</subsection></section><section id="id43F46B875C0E431B9B78A28E121F54B9"><enum>205.</enum><header>Treatment of
qualified alcohol fuel mixtures and qualified biodiesel fuel mixtures as
taxable fuels</header>
<subsection id="idD1D06D3916504B138E29D48827FEFC0A"><enum>(a)</enum><header>In
general</header>
<paragraph id="id934B47298C9F452A8EF3B6BE19E14357"><enum>(1)</enum><header>Qualified
alcohol fuel mixtures</header><text>Paragraph (2) of section 4083(a) (relating
to gasoline) is amended—</text>
<subparagraph id="id07486DAE855A467D881D543335CB917F"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of subparagraph (A),</text>
</subparagraph><subparagraph id="id4D31371055B1418D91457B62D56896BC"><enum>(B)</enum><text>by redesignating
subparagraph (B) as subparagraph (C), and</text>
</subparagraph><subparagraph id="id26AEA26C034D4CF0A845F3213EDEFFD9"><enum>(C)</enum><text>by inserting
after subparagraph (A) the following new subparagraph:</text>
<quoted-block act-name="" id="id78E8202C9693459688299A1FA42A9583" style="OLC">
<subparagraph id="id1A2D545F0D324DF59FA5342BDFDEB207"><enum>(B)</enum><text>includes any
qualified mixture (as defined in section 40(b)(1)(B)) which is a mixture of
alcohol and special fuel,
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idFAF8A478D16042CDB2B12F145D5E4409"><enum>(2)</enum><header>Qualified
biodiesel fuel mixtures</header><text>Subparagraph (A) of section 4083(a)(3)
(relating to diesel fuel) is amended by striking <quote>and</quote> at the end
of clause (ii), by redesignating clause (iii) as clause (iv), and inserting
after clause (ii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="id68864E0BD7034AAE9DB19A9164F252A1" style="OLC">
<clause id="idCDD4466D7974405689E7CD4CE4BB91A1"><enum>(iii)</enum><text>any qualified
biodiesel mixture (as defined in section 40A(b)(1)(B)),
and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idB644EE0E384F4A3AA69EB849BD4EF54E"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuels
removed, entered, or sold after December 31, 2007.</text>
</subsection></section><section id="id6B9B826F252B4ADF81FFE5871525CA0D"><enum>206.</enum><header>Calculation of
volume of alcohol for fuel credits</header>
<subsection id="id7173D11982ED46E48A2B6942E18EF1FD"><enum>(a)</enum><header>In
general</header><text>Paragraph (4) of section 40(d) (relating to volume of
alcohol) is amended by striking <quote>the volume of alcohol</quote> and all
that follows and inserting <quote>the volume of alcohol shall not include any
denaturant added to such alcohol.</quote>.</text>
</subsection><subsection id="idC025ECBAE62544A7BF555B6649D9C2C2"><enum>(b)</enum><header>Conforming
amendment for excise tax credit</header><text>Section 6426(b) (relating to
alcohol fuel mixture credit) is amended by redesignating paragraph (5) as
paragraph (6) and by inserting after paragraph (4) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id6F9D66166D1D43B198EA03A958DA2005" style="OLC">
<paragraph id="id513CF80D18184E189F7D3FEF0466A5A9"><enum>(5)</enum><header>Volume of
alcohol</header><text>For purposes of determining under subsection (a) the
number of gallons of alcohol with respect to which a credit is allowable under
subsection (a), the volume of alcohol shall not include any denaturant added to
such
alcohol.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idFCC7DC2C7F4A4DCBBCD72B87A260E51A"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuel sold
or used after December 31, 2007.</text>
</subsection></section><section id="id57A2D7A2E48C435C832A8DCA35D02F85"><enum>207.</enum><header>Bulk transfer
exception not to apply to finished gasoline</header>
<subsection id="idBD9196F190EA4E4D99A87D8F020AB4AC"><enum>(a)</enum><header>In
general</header><text>Subparagraph (B) of section 4081(a)(1) (relating to tax
on removal, entry, or sale) is amended by adding at the end the following new
clause:</text>
<quoted-block display-inline="no-display-inline" id="id1AFA70826E0043A8AEC31CD5C17EC9A7" style="OLC">
<clause id="idEF74347CD1F14D71B9BD7CA2BBC61741"><enum>(iii)</enum><header>Exception for
finished gasoline</header><text>Clause (i) shall not apply to any finished
gasoline.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id533B677948B0486F82C63F11DFAE70D3"><enum>(b)</enum><header>Exception to
tax on finished gasoline for prior taxable removals</header><text>Paragraph (1)
of section 4081(a) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id48FB11086A8548B7857B04F63E9BD19E" style="OLC">
<subparagraph id="idB5A5E8F9A19C4D1AB8611E76700A89F1"><enum>(C)</enum><header>Exemption for
previously taxed finished gasoline</header><text>The tax imposed by this
paragraph shall not apply to the removal of gasoline described in subparagraph
(B)(iii) from any terminal if there was a prior taxable removal or entry of
such fuel under clause (i), (ii), or (iii) of subparagraph (A). The preceding
sentence shall not apply to the volume of any product added to such gasoline at
the terminal unless there was a prior taxable removal or entry of such product
under clause (i), (ii), or (iii) of subparagraph
(A).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idE420DBCB504D4FA392946B839101790A"><enum>(c)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to fuel
removed, entered, or sold after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id17038F2BC56B469EB4B28F2470119A73"><enum>208.</enum><header>Increase and
extension of Oil Spill Liability Trust Fund tax</header>
<subsection commented="no" display-inline="no-display-inline" id="idC66C4EE020134C848AE9CE151754F7CB"><enum>(a)</enum><header>Increase in
rate</header>
<paragraph commented="no" display-inline="no-display-inline" id="idD68EBFFC94B348299AA49A3DDBAE73B1"><enum>(1)</enum><header>In
general</header><text>Section 4611(c)(2)(B) (relating to rates) is amended by
striking <quote>5 cents</quote> and inserting <quote>10 cents</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id82129EEE1408407C946F1805F763C4AF"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall apply on and
after the first day of the first calendar quarter beginning more than 60 days
after the date of the enactment of this Act.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id3C7BDC25D6CE44008215960FB39D2DF7"><enum>(b)</enum><header>Extension</header>
<paragraph commented="no" display-inline="no-display-inline" id="idC028B5A6457A4E469643F7DD032ACBD0"><enum>(1)</enum><header>In
general</header><text>Section 4611(f) (relating to application of Oil Spill
Liability Trust Fund financing rate) is amended by striking paragraphs (2) and
(3) and inserting the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id6691D90F8CA0436FA49A7C1DD7590479" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idE0E222046207489286D475C5C0765521"><enum>(2)</enum><header>Termination</header><text>The
Oil Spill Liability Trust Fund financing rate shall not apply after December
31,
2017.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idBBDE02E418264B1FB8E5BC2E36099680"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 4611(f)(1) is amended by striking
<quote>paragraphs (2) and (3)</quote> and inserting <quote>paragraph
(2)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idF750E6D570754A01A1EC180F1C26D0A3"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall take effect on
the date of the enactment of this Act.</text>
</paragraph></subsection></section><section id="ID7B307CD8CCD94E88BE4B84B9B98D9D33"><enum>209.</enum><header>Application of
rules treating inverted corporations as domestic corporations to certain
transactions occurring after March 20, 2002</header>
<subsection id="ID8EBC6756D8794893994DBF0036330AF3"><enum>(a)</enum><header>In
General</header><text>Section 7874(b) (relating to inverted corporations
treated as domestic corporations) is amended to read as follows:</text>
<quoted-block id="ID5E02F325A2F74F4ABE600A776B57029B" style="OLC">
<subsection id="ID1C3DF99AC0104796AA9B2FB68FE9B9C5"><enum>(b)</enum><header>Inverted
Corporations Treated as Domestic Corporations</header>
<paragraph id="ID1186566772284C5A91C6E352607D6725"><enum>(1)</enum><header>In
general</header><text>Notwithstanding section 7701(a)(4), a foreign corporation
shall be treated for purposes of this title as a domestic corporation if such
corporation would be a surrogate foreign corporation if subsection (a)(2) were
applied by substituting <quote>80 percent</quote> for <quote>60
percent</quote>.</text>
</paragraph><paragraph id="IDFE9164EE23C5432BA42C491815716D2D"><enum>(2)</enum><header>Special rule
for certain transactions occurring after march 20, 2002</header>
<subparagraph id="IDA7AE5E21273E45A2BCF24497124360FD"><enum>(A)</enum><header>In
general</header><text>If—</text>
<clause id="ID2F2139A6340C414D9A648320320DF788"><enum>(i)</enum><text>paragraph (1)
does not apply to a foreign corporation, but</text>
</clause><clause id="IDE5BF29AAE11F41E995D65566C0BB981D"><enum>(ii)</enum><text>paragraph (1)
would apply to such corporation if, in addition to the substitution under
paragraph (1), subsection (a)(2) were applied by substituting <quote>March 20,
2002</quote> for <quote>March 4, 2003</quote> each place it appears,</text>
</clause><continuation-text continuation-text-level="subparagraph">then
paragraph (1) shall apply to such corporation but only with respect to taxable
years of such corporation beginning after the date of the enactment of the
<short-title>American Infrastructure Investment and
Improvement Act of 2007</short-title>.</continuation-text></subparagraph><subparagraph id="ID01208E16D7604BE3AD98BF3580A49FD7"><enum>(B)</enum><header>Special
rules</header><text>Subject to such rules as the Secretary may prescribe, in
the case of a corporation to which paragraph (1) applies by reason of this
paragraph—</text>
<clause id="ID603D60CE7463493F8DEEE0958527E716"><enum>(i)</enum><text>the corporation
shall be treated, as of the close of its first taxable year ending after the
date of the enactment of the <short-title>American
Infrastructure Investment and Improvement Act of 2007</short-title>, as having
transferred all of its assets, liabilities, and earnings and profits to a
domestic corporation in a transaction with respect to which no tax is imposed
under this title,</text>
</clause><clause id="ID86C1B522A1684299AB1A2AEA204C06DE"><enum>(ii)</enum><text>the bases of the
assets transferred in the transaction to the domestic corporation shall be the
same as the bases of the assets in the hands of the foreign corporation,
subject to any adjustments under this title for built-in losses,</text>
</clause><clause id="IDD545339C05924CB3AB7CA48C6EC255BA"><enum>(iii)</enum><text>the basis of
the stock of any shareholder in the domestic corporation shall be the same as
the basis of the stock of the shareholder in the foreign corporation for which
it is treated as exchanged, and</text>
</clause><clause id="IDA7C07391059D460ABEAC3B4CC215A448"><enum>(iv)</enum><text>the transfer of
any earnings and profits by reason of clause (i) shall be disregarded in
determining any deemed dividend or foreign tax creditable to the domestic
corporation with respect to such transfer.</text>
</clause></subparagraph><subparagraph id="IDF31E1DB3171143E791B46DE3C403F1D0"><enum>(C)</enum><header>Regulations</header><text>The
Secretary may prescribe such regulations as may be necessary or appropriate to
carry out this paragraph, including regulations to prevent the avoidance of the
purposes of this
paragraph.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID3387483908AB41B8B4AE111FD1C162E9"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section><section id="ID1E48DF1423794AE092683A7FAEF7A531"><enum>210.</enum><header>Denial of
deduction for punitive damages</header>
<subsection id="ID530ED1BB20A14D239339833F2E0CB488"><enum>(a)</enum><header>Disallowance of
Deduction</header>
<paragraph id="IDAD37A56DA60C4EF9B0CAF5BCCFF207FA"><enum>(1)</enum><header>In
general</header><text>Section 162(g) (relating to treble damage payments under
the antitrust laws) is amended—</text>
<subparagraph id="IDC7FE43BBB293461E8BCA2B11395A3240"><enum>(A)</enum><text>by redesignating
paragraphs (1) and (2) as subparagraphs (A) and (B), respectively,</text>
</subparagraph><subparagraph id="ID4862C7391A524B91AA1B48E6BF204522"><enum>(B)</enum><text>by striking
<quote>If</quote> and inserting:</text>
<quoted-block id="IDFE4689556956494F86462C731C3FCF2C" style="OLC">
<paragraph id="IDC089515FAE234BFBAC4BDB66F9E2A1B6"><enum>(1)</enum><header>Treble
damages</header><text>If</text>
</paragraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="ID974EEE6BD04B4A9AA48AFA8488F6D809"><enum>(C)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="ID8132BD420A3749A1A39E37DEC3C6B3E3" style="OLC">
<paragraph id="IDA73289F7F718445BAA3721724E5D477C"><enum>(2)</enum><header>Punitive
damages</header><text>No deduction shall be allowed under this chapter for any
amount paid or incurred for punitive damages in connection with any judgment
in, or settlement of, any action. This paragraph shall not apply to punitive
damages described in section
104(c).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="IDDC34B5074D144E62AC38BC13062E5E58"><enum>(2)</enum><header>Conforming
amendment</header><text>The heading for section 162(g) is amended by inserting
<quote><header-in-text level="subsection">Or Punitive
Damages</header-in-text></quote> after <quote><header-in-text level="subsection">Laws</header-in-text></quote>.</text>
</paragraph></subsection><subsection id="ID5C52D25B1C114E458E0B43B9BE8297EC"><enum>(b)</enum><header>Inclusion in
Income of Punitive Damages Paid by Insurer or Otherwise</header>
<paragraph id="ID9E032565986148948CD243173AA5F94F"><enum>(1)</enum><header>In
general</header><text>Part II of subchapter B of chapter 1 (relating to items
specifically included in gross income) is amended by adding at the end the
following new section:</text>
<quoted-block id="ID63C196773D6E4DACA9D655FF3500ACEC" style="OLC">
<section id="ID130F47243CCF410D9ECDA7B09A0B6D4D"><enum>91.</enum><header>Punitive
damages compensated by insurance or otherwise</header><text display-inline="no-display-inline">Gross income shall include any amount paid
to or on behalf of a taxpayer as insurance or otherwise by reason of the
taxpayer’s liability (or agreement) to pay punitive
damages.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID675B7AA8BD4F40D0B19C41FBD4705BA8"><enum>(2)</enum><header>Reporting
requirements</header><text>Section 6041 (relating to information at source) is
amended by adding at the end the following new subsection:</text>
<quoted-block id="IDAD4D3B9159D64250A46CE30BFA63759B" style="OLC">
<subsection id="IDE9BB9C5200964C2E9DF770363501F905"><enum>(h)</enum><header>Section To
Apply to Punitive Damages Compensation</header><text>This section shall apply
to payments by a person to or on behalf of another person as insurance or
otherwise by reason of the other person’s liability (or agreement) to pay
punitive
damages.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID066550A0F47F4C4EB908BFD7D12BE025"><enum>(3)</enum><header>Conforming
amendment</header><text>The table of sections for part II of subchapter B of
chapter 1 is amended by adding at the end the following new item:</text>
<quoted-block id="IDA8FAE867E25643FFAC0F72003573AAC6" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 91. Punitive damages compensated by
insurance or
otherwise.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID0EB89A4674784EC7841C7EFAD1EDB8E5"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to damages
paid or incurred on or after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idCA208F2B5BF34B768D999243CEE8B2D8"><enum>211.</enum><header>Fuel technical
corrections</header>
<subsection display-inline="no-display-inline" id="idDDA4C6AA4AD7411AB2013A823A496D89"><enum>(a)</enum><header>Amendments
related to section 11113 of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users</header>
<paragraph display-inline="no-display-inline" id="idE0AE7162A8C848739DB0C37729684A68"><enum>(1)</enum><text>Paragraph (3) of
section 6427(i) is amended—</text>
<subparagraph id="idFFCD8045542240218F4AA9BB83F13413"><enum>(A)</enum><text>by inserting
<quote>or under subsection (e)(2) by any person with respect to an alternative
fuel (as defined in section 6426(d)(2))</quote> after <quote>section
6426</quote> in subparagraph (A),</text>
</subparagraph><subparagraph id="id8C5B94DF7B2D49C48153A34A40FBA22B"><enum>(B)</enum><text>by inserting
<quote>or (e)(2)</quote> after <quote>subsection (e)(1)</quote> in
subparagraphs (A)(i) and (B), and</text>
</subparagraph><subparagraph id="id088E719121334A42AB4B80EB9D46D2E0"><enum>(C)</enum><text>by inserting
<quote><header-in-text level="paragraph" style="OLC">and alternative fuel
credit</header-in-text></quote> after <quote><header-in-text level="paragraph" style="OLC">mixture credit</header-in-text></quote> in the heading
thereof.</text>
</subparagraph></paragraph><paragraph id="id56BF8E3379304E3D83CB0B52062F1CCF"><enum>(2)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id2ECD38CE67004DF7A06EC8C41C89D214"><enum>(A)</enum><text>Subparagraph (F) of
section 6426(d)(2) is amended by striking <quote>hydrocarbons</quote> and
inserting <quote>fuel</quote>.</text>
</subparagraph><subparagraph commented="no" id="id24E73ADCA05849CA9E039B2A40115F46" indent="up1"><enum>(B)</enum><text>Section 6426 is amended by adding at
the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idECC3456C8EE147CFBDE5B490C4621DF2" style="OLC">
<subsection commented="no" id="id280AF2C2622B42239D4FFA160A3A55B2"><enum>(h)</enum><header>Denial of
double benefit</header><text>No credit shall be determined under subsection (d)
or (e) with respect to any fuel which is described in subsection (b) or (c) or
section 40 or
40A.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id79206B5E53A048E9938A4CB653933030"><enum>(3)</enum><text>The amendments
made by this subsection shall take effect as if included in section 11113 of
the SAFETEA–LU.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idFA4B6BE3FB3441268CBDA17A677EADB2"><enum>(b)</enum><header>Amendments
related to the Energy Policy Act of 2005</header>
<paragraph commented="no" id="idCBC069D2890C42C593D98A536C71AD5C"><enum>(1)</enum><header>Amendment
related to section 1342 of the Act</header>
<subparagraph commented="no" id="idE29782291F794D8181F91975043342F9"><enum>(A)</enum><text>So much of
subsection (b) of section 30C as precedes paragraph (1) thereof is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idD25F1ACC4D5E4EA595213B0A62AE6CA8" style="OLC">
<subsection commented="no" id="id010E3F7198E94698897E53AF3F11AD1E"><enum>(b)</enum><header>Limitation</header><text>The
credit allowed under subsection (a) with respect to all alternative fuel
vehicle refueling property placed in service by the taxpayer during the taxable
year at a location shall not
exceed—</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id5AB3F89B1BAF4EA9A0537DBAAE9F42F8"><enum>(B)</enum><text>Subsection (c) of
section 30C is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id237E8AA97069443CAC142B93BCE3421F" style="OLC">
<subsection id="idE1B68D7A16F64D63BEC686AFDFB805A7"><enum>(c)</enum><header>Qualified
alternative fuel vehicle refueling property</header><text>For purposes of this
section, the term <term>qualified alternative fuel vehicle refueling
property</term> has the same meaning as the term <quote>qualified clean-fuel
vehicle refueling property</quote> would have under section 179A if—</text>
<paragraph id="id6A8F49F45D154FD68B00EED2A4505287"><enum>(1)</enum><text>paragraph (1) of
section 179A(d) did not apply to property installed on property which is used
as the principal residence (within the meaning of section 121) of the taxpayer,
and</text>
</paragraph><paragraph id="idD35CE39E49E64D77BF96D82E08867357"><enum>(2)</enum><text>only the
following were treated as clean burning fuels for purposes of section
179A(d):</text>
<subparagraph id="id90BD72AE2DAF4D17ADC12281C24F3B0A"><enum>(A)</enum><text>Any fuel at least
85 percent of the volume of which consists of one or more of the following:
ethanol, natural gas, compressed natural gas, liquified natural gas, liquefied
petroleum gas, or hydrogen.</text>
</subparagraph><subparagraph id="idD005646D34E940BAA57023C5851BFFB6"><enum>(B)</enum><text>Any
mixture—</text>
<clause id="id79E5E7B930484EBF9839B5A6E30FA4CC"><enum>(i)</enum><text>which consists of
two or more of the following: biodiesel (as so defined), diesel fuel (as
defined in section 4083(a)(3)), or kerosene, and</text>
</clause><clause id="idFD848DD9FFD145F09D841FE02B547A4D"><enum>(ii)</enum><text>at least 20
percent of the volume of which consists of biodiesel (as so defined) determined
without regard to any kerosene in such
mixture.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="id8FFCB852EE1B4099AAE53E20A5CE49DB"><enum>(2)</enum><header>Amendments
related to section 1362 of the Act</header>
<subparagraph id="idE8B975B191744A7295F3D2DBD5C0B834"><enum>(A)</enum><clause commented="no" display-inline="yes-display-inline" id="id8CA5CF63F20B417BBD25A2B56EEB568A"><enum>(i)</enum><text>Paragraph (1) of
section 4041(d) is amended by adding at the end the following new sentence:
<quote>No tax shall be imposed under the preceding sentence on the sale or use
of any liquid if tax was imposed with respect to such liquid under section 4081
at the Leaking Underground Storage Tank Trust Fund financing
rate.</quote>.</text>
</clause><clause id="id259CC1D2178C4EA4AB1757617FC9C161" indent="up1"><enum>(ii)</enum><text>Paragraph (3) of section 4042(b)
is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idB92FCBF05C9145E8B6B0E5C4F4E1DC32" style="OLC">
<paragraph id="id8B229F1F93DD406BAD3C04C20F770D6B"><enum>(3)</enum><header>Exception for
fuel on which Leaking Underground Storage Tank Trust Fund financing rate
separately imposed</header><text>The Leaking Underground Storage Tank Trust
Fund financing rate under paragraph (2)(B) shall not apply to the use of any
fuel if tax was imposed with respect to such fuel under section 4041(d) or 4081
at the Leaking Underground Storage Tank Trust Fund financing
rate.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause><clause id="idD48E9DDC288B44C1B52E0A7DB18F09C1" indent="up1"><enum>(iii)</enum><text display-inline="yes-display-inline">Notwithstanding section 6430 of the
Internal Revenue Code of 1986, a refund, credit, or payment may be made under
subchapter B of chapter 65 of such Code for taxes imposed with respect to any
liquid after September 30, 2005, and before the date of the enactment of this
Act under section 4041(d)(1) or 4042 of such Code at the Leaking Underground
Storage Tank Trust Fund financing rate to the extent that tax was imposed with
respect to such liquid under section 4081 at the Leaking Underground Storage
Tank Trust Fund financing rate.</text>
</clause></subparagraph><subparagraph id="id39D536217EF44A908ECBE9F999644593"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="idAB0B0520AA884740B927247557F4B46A"><enum>(i)</enum><text>Paragraph (5) of
section 4041(d) is amended—</text>
<subclause id="id4A60543C894944679F2CEEEA6857385F" indent="up1"><enum>(I)</enum><text>by striking <quote>(other than with
respect to any sale for export under paragraph (3) thereof)</quote>, and</text>
</subclause><subclause id="id72815428B3A54E888E85EF322E62C987" indent="up1"><enum>(II)</enum><text>by adding at the end the following new
sentence: <quote>The preceding sentence shall not apply with respect to
subsection (g)(3) and so much of subsection (g)(1) as relates to vessels
(within the meaning of section 4221(d)(3)) employed in foreign trade or trade
between the United States and any of its possessions.</quote></text>
</subclause></clause><clause id="idCD7CA123FD554B7D949570990F75169E" indent="up1"><enum>(ii)</enum><text>Section 4082 is amended—</text>
<subclause id="id8D98175BAC564FA3B5DD032129DA4751"><enum>(I)</enum><text>by striking <quote>(other than such tax
at the Leaking Underground Storage Tank Trust Fund financing rate imposed in
all cases other than for export)</quote> in subsection (a), and</text>
</subclause><subclause id="id03C3F306EC604683B2A4F194CFD00E9D"><enum>(II)</enum><text>by redesignating subsections (f) and (g)
as subsections (g) and (h) and by inserting after subsection (e) the following
new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idBA02DB8B091C4C5898A05F939615C472" style="OLC">
<subsection id="id76367C80CC7E40578DC28F3C9AFDE8C1"><enum>(f)</enum><header>Exception for
Leaking Underground Storage Tank Trust Fund financing rate</header>
<paragraph id="id419336A039724D34AFA6C1DABB7E3CC9"><enum>(1)</enum><header>In
general</header><text>Subsection (a) shall not apply to the tax imposed under
section 4081 at the Leaking Underground Storage Tank Trust Fund financing
rate.</text>
</paragraph><paragraph id="idCD86B030B3B244DCBDE2C3ACA9F0CB8D"><enum>(2)</enum><header>Exception for
export, etc</header><text>Paragraph (1) shall not apply with respect to any
fuel if the Secretary determines that such fuel is destined for export or for
use by the purchaser as supplies for vessels (within the meaning of section
4221(d)(3)) employed in foreign trade or trade between the United States and
any of its
possessions.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subclause></clause><clause id="id12B3742C25A74270B5CABAF58DD882A6" indent="up1"><enum>(iii)</enum><text>Subsection (e) of section 4082,
as amended by this Act, is amended—</text>
<subclause id="idD2362BF22D1E4F3F99CA2C3B6F8DA755"><enum>(I)</enum><text>by striking <quote>an aircraft, the rate
of tax under section 4081(a)(2)(A)(iv) shall be zero.</quote> and
inserting</text>
<quoted-block display-inline="yes-display-inline" id="id209E3240CF1C4F4392116B60F4C3542A" style="OLC">
<text>an
aircraft—</text><paragraph id="id74BBD2EB59F4444BA465DC360792BC13"><enum>(1)</enum><text>the rate of tax
under section 4081(a)(2)(A)(iv) shall be zero, and</text>
</paragraph><paragraph id="id49A2652BEF6343FFB051EF00310AEBCD"><enum>(2)</enum><text display-inline="yes-display-inline">if such aircraft is employed in foreign
trade or trade between the United States and any of its possessions, the
increase in such rate under section 4081(a)(2)(B) shall be
zero.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subclause><subclause id="id085E2EFE108A4C7492626541DD200907"><enum>(II)</enum><text>by moving the last sentence flush with
the margin of such subsection (following the paragraph (2) added by clause
(i)).</text>
</subclause></clause><clause id="idEEF3377BD4B24B42A0F98C050D18FB7E" indent="up1"><enum>(iv)</enum><text>Section 6430 is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id1101BF2DE0EF4BE0B94AF859F3A76ED6" style="OLC">
<section id="idF66E5E61259B4F0E9D72D7CE551E0252"><enum>6430.</enum><header>Treatment of
tax imposed at Leaking Underground Storage Tank Trust Fund financing
rate</header><text display-inline="no-display-inline">No refunds, credits, or
payments shall be made under this subchapter for any tax imposed at the Leaking
Underground Storage Tank Trust Fund financing rate, except in the case of
fuels—</text>
<paragraph id="idD1949798376C4477A365502022D5010A"><enum>(1)</enum><text>which are exempt
from tax under section 4081(a) by reason of section 4082(f)(2),</text>
</paragraph><paragraph id="id029F5A4B8F5A493E8E12EE3DEC7235BD"><enum>(2)</enum><text>which are exempt
from tax under section 4041(d) by reason of the last sentence of paragraph (5)
thereof, or</text>
</paragraph><paragraph id="id58DDDD39B43A4DCCA700B3C0B2A8F0EB"><enum>(3)</enum><text display-inline="yes-display-inline">with respect to which the rate increase
under section 4081(a)(2)(B) is zero by reason of section
4082(e)(2).</text>
</paragraph></section><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph><subparagraph id="idFD91E9C10EA74CDA8420E065155A8E34"><enum>(C)</enum><text>Paragraph (5) of
section 4041(d) is amended by inserting <quote>(b)(1)(A),</quote> after
<quote>subsections</quote>.</text>
</subparagraph></paragraph><paragraph id="id2DCF9D5A76284777BF73FE135531A27B"><enum>(3)</enum><header>Effective
date</header>
<subparagraph id="id199CE37403A249F38ABE50C9B4FA339D"><enum>(A)</enum><header>In
general</header><text>Except as otherwise provided in this paragraph, the
amendments made by this subsection shall take effect as if included in the
provisions of the Energy Policy Act of 2005 to which they relate.</text>
</subparagraph><subparagraph id="id87D1B75B487F4E89B538D8940D976BAB"><enum>(B)</enum><header>Nonapplication
of exemption for off-highway business use</header><text>The amendment made by
paragraph (2)(C) shall apply to fuel sold for use or used after the date of the
enactment of this Act.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE2841B30E54B4C1E9E1A100BC7C4582E"><enum>(C)</enum><header>Amendment made
by the SAFETEA–LU</header><text>The amendment made by paragraph (2)(B)(iii)(II)
shall take effect as if included in section 11161 of the SAFETEA–LU.</text>
</subparagraph></paragraph></subsection><subsection id="id5940715D4ECE4D34A73FDEEE858294FA"><enum>(c)</enum><header>Amendments
related to section 339 of the American Jobs Creation Act of 2004</header>
<paragraph id="id73A5605BA8FF4BC49C930BD8DA7BBA9F"><enum>(1)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id675173CB587443B98B812D8F3517474B"><enum>(A)</enum><text>Section 45H is amended
by striking subsection (d) and by redesignating subsections (e), (f), and (g)
as subsections (d), (e), and (f), respectively.</text>
</subparagraph><subparagraph id="idDEDF5DFCF5234AF6821183002A95B79C" indent="up1"><enum>(B)</enum><text>Subsection (d) of section 280C is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id1B6B40269E4740B9A76D531A1D175520" style="OLC">
<subsection id="id18D757CFB0EE4373A039301E3A80BBD3"><enum>(d)</enum><header>Credit for low
sulfur diesel fuel production</header><text>The deductions otherwise allowed
under this chapter for the taxable year shall be reduced by the amount of the
credit determined for the taxable year under section
45H(a).</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id584D276188D840279DC29670EED0D04E" indent="up1"><enum>(C)</enum><text>Subsection (a) of section 1016 is
amended by striking paragraph (31) and by redesignating paragraphs (32) through
(37) as paragraphs (31) through (36), respectively.</text>
</subparagraph></paragraph><paragraph id="idD265B7844A724B5AA85A7EDBB146EB5D"><enum>(2)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id5BC9489CCED14E688F5BF1EB3E3C7AB8"><enum>(A)</enum><text>Section 45H, as amended
by paragraph (1), is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id6829DDDDB4744D8A9EF1ADCDF637C141" style="OLC">
<subsection id="id14AF554B4BDF4144B7F08725B7375AF1"><enum>(g)</enum><header>Election to not
take credit</header><text>No credit shall be determined under subsection (a)
for the taxable year if the taxpayer elects not to have subsection (a) apply to
such taxable
year.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id25A5447DA4574D87B1DB3B42A4044FF3" indent="up1"><enum>(B)</enum><text>Subsection (m) of section 6501 is
amended by inserting <quote>45H(g),</quote> after
<quote>45C(d)(4),</quote>.</text>
</subparagraph></paragraph><paragraph id="id0E53D4E9690C43DAA8AFD3696ACD0F83"><enum>(3)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id2DF488596020453B9A9CF6561FC31D02"><enum>(A)</enum><text>Subsections (b)(1)(A),
(c)(2), (e)(1), and (e)(2) of section 45H (as amended by paragraph (1)) and
section 179B(a) are each amended by striking <quote>qualified capital
costs</quote> and inserting <quote>qualified costs</quote>.</text>
</subparagraph><subparagraph id="idD8DC8C28D93C41F4B1B39E1A1521BF8B" indent="up1"><enum>(B)</enum><text>The heading of paragraph (2) of
section 45H(c) is amended by striking <quote><header-in-text level="paragraph" style="OLC">capital</header-in-text></quote>.</text>
</subparagraph><subparagraph id="idE78898A366A447FF95DB85B483C37A32" indent="up1"><enum>(C)</enum><text>Subsection (a) of section 179B is
amended by inserting <quote>and which are properly chargeable to capital
account</quote> before the period at the end.</text>
</subparagraph></paragraph><paragraph id="id2FDBB46DC4A64C84A3D3FDB64DC56F4D"><enum>(4)</enum><text>The amendments
made by this subsection shall take effect as if included in section 339 of the
American Jobs Creation Act of 2004.</text>
</paragraph></subsection></section><section id="id4DC6099547E543A294661316FF733BDA"><enum>212.</enum><header>Motor fuel tax
enforcement advisory commission</header>
<subsection id="id0C56FFBEB4C14AD399A5FED894F8CA5E"><enum>(a)</enum><header>In
general</header><text>Section 11141 of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="idFF137520C43D4CCBB6ED9575D6258A1B" style="OLC">
<section id="id253A657A24C546B28F001177829B6DF9"><enum>11141.</enum><header>Motor fuel
tax enforcement advisory commission</header>
<subsection id="id878591B644A047069BA8AF1249F75A1E"><enum>(a)</enum><header>Establishment</header><text>There
is established a Motor Fuel Tax Enforcement Advisory Commission (in this
section referred to as the <quote>Commission</quote>).</text>
</subsection><subsection id="id09B720882D84462C862AEC52AA914FDC"><enum>(b)</enum><header>Membership</header>
<paragraph id="id26810A72761B4415B3F29CD09A32057C"><enum>(1)</enum><header>Appointment</header><text>The
Commission shall be composed of 14 members, of which—</text>
<subparagraph id="idFBD775BE9DDF40E5A20FA5665C845367"><enum>(A)</enum><text>1 shall be
appointed by the Administrator of the Federal Highway Administration as a
representative of the Federal Highway Administration,</text>
</subparagraph><subparagraph id="idC8B180B871494BF3B5F977806D4B4238"><enum>(B)</enum><text>1 shall be
appointed by the Inspector General for the Department of Transportation as a
representative the Office of Inspector General for the Department of
Transportation,</text>
</subparagraph><subparagraph id="id9B5E76799A6D4C1D886A589AF19C1093"><enum>(C)</enum><text>1 shall be
appointed by the Secretary of Transportation as a representative of the
Department of Transportation,</text>
</subparagraph><subparagraph id="id1ACE89615A3F4B73985739626CE6B783"><enum>(D)</enum><text>1 shall be
appointed by the Secretary of Homeland Security to be a representative of the
Department of Homeland Security,</text>
</subparagraph><subparagraph id="idEFA4A578B2A14438BB9ABB16C873B340"><enum>(E)</enum><text>1 shall be
appointed by the Secretary of Defense to be a representative of the Department
of Defense,</text>
</subparagraph><subparagraph id="idACD6809C17464435B30B2C3BEC17BE88"><enum>(F)</enum><text>1 shall be
appointed by the Attorney General to be a representative of the Department of
Justice,</text>
</subparagraph><subparagraph id="id52030AFE1055480497868012E33E1CCF"><enum>(G)</enum><text>2 shall be
appointed by the Chairman of the Committee on Finance of the Senate,</text>
</subparagraph><subparagraph id="id848FDABF23F1403B9437C4AC2F5D33F0"><enum>(H)</enum><text>2 shall be
appointed by the Ranking Member of the Committee on Finance of the
Senate,</text>
</subparagraph><subparagraph id="idB355CCF117F1477FB482C6CD3C0E8A14"><enum>(I)</enum><text>2 shall be
appointed by Chairman of the Committee on Ways and Means of the House of
Representatives, and</text>
</subparagraph><subparagraph id="id37C7698B9CAE4733A731340CDA543B44"><enum>(J)</enum><text>2 shall be
appointed by Ranking Member of the Committee on Ways and Means of the House of
Representatives.</text>
</subparagraph></paragraph><paragraph id="id9E1602B9D049436B84DA08D154B7E976"><enum>(2)</enum><header>Qualification
for certain members</header><text>Of the members appointed under subparagraphs
(G), (H), (I) and (J)—</text>
<subparagraph id="id05C074D92FBB4927BFD619593708BD50"><enum>(A)</enum><text>at least 1 shall
be representative from the Federation of State Tax Administrators,</text>
</subparagraph><subparagraph id="id848DF49F5CF5413BAB28850C3F816897"><enum>(B)</enum><text>at least 1shall
be a representative from any State department of transportation,</text>
</subparagraph><subparagraph id="idD32323F33EC0403C9E85482EEC77B63A"><enum>(C)</enum><text>at least 1 shall
be a representative from industries relating to fuel distribution, and</text>
</subparagraph><subparagraph id="idAE1770C69D224CA6AED7317C97EF8994"><enum>(D)</enum><text>at least 1 shall
be a representative from industries relating to fuel distribution (such a
refiners, distributors, pipeline operators, and terminal operators).</text>
</subparagraph></paragraph><paragraph id="id1B2EF5C209BD40EEA6E71558A004F2FD"><enum>(3)</enum><header>Terms</header><text>Members
shall be appointed for the life of the Commission.</text>
</paragraph><paragraph id="id8451D08E3E48401FBA074DF74F81CB5D"><enum>(4)</enum><header>Vacancies</header><text>A
vacancy in the Commission shall be filled in the manner in which the original
appointment was made.</text>
</paragraph><paragraph id="idACF9E158437C47C1B42FF5968F44595E"><enum>(5)</enum><header>Travel
expenses</header><text>Members of the Commission shall serve without pay but
shall receive travel expenses, including per diem in lieu of subsistence, in
accordance with sections 5702 and 5703 of title 5, United States Code.</text>
</paragraph><paragraph id="idFFBA678378F94463BD962FB2205B4FEE"><enum>(6)</enum><header>Chairman</header><text>The
Chairman of the Commission shall be elected by the members.</text>
</paragraph></subsection><subsection id="idC553B14569494FA988417E3D5333E1DB"><enum>(c)</enum><header>Duties</header>
<paragraph id="id4533C195EE4944E0BCF783694F782DC2"><enum>(1)</enum><header>In
general</header><text>The Commission shall—</text>
<subparagraph id="idA3553356B8BD42ED86D929C2202519B0"><enum>(A)</enum><text>review motor fuel
revenue collections, historical and current;</text>
</subparagraph><subparagraph id="id1718D397DBA547D0BAA8C24D27301006"><enum>(B)</enum><text>review the
progress of investigations;</text>
</subparagraph><subparagraph id="id6BD1157194D946F092C0A926BD582B3B"><enum>(C)</enum><text>develop and
review legislative proposals with respect to motor fuel taxes;</text>
</subparagraph><subparagraph id="idBC1C9625E9B846F49D3E162BD7FE4061"><enum>(D)</enum><text>monitor the
progress of administrative regulation projects relating to motor fuel
taxes;</text>
</subparagraph><subparagraph id="id5CF3F19A0E4C4591B02B3863CD16FFC6"><enum>(E)</enum><text>evaluate and make
recommendations to the President and Congress regarding—</text>
<clause id="id5A4647C2FE4249F8A6145B7F2FE09D08"><enum>(i)</enum><text>the effectiveness
of existing Federal enforcement programs regarding motor fuel taxes,</text>
</clause><clause id="idEF9654EA05714758A0FD7EF1619B24DA"><enum>(ii)</enum><text>enforcement
personnel allocation, and</text>
</clause><clause id="idAC9291ED8BD541F7A1EDF374DF60AB45"><enum>(iii)</enum><text>proposals for
regulatory projects, legislation, and funding.</text>
</clause></subparagraph></paragraph><paragraph id="id71849A2983254C00AB6B178D7B679816"><enum>(2)</enum><header>Report</header><text>Not
later than September 30, 2009, the Commission shall submit to Congress a final
report that contains a detailed statement on the findings and conclusions of
the Commission, together with recommendations for such legislation and
administrative action as the Commission considers appropriate or
necessary.</text>
</paragraph></subsection><subsection id="idE8E685059C8C4F818DE95A11B7106672"><enum>(d)</enum><header>Powers</header>
<paragraph commented="no" id="idD34A5D6480F94BD3B348A60F4FD72764"><enum>(1)</enum><header>Hearings</header><text>The
Commission may hold such hearings for the purpose of carrying out this Act, sit
and act at such times and places, take such testimony, and receive such
evidence as the Commission considers advisable to carry out this Act. The
Commission may administer oaths and affirmations to witnesses appearing before
the Commission.</text>
</paragraph><paragraph id="id83A2CE0E4AF046D5A633BC48C1E298FB"><enum>(2)</enum><header>Obtaining
Data</header><text>The Commission may secure directly from any department or
agency of the United States, information (other than information required by
any law to be kept confidential by such department or agency) necessary for the
Commission to carry out its duties under this section. Upon request of the
Commission, the head of that department or agency shall furnish such
nonconfidential information to the Commission. The Commission shall also gather
evidence through such means as it may determine appropriate, including through
holding hearings and soliciting comments by means of Federal Register
notices.</text>
</paragraph><paragraph id="idE403B0EFB3E44153B8B8570ACFA3253D"><enum>(3)</enum><header>Postal
services</header><text>The Commission may use the United States mails in the
same manner and under the same conditions as other departments and agencies of
the Federal Government.</text>
</paragraph><paragraph id="id77D57058E04B448FAD2F3DABF81A3F2A"><enum>(4)</enum><header>Gifts</header><text>The
Commission may accept, hold, administer, and utilize gifts, donations, and
requests of property, both real and personal, for the purposes of aiding or
facilitating the work of the Commission. Gifts and bequests of money, and the
proceeds from the sale of any other property received as gifts or bequests,
shall be deposited in the Treasury in a separate fund and shall be disbursed
upon order of the Commission. For purposes of Federal income, estate, and gift
taxation, property accepted under this section shall be considered as a gift or
bequest to or for the use of the United States.</text>
</paragraph></subsection><subsection id="id8967E24B804C40DE88FB7604A2B06D51"><enum>(e)</enum><header>Support
services</header>
<paragraph commented="no" id="id722EAB3346BD40F786889465C2A2BAFA"><enum>(1)</enum><header>Administrative
support services</header><text>Upon the request of the Commission, the
Secretary of Transportation shall provide to the Commission administrative
support services necessary to enable the Commission to carry out its duties
under this Act.</text>
</paragraph><paragraph id="idB40B0CAB777844E7B1A6D14F0FDF3749"><enum>(2)</enum><header>Detail of
government employees</header><text>Any Federal Government employee may be
detailed to the Commission without reimbursement, and such detail shall be
without interruption or loss of civil service status or privilege.</text>
</paragraph><paragraph id="id24956E2221924669A7277938A3BB2036"><enum>(3)</enum><header>Voluntary
services</header>
<subparagraph id="idEAA5F123CE0A4A60B7D99BD39189E09B"><enum>(A)</enum><header>In
general</header><text>Notwithstanding the provisions of section 1342 of title
31, United States Code, the Commission is authorized to accept and utilize the
services of volunteers serving without compensation. The Commission may
reimburse such volunteers for local travel and office supplies, and for other
travel expenses, including per diem in lieu of subsistence as authorized by
section 5703, United States Code.</text>
</subparagraph><subparagraph id="id21D1535F6D1340689C5AD5D246FE16C9"><enum>(B)</enum><header>Treatment of
volunteers</header><text>A person providing volunteer services to the
Commission shall be considered an employee of the Federal Government in the
performance of those services for the purposes of the following provisions of
law:</text>
<clause id="idF1D98008FF8C4E2CA17A5E36A56359DB"><enum>(i)</enum><text>chapter 81 of
title 5, United States Code, relating to compensation for work-related
injuries;</text>
</clause><clause id="id1C66C68D02234131B86B002BE5AEA6B7"><enum>(ii)</enum><text>chapter 171 of
title 28, United States Code, relating to tort claims; and</text>
</clause><clause id="idF4CE976957F34F82B0E49D5D17122D76"><enum>(iii)</enum><text>chapter 11 of
title 18, United States Code, relating to conflicts of interest.</text>
</clause></subparagraph></paragraph><paragraph id="idB60FE81A53BE40AB97B6416DB27C8F85"><enum>(4)</enum><header>Consultation</header><text>Upon
request of the Commission, representatives of the Department of the Treasury
and the Internal Revenue Service shall be available for consultation to assist
the Commission in carrying out its duties under this section.</text>
</paragraph><paragraph id="id79D682CEAA734A0E9C138B4D0C1FE5AB"><enum>(5)</enum><header>Cooperation</header><text>The
staff of the Department of Transportation, the Department of Homeland Security,
the Department of Justice, and the Department of Defense shall cooperate with
the Commission as necessary.</text>
</paragraph></subsection><subsection id="idA035A98AC3564C038C320237E9DDDD3B"><enum>(f)</enum><header>Inapplicability
of Federal Advisory Committee Act</header><text>The Federal Advisory Committee
Act (5 U.S.C. App.) shall not apply to the Commission.</text>
</subsection><subsection id="idE608F78B4D784EB0B80A4A8DEDD98895"><enum>(g)</enum><header>Termination</header>
<paragraph id="idA54A9C279A474971811FCA02B6135530"><enum>(1)</enum><header>In
general</header><text>The Commission shall terminate on the date that is 90
days after the date on which the Commission submits the report required under
subsection (c)(2).</text>
</paragraph><paragraph id="idADF8318F8A8F485B963B527722E0FC55"><enum>(2)</enum><header>Records</header><text>Not
later than the date on which the Commission terminates, the Commission shall
transmit all records of the Commission to the National
Archives.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id7E16A0CC2E6643C398201ED5CAC71014"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="id83FFEEED7DEA4986B47F51693AFC5396"><enum>213.</enum><header>Highway Trust
Fund conforming expenditure amendment</header>
<subsection id="idE5C7B9E921044F4DB407622A56176FFD"><enum>(a)</enum><header>In
general</header><text>Subsections (c)(1) and (e)(3) of section 9503 are each
amended by inserting <quote>, as amended by An Act to authorize additional
funds for emergency repairs and reconstruction of the Interstate I-35 bridge
located in Minneapolis, Minnesota, that collapsed on August 1, 2007, to waive
the $100,000,000 limitation on emergency relief funds for those emergency
repairs and reconstruction, and for other purposes,</quote> after
<quote>Users</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id5CE0ED0185594094BAF16022EF736B27"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect as if
included in the enactment of An Act to authorize additional funds for emergency
repairs and reconstruction of the Interstate I-35 bridge located in
Minneapolis, Minnesota, that collapsed on August 1, 2007, to waive the
$100,000,000 limitation on emergency relief funds for those emergency repairs
and reconstruction, and for other purposes.</text>
</subsection></section><enum>III</enum><header>Additional
infrastructure modifications and revenue provisions</header>
<section commented="no" display-inline="no-display-inline" id="id3944FEA92F2549A1863C8DEABDE6C606" section-type="subsequent-section"><enum>301.</enum><header>Restructuring of New
York Liberty Zone tax credits</header>
<subsection commented="no" id="id3F6C2C8C5FB44DBBA8B573EC8F20CA2A"><enum>(a)</enum><header>In
general</header><text>Part I of subchapter Y of chapter 1 is amended by
redesignating section 1400L as 1400K and by adding at the end the following new
section:</text>
<quoted-block id="id94DF4871A9E9416A962BB45D5EB0F756">
<section commented="no" id="id992AAD34C630401ABDD43CE4FA787AB2"><enum>1400L.</enum><header>New York
Liberty Zone tax credits</header>
<subsection commented="no" id="id56AC41E069434C258A0715E6E7FF3FF6"><enum>(a)</enum><header>In
general</header><text>In the case of a New York Liberty Zone governmental unit,
there shall be allowed as a credit against any taxes imposed for any payroll
period by section 3402 for which such governmental unit is liable under section
3403 an amount equal to so much of the portion of the qualifying project
expenditure amount allocated under subsection (b)(3) to such governmental unit
for the calendar year as is allocated by such governmental unit to such period
under subsection (b)(4).</text>
</subsection><subsection commented="no" id="idF7B496CBF6694EEC990436EB900B1E58"><enum>(b)</enum><header>Qualifying
project expenditure amount</header><text>For purposes of this section—</text>
<paragraph commented="no" id="id66F27B490B834516AA9997EB82D7F176"><enum>(1)</enum><header>In
general</header><text>The term <term>qualifying project expenditure
amount</term> means, with respect to any calendar year, the sum of—</text>
<subparagraph commented="no" id="id8F57328A3CCD4B02B36C69B41D5CC305"><enum>(A)</enum><text>the total
expenditures paid or incurred during such calendar year by all New York Liberty
Zone governmental units and the Port Authority of New York and New Jersey for
any portion of qualifying projects located wholly within the City of New York,
New York, and</text>
</subparagraph><subparagraph commented="no" id="id6D843833A27B4AC484D60413BA505E78"><enum>(B)</enum><text>any such
expenditures—</text>
<clause commented="no" id="idF2903DC477314DDE8C421968913AAC61"><enum>(i)</enum><text>paid or incurred
in any preceding calendar year which begins after the date of enactment of this
section, and</text>
</clause><clause commented="no" id="id73B5F10878D543F58E35E80BA4E15426"><enum>(ii)</enum><text>not previously
allocated under paragraph (3).</text>
</clause></subparagraph></paragraph><paragraph commented="no" id="id64CBE807132B4597ACBDC973C1B1EB21"><enum>(2)</enum><header>Qualifying
project</header><text>The term <term>qualifying project</term> means any
transportation infrastructure project, including highways, mass transit
systems, railroads, airports, ports, and waterways, in or connecting with the
New York Liberty Zone (as defined in section 1400K(h)), which is designated as
a qualifying project under this section jointly by the Governor of the State of
New York and the Mayor of the City of New York, New York.</text>
</paragraph><paragraph commented="no" id="idB1BE2E710A774835B5BAB9292578DFA6"><enum>(3)</enum><header>General
allocation</header>
<subparagraph commented="no" id="id87289D48124B4BC49C3078206731CC51"><enum>(A)</enum><header>In
general</header><text>The Governor of the State of New York and the Mayor of
the City of New York, New York, shall jointly allocate to each New York Liberty
Zone governmental unit the portion of the qualifying project expenditure amount
which may be taken into account by such governmental unit under subsection (a)
for any calendar year in the credit period.</text>
</subparagraph><subparagraph commented="no" id="id2AE20B8A8C554215A8795BED061F3806"><enum>(B)</enum><header>Aggregate
limit</header><text>The aggregate amount which may be allocated under
subparagraph (A) for all calendar years in the credit period shall not exceed
$2,000,000,000.</text>
</subparagraph><subparagraph commented="no" id="id15D53B7DBEEA421B83B3892473B3BE32"><enum>(C)</enum><header>Annual
limit</header>
<clause id="id1534E2E8752D4EA8A1C66755E093C745"><enum>(i)</enum><header>In
general</header><text>The aggregate amount which may be allocated under
subparagraph (A) for any calendar year in the credit period shall not exceed
the sum of—</text>
<subclause commented="no" id="id9F19B3F797954C0F98C4197130EE8205"><enum>(I)</enum><text>the applicable
limit, plus</text>
</subclause><subclause commented="no" id="id5A9199EA4020466481BAB4D72B4F14F4"><enum>(II)</enum><text>the aggregate
amount authorized to be allocated under this paragraph for all preceding
calendar years in the credit period which was not so allocated.</text>
</subclause></clause><clause id="id0EEDCCD4D0EB428BB075C3882145648B"><enum>(ii)</enum><header>Applicable
limit</header><text>For purposes of clause (i), the applicable limit for any
calendar year in the credit period is $169,000,000 and in the case of any
calendar year after 2019, zero.</text>
</clause></subparagraph><subparagraph commented="no" id="id7C846840E27446A596DF60AB2132BC87"><enum>(D)</enum><header>Unallocated
amounts at end of credit period</header><text display-inline="yes-display-inline">If, as of the close of the credit period,
the amount under subparagraph (B) exceeds the aggregate amount allocated under
subparagraph (A) for all calendar years in the credit period, the Governor of
the State of New York and the Mayor of the City of New York, New York, may
jointly allocate to New York Liberty Zone governmental units for any calendar
year in the 5-year period following the credit period an amount equal
to—</text>
<clause commented="no" id="id7D7CDAD4BF314450A706ACDDD0857E09"><enum>(i)</enum><text display-inline="yes-display-inline">the lesser of—</text>
<subclause commented="no" id="idDDA75682A5A747D5A8F171B893F2802F"><enum>(I)</enum><text display-inline="yes-display-inline">such excess, or</text>
</subclause><subclause commented="no" id="id94256BF165254C0BADBC00BF25E908D0"><enum>(II)</enum><text display-inline="yes-display-inline">the qualifying project expenditure amount
for such calendar year, reduced by</text>
</subclause></clause><clause commented="no" id="idC6B5185480544BD5B8C428048DCE082D"><enum>(ii)</enum><text display-inline="yes-display-inline">the aggregate amount allocated under this
subparagraph for all preceding calendar years.</text>
</clause></subparagraph></paragraph><paragraph commented="no" id="idCF24888B8CD94DE6B596066A476E8DD0"><enum>(4)</enum><header>Allocation to
payroll periods</header><text>Each New York Liberty Zone governmental unit
which has been allocated a portion of the qualifying project expenditure amount
under paragraph (3) for a calendar year may allocate such portion to payroll
periods beginning in such calendar year as such governmental unit determines
appropriate.</text>
</paragraph></subsection><subsection id="id0D8CA66C60FA4B3BB1B0D144F5564F70"><enum>(c)</enum><header>Carryover of
unused allocations</header>
<paragraph id="id2232778F28954193BA2D920467C8F657"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided in
paragraph (2), if the amount allocated under subsection (b)(3) to a New York
Liberty Zone governmental unit for any calendar year exceeds the aggregate
taxes imposed by section 3402 for which such governmental unit is liable under
section 3403 for periods beginning in such year, such excess shall be carried
to the succeeding calendar year and added to the allocation of such
governmental unit for such succeeding calendar year. No amount may be carried
under the preceding sentence to a calendar year after 2024.</text>
</paragraph><paragraph commented="no" id="id744F0D7857D44A33A3E7C7DEE5BAD723"><enum>(2)</enum><header>Reallocation</header><text>If
a New York Liberty Zone governmental unit does not use an amount allocated to
it under subsection (b)(3) within the time prescribed by the Governor of the
State of New York and the Mayor of the City of New York, New York, then such
amount shall after such time be treated for purposes of subsection (b)(3) in
the same manner as if it had never been allocated.</text>
</paragraph></subsection><subsection commented="no" id="id5E94DFC4469246DF821E9507812EB7E4"><enum>(d)</enum><header>Definitions and
special rules</header><text>For purposes of this section—</text>
<paragraph commented="no" id="idA14B1319FB504B449DAB0DDB2BCBAF62"><enum>(1)</enum><header>Credit
period</header><text>The term <term>credit period</term> means the 12-year
period beginning on January 1, 2008.</text>
</paragraph><paragraph commented="no" id="id676294293CC64E7AAFC113C969921966"><enum>(2)</enum><header>New York
Liberty Zone governmental unit</header><text>The term <term>New York Liberty
Zone governmental unit</term> means—</text>
<subparagraph commented="no" id="id7F0DC3C866394FBC977D808EA9EE91AD"><enum>(A)</enum><text>the State of New
York,</text>
</subparagraph><subparagraph commented="no" id="idCC811729BA294475BBACAD8AC740C664"><enum>(B)</enum><text>the City of New
York, New York, and</text>
</subparagraph><subparagraph commented="no" id="id147AA644C9264F9182D11FB568F65DF0"><enum>(C)</enum><text>any agency or
instrumentality of such State or City.</text>
</subparagraph></paragraph><paragraph commented="no" id="idDC6E5FA67CC4467596B2D3CFB21CF459"><enum>(3)</enum><header>Treatment of
funds</header><text>Any expenditure for a qualifying project taken into account
for purposes of the credit under this section shall be considered State and
local funds for the purpose of any Federal program.</text>
</paragraph><paragraph id="idCC0A8FDC291741E59EB21C5F14CE77EF"><enum>(4)</enum><header>Treatment of
credit amounts for purposes of withholding taxes</header><text display-inline="yes-display-inline">For purposes of this title, a New York
Liberty Zone governmental unit shall be treated as having paid to the
Secretary, on the day on which wages are paid to employees, an amount equal to
the amount of the credit allowed to such entity under subsection (a) with
respect to such wages, but only if such governmental unit deducts and withholds
wages for such payroll period under section 3401 (relating to wage
withholding).</text>
</paragraph></subsection><subsection id="id66F787B6056B409A9D3F56A1405BACB9"><enum>(e)</enum><header>Reporting</header><text display-inline="yes-display-inline">The Governor of the State of New York and
the Mayor of the City of New York, New York, shall jointly submit to the
Secretary an annual report—</text>
<paragraph id="idE5F72EE9CA554B54AEA23B825B4054A6"><enum>(1)</enum><text>which
certifies—</text>
<subparagraph id="idBCC4756E12C241A49392C821D10B9A93"><enum>(A)</enum><text display-inline="yes-display-inline">the qualifying project expenditure amount
for the calendar year, and</text>
</subparagraph><subparagraph id="idFE1ECC0C051F4AD7B2FFD2F973B9039A"><enum>(B)</enum><text display-inline="yes-display-inline">the amount allocated to each New York
Liberty Zone governmental unit under subsection (b)(3) for the calendar year,
and</text>
</subparagraph></paragraph><paragraph id="id8D81AB5506204375A039628771CB4689"><enum>(2)</enum><text>includes such
other information as the Secretary may require to carry out this
section.</text>
</paragraph></subsection><subsection commented="no" id="idDFF84A1B854B4FF7A0C395BD5E0BFC1C"><enum>(f)</enum><header>Guidance</header><text>The
Secretary may prescribe such guidance as may be necessary or appropriate to
ensure compliance with the purposes of this section.</text>
</subsection><subsection id="id25372923614C4FD4A21251AA69FA987E"><enum>(g)</enum><header>Termination</header><text>No
credit shall be allowed under subsection (a) for any calender year after
2024.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id9161AE5998AB4A51ACF8A831D970B97A"><enum>(b)</enum><header>Termination of
special allowance and expensing</header><text>Section 1400K(b)(2)(A)(v), as
redesignated by subsection (a), is amended by striking <quote>the termination
date</quote> and inserting <quote>the date of the enactment of the
<short-title>American Infrastructure Investment and
Improvement Act of 2007</short-title> or the termination date if pursuant to a
binding contract in effect on such enactment date</quote>.</text>
</subsection><subsection commented="no" id="idA168AE7CFC694CF4BDBA4C3BED53106D"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph commented="no" id="idB570186645E840C791F812559AC01DAF"><enum>(1)</enum><text>Section
38(c)(3)(B) is amended by striking <quote>section 1400L(a)</quote> and
inserting <quote>section 1400K(a)</quote>.</text>
</paragraph><paragraph commented="no" id="id33BC4C602AE047068CD353810033BC64"><enum>(2)</enum><text>Section
168(k)(2)(D)(ii) is amended by striking <quote>section 1400L(c)(2)</quote> and
inserting <quote>1400K(c)(2)</quote>.</text>
</paragraph><paragraph commented="no" id="idB9E161CB70F84ACAA886EEF2468AC11E"><enum>(3)</enum><text>The table of
sections for part I of subchapter Y of chapter 1 is amended by striking
<quote>1400L</quote> and inserting <quote>1400K</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idB7423514E36341A6964AD3F5A7DF2A23"><enum>(d)</enum><header>Effective
dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="idC7431EB576E0425789607C4F013F98E4"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section shall apply to periods beginning after December 31,
2007.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id10928992D87E4DCC9946397F21A229BD"><enum>(2)</enum><header>Termination of
special allowance and expensing</header><text>The amendment made by subsection
(b) shall take effect on the date of the enactment of this Act.</text>
</paragraph></subsection></section><section id="ID1A2DD41F698A48898371CABD48B31757"><enum>302.</enum><header>Participants
in government section <enum-in-header>457</enum-in-header> plans allowed to
treat elective deferrals as Roth contributions</header>
<subsection id="ID70457ED36BA04BFAB5D1E5C681F29595"><enum>(a)</enum><header>In
general</header><text>Section 402A(e)(1) (defining applicable retirement plan)
is amended by striking <quote>and</quote> at the end of subparagraph (A), by
striking the period at the end of subparagraph (B) and inserting <quote>,
and</quote>, and by adding at the end the following:</text>
<quoted-block id="ID5945F431379F4C199076F9F8AF499FEF" style="OLC">
<subparagraph id="ID5F4D4A30CD064BF9BBF5A82AF177223A"><enum>(C)</enum><text>an eligible
deferred compensation plan (as defined in section 457(b)) of an eligible
employer described in section
457(e)(1)(A).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID2AD854B310B34D328437D30B79080C92"><enum>(b)</enum><header>Elective
deferrals</header><text>Section 402A(e)(2) (defining elective deferral) is
amended to read as follows:</text>
<quoted-block id="ID12B79075925245D0994CCB7A1AFEF950" style="OLC">
<paragraph id="ID5EFC2AADCEB34C73915ED6BDD9421BC9"><enum>(2)</enum><header>Elective
deferral</header><text>The term <term>elective deferral</term> means—</text>
<subparagraph id="IDA67D51D203D24FDE9312951EC0AE5466"><enum>(A)</enum><text>any elective
deferral described in subparagraph (A) or (C) of section 402(g)(3), and</text>
</subparagraph><subparagraph id="IDE7BCFBC4336B4C9FA3DF7C908253EE7A"><enum>(B)</enum><text>any elective
deferral of compensation by an individual under an eligible deferred
compensation plan (as defined in section 457(b)) of an eligible employer
described in section
457(e)(1)(A).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID256AE764BD124156BBA68B480EB17C6B"><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 commented="no" display-inline="no-display-inline" id="id285576331B6A4C59BA50CDA801E5FA4B"><enum>303.</enum><header>Increased
information return penalties</header>
<subsection id="id5E07A1FB7021444B8F6413475F998737"><enum>(a)</enum><header>Failure to file
correct information returns</header>
<paragraph id="idE74A4AA0C5EF45FAA63641F9E7CBA1DA"><enum>(1)</enum><header>In
general</header><text>Section 6721(a)(1) (relating to imposition of penalty) is
amended—</text>
<subparagraph id="idEC97F8A9C5194883A6F4D37AC92E8F4F"><enum>(A)</enum><text>by striking
<quote>$50</quote> and inserting <quote>$250</quote>, and</text>
</subparagraph><subparagraph id="id4C16437BE8EE416EA654BA23ABC7455B"><enum>(B)</enum><text>by striking
<quote>$250,000</quote> and inserting <quote>$3,000,000</quote>.</text>
</subparagraph></paragraph><paragraph id="idE93A8D6FB77D44F5B4FE35A1B6BBA66C"><enum>(2)</enum><header>Reduction where
correction in specified period</header>
<subparagraph id="idC0415FC08ABD4F1FB2CFAB917147E51D"><enum>(A)</enum><header>Correction
within <enum-in-header>30</enum-in-header> days</header><text>Section
6721(b)(1) is amended—</text>
<clause id="id176E9144D79B4BDD926332317BE00324"><enum>(i)</enum><text>by
striking <quote>$15</quote> and inserting <quote>$50</quote>,</text>
</clause><clause id="id27C0D158C1F2431AB50B9D7E829DA763"><enum>(ii)</enum><text>by
striking <quote>in lieu of $50</quote> and inserting <quote>in lieu of
$250</quote>, and</text>
</clause><clause id="idE60529EEFDE0463F8ABFE30C1E9AC8CC"><enum>(iii)</enum><text>by striking
<quote>$75,000</quote> and inserting <quote>$500,000</quote>.</text>
</clause></subparagraph><subparagraph id="id0C7857E8BCA3406B91F72624A2C81A5D"><enum>(B)</enum><header>Failures
corrected on or before August
<enum-in-header>1</enum-in-header></header><text>Section 6721(b)(2) is
amended—</text>
<clause id="idC3E76F64D56A4D4FB3D6D605F9CF9CE8"><enum>(i)</enum><text>by
striking <quote>$30</quote> and inserting <quote>$100</quote>,</text>
</clause><clause id="idD2B2D6C28D3B4425846DD3D612029DB8"><enum>(ii)</enum><text>by
striking <quote>$50</quote> and inserting <quote>$250</quote>, and</text>
</clause><clause id="id7FB778504F484E079BCD67F5B8C45D98"><enum>(iii)</enum><text>by striking
<quote>$150,000</quote> and inserting <quote>$1,500,000</quote>.</text>
</clause></subparagraph></paragraph><paragraph id="id67BC95D1019F4346A2A594B2B3DB47C9"><enum>(3)</enum><header>Lower
limitation for persons with gross receipts of not more than
<enum-in-header>$5,000,000</enum-in-header></header><text>Section 6721(d)(1) is
amended—</text>
<subparagraph id="id9697FC077A374995AB3877ADECD5E10B"><enum>(A)</enum><text>in subparagraph
(A)—</text>
<clause id="idCE2F153550E3422D9F7646F024970F2E"><enum>(i)</enum><text>by
striking <quote>$100,000</quote> and inserting <quote>$1,000,000</quote>,
and</text>
</clause><clause id="idE605C5D67F364973A4F03FD0899C52E3"><enum>(ii)</enum><text>by
striking <quote>$250,000</quote> and inserting
<quote>$3,000,000</quote>,</text>
</clause></subparagraph><subparagraph id="id723717DFE29B44A1A00B621700185BD3"><enum>(B)</enum><text>in subparagraph
(B)—</text>
<clause id="id75D3D30C035A495AA17C7658D229BD77"><enum>(i)</enum><text>by
striking <quote>$25,000</quote> and inserting <quote>$175,000</quote>,
and</text>
</clause><clause id="idFAAAA40604794DEEBDF298559E2BC5B3"><enum>(ii)</enum><text>by
striking <quote>$75,000</quote> and inserting <quote>$500,000</quote>,
and</text>
</clause></subparagraph><subparagraph id="id031723B357A547E7BAB9B89C855D0DEC"><enum>(C)</enum><text>in subparagraph
(C)—</text>
<clause id="idEA1470A1694F423BBC772390B5E0A0F1"><enum>(i)</enum><text>by
striking <quote>$50,000</quote> and inserting <quote>$500,000</quote>,
and</text>
</clause><clause id="id1B159A29FF014CBDBCD0BF29FFD122B7"><enum>(ii)</enum><text>by
striking <quote>$150,000</quote> and inserting
<quote>$1,500,000</quote>.</text>
</clause></subparagraph></paragraph><paragraph id="idEB39111A017D4EC2B0ABF9144AEDCECD"><enum>(4)</enum><header>Penalty in case
of intentional disregard</header><text>Section 6721(e) is amended—</text>
<subparagraph id="id0C5846CB2B024EA6B7FB22C5D7108A88"><enum>(A)</enum><text>by striking
<quote>$100</quote> in paragraph (2) and inserting <quote>$500</quote>,</text>
</subparagraph><subparagraph id="idF334EBC947AC4C07A0347EF571B4DDA3"><enum>(B)</enum><text>by striking
<quote>$250,000</quote> in paragraph (3)(A) and inserting
<quote>$3,000,000</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="idED12A4744C7A4A2AAFD1865EC1F77ECE"><enum>(b)</enum><header>Failure to
furnish correct payee statements</header>
<paragraph id="id90534666DFF244629ECAA796740DCB7D"><enum>(1)</enum><header>In
general</header><text>Section 6722(a) is amended—</text>
<subparagraph id="idD6B64E5716BB4330B58C64E5B59DA39B"><enum>(A)</enum><text>by striking
<quote>$50</quote> and inserting <quote>$250</quote>, and</text>
</subparagraph><subparagraph id="id6BFE279F67B346858D8325DA9DE96637"><enum>(B)</enum><text>by striking
<quote>$100,000</quote> and inserting <quote>$1,000,000</quote>.</text>
</subparagraph></paragraph><paragraph id="idB227041DBD2644C68D7657A1BFD6CD91"><enum>(2)</enum><header>Penalty in case
of intentional disregard</header><text>Section 6722(c) is amended—</text>
<subparagraph id="idA2A4E0D8F8854D43AE9DCB448DD4CC81"><enum>(A)</enum><text>by striking
<quote>$100</quote> in paragraph (1) and inserting <quote>$500</quote>,
and</text>
</subparagraph><subparagraph id="id7543BEB7526E44F484198DBB2785EAB8"><enum>(B)</enum><text>by striking
<quote>$100,000</quote> in paragraph (2)(A) and inserting
<quote>$1,000,000</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="id9003A733376442CF94F028A44DAB687F"><enum>(c)</enum><header>Failure to
comply with other information reporting requirements</header><text>Section 6723
is amended—</text>
<paragraph id="id928E5C3AEFF1401997E168C64D92B61B"><enum>(1)</enum><text>by striking
<quote>$50</quote> and inserting <quote>$250</quote>, and</text>
</paragraph><paragraph id="idD62F91895E534002B6A240962B204E16"><enum>(2)</enum><text>by striking
<quote>$100,000</quote> and inserting <quote>$1,000,000</quote>.</text>
</paragraph></subsection><subsection id="idA2F2D14E1C4F423EBE81341819A41AF1"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply with respect
to information returns required to be filed on or after January 1, 2008.</text>
</subsection></section><section id="idCD0A93E32EC44BD3B2D4B74CD8A1921C"><enum>304.</enum><header>Exemption of
certain commercial cargo from harbor maintenance tax</header>
<subsection id="HE48A1B9E2B43483E8FB4876E3BF7D3E2"><enum>(a)</enum><header>In
general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/4462">Section 4462</external-xref> is amended—</text>
<paragraph id="idFD6B0DE8A51647ECB0B7557570E2E27A"><enum>(1)</enum><text>by redesignating
subsection (i) as subsection (j), and</text>
</paragraph><paragraph id="idF2752D7D3E914F26BE50E452C6E8114F"><enum>(2)</enum><text>by inserting
after subsection (h) the following new subsection:</text>
<quoted-block id="H21A00C9A952A463F8B5CFC7DE4B9A065" style="OLC">
<subsection id="H36D5AFB49332495C8500CEA979C61810"><enum>(i)</enum><header>Exemption for
certain cargo transported on the Great Lakes Saint Lawrence Seaway
System</header>
<paragraph id="HB28CAA0D34E24638BA00F994916C5D6"><enum>(1)</enum><header>In
general</header><text>No tax shall be imposed under section 4461(a) with
respect to—</text>
<subparagraph id="H4B57E2443A844DC3993100F04DBD7675"><enum>(A)</enum><text display-inline="yes-display-inline">commercial cargo (other than bulk cargo)
loaded at a port in the United States located in the Great Lakes Saint Lawrence
Seaway System and unloaded at another port in the United States located in such
system, and</text>
</subparagraph><subparagraph id="H9267ED70FFFC4168B5B4A300F3FBC984"><enum>(B)</enum><text display-inline="yes-display-inline">commercial cargo (other than bulk cargo)
unloaded at a port in the United States located in the Great Lakes Saint
Lawrence Seaway System which was loaded at a port in Canada located in such
system.</text>
</subparagraph></paragraph><paragraph id="H28E5138E2F184F92BBB5AEC44FC5192"><enum>(2)</enum><header>Bulk
cargo</header><text>For purposes of this subsection, the term <term>bulk
cargo</term> shall have the meaning given such term by section 53101(1) of
title 46, United States Code (as in effect on the date of the enactment of this
section).</text>
</paragraph><paragraph id="HEC0A422C9C594596A16EB471D81897F2"><enum>(3)</enum><header>Great Lakes
Saint Lawrence Seaway System</header><text display-inline="yes-display-inline">For purposes of this subsection, the term
<term>Great Lakes Saint Lawrence Seaway System</term> means the waterway
between Duluth, Minnesota and Sept. Iles, Quebec, encompassing the five Great
Lakes, their connecting channels, and the Saint Lawrence
River.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HB67D8CE34B6945B1B3AB71461092BF1"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section display-inline="no-display-inline" id="H97D07F2A0F2347A6B1BFD949DAD6EB40" section-type="subsequent-section"><enum>305.</enum><header>Credit to holders of
qualified rail infrastructure bonds</header>
<subsection id="H5C1615E88566447EA27E73E13D75B000"><enum>(a)</enum><header>In
General</header><text>Subpart H of part IV of subchapter A of chapter 1
(relating to credits against tax) is amended by adding at the end the following
new section:</text>
<quoted-block id="H358E27522A57467CBF70C0E0AE3EFD69" style="OLC">
<section id="HB72B68B8819249E9BB529B43FCBDBD05"><enum>54A.</enum><header>Credit to
holders of qualified rail infrastructure bonds</header>
<subsection id="H181B9B097E68499CB0CB91FFC2A318B8"><enum>(a)</enum><header>Allowance of
credit</header><text>If a taxpayer holds a qualified rail infrastructure bond
on 1 or more credit allowance dates of the bond occurring during any taxable
year, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of the credits
determined under subsection (b) with respect to such dates.</text>
</subsection><subsection id="HC116C34C73344C73A0F757A18FCBAB9C"><enum>(b)</enum><header>Amount of
credit</header>
<paragraph id="H32D8A6A1415448A99317DD0010429772"><enum>(1)</enum><header>In
general</header><text>The amount of the credit determined under this subsection
with respect to any credit allowance date for a qualified rail infrastructure
bond is 25 percent of the annual credit determined with respect to such
bond.</text>
</paragraph><paragraph id="HFD53F45856D94DF3BF763561CD444763"><enum>(2)</enum><header>Annual
credit</header><text>The annual credit determined with respect to any qualified
rail infrastructure bond is the product of—</text>
<subparagraph id="H7A65695912274610B51EDADDB71D6EA0"><enum>(A)</enum><text>the credit rate
determined by the Secretary under paragraph (3) for the day on which such bond
was sold, multiplied by</text>
</subparagraph><subparagraph id="H705A38E77C564E3BAEE0B570E5F0035"><enum>(B)</enum><text>the outstanding
face amount of the bond.</text>
</subparagraph></paragraph><paragraph id="H8CEB1F2E6DB04B84A86F013DB0907213"><enum>(3)</enum><header>Determination</header><text>For
purposes of paragraph (2), with respect to any qualified rail infrastructure
bond, the Secretary shall determine daily or cause to be determined daily a
credit rate which shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The credit rate for any
day is the credit rate which the Secretary or the Secretary’s designee
estimates will permit the issuance of qualified rail infrastructure bonds with
a specified maturity or redemption date, without discount and without interest
cost to the qualified issuer.</text>
</paragraph><paragraph id="H619F667F593E4EDDB7925F2CEAE3A638"><enum>(4)</enum><header>Credit allowance
date</header><text>For purposes of this section, the term <term>credit
allowance date</term> means—</text>
<subparagraph id="H1501E1F660CF4EEA87F33633B33876EF"><enum>(A)</enum><text>March 15,</text>
</subparagraph><subparagraph id="HC7DA5B10DDFC422E98AFD18FF1A049F2"><enum>(B)</enum><text>June 15,</text>
</subparagraph><subparagraph id="H558761D1955D45D581EF444F7C444DE7"><enum>(C)</enum><text>September 15,
and</text>
</subparagraph><subparagraph id="H85D9591DD4C44190A8FECC8828913BC4"><enum>(D)</enum><text>December
15.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Such term
also includes the last day on which the bond is outstanding.</continuation-text></paragraph><paragraph id="HD9224738F3B34E6594B00AEE049BB4"><enum>(5)</enum><header>Special rule for
issuance and redemption</header><text>In the case of a bond which is issued
during the 3-month period ending on a credit allowance date, the amount of the
credit determined under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise determined based on the
portion of the 3-month period during which the bond is outstanding. A similar
rule shall apply when the bond is redeemed or matures.</text>
</paragraph></subsection><subsection id="HFBC76788C17C4D83BF2F95C7256DCFB7"><enum>(c)</enum><header>Limitation based
on amount of tax</header><text>The credit allowed under subsection (a) for any
taxable year shall not exceed the excess of—</text>
<paragraph id="HEE34F3ABA1D14059907892EFE25B1192"><enum>(1)</enum><text>the sum of the
regular tax liability (as defined in section 26(b)) plus the tax imposed by
section 55, over</text>
</paragraph><paragraph id="H000A293AE19F4BFB9373E0AEDF7B8487"><enum>(2)</enum><text>the sum of the
credits allowable under this part (other than this subpart, subpart C, and
section 1400N(l)).</text>
</paragraph></subsection><subsection id="H49A5C2B9F676461588E5398008F4851C"><enum>(d)</enum><header>Qualified rail
infrastructure bond</header><text>For purposes of this section—</text>
<paragraph id="H1E98F5BCE2894442B2765C8D943C00CB"><enum>(1)</enum><header>In
general</header><text>The term <term>qualified rail infrastructure bond</term>
means any bond issued as part of an issue if—</text>
<subparagraph id="HC7D38D39743746F4AC004E29E22467D8"><enum>(A)</enum><text>the bond is issued
by a qualified issuer pursuant to an allocation by the Secretary to such issuer
of a portion of the national qualified rail infrastructure bond annual
limitation under subsection (f)(2) by not later than the end of the calendar
year following the year of such allocation,</text>
</subparagraph><subparagraph id="HE83963E5254F46A49B11A40E533A55C"><enum>(B)</enum><text>95 percent or more
of the proceeds of such issue are to be used for capital expenditures incurred
for 1 or more qualified projects,</text>
</subparagraph><subparagraph id="H683D15C2AEAD4C119E892782DC2BB974"><enum>(C)</enum><text>the qualified
issuer designates such bond for purposes of this section and the bond is in
registered form, and</text>
</subparagraph><subparagraph id="H54B1B880A1394135A0C9128C26DAED9B"><enum>(D)</enum><text>the issue meets
the requirements of subsection (h).</text>
</subparagraph></paragraph><paragraph id="H9DB6D5EB847B41C2B6FEC7699CDA0034"><enum>(2)</enum><header>Qualified
project; special use rules</header>
<subparagraph id="HA4DE8315464E4129BB85A66D3C9C5846"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified project</term> means a project
eligible under subsection (b) of section 26101 of title 49, United States Code,
which the Secretary determines was selected using the criteria of subsection
(c) of such section 26101 by the Secretary of Transportation, that makes a
substantial contribution to improving a rail transportation corridor for
intercity passenger rail use.</text>
</subparagraph><subparagraph id="id19D49B58D412438EBB1170A2EDB101D1"><enum>(B)</enum><header>Certification
required regarding certain projects</header><text>The Secretary shall not
consider a project to be a qualified project unless an applicant certifies to
the Secretary that—</text>
<clause id="id7F312E72D6BB4225B853C61607DC6F22"><enum>(i)</enum><text>if a project
involves a rail transportation corridor which includes the use of rights-of-way
owned by a freight railroad, the applicant has entered into a written agreement
with such freight railroad regarding the use of the rights-of-way and has
received assurances that collective bargaining agreements between such freight
railroad and its employees (including terms regarding the contracting of work
performed on such corridor) shall remain in full force and effect during the
term of such written agreement,</text>
</clause><clause id="IDf3e1fb73bd604ab0a27786fb65b7134c"><enum>(ii)</enum><text>any person which
provides railroad transportation over infrastructure improved or acquired
pursuant to this section, is a rail carrier as defined by section 10102 of
title 49, United States Code, and</text>
</clause><clause id="id83AC3C51ABD54793A235E03AA5FFE680"><enum>(iii)</enum><text>the applicant
shall, with respect to improvements to rail infrastructure made pursuant to
this section, comply with the standards applicable to construction work in such
title 49, in the same manner in which the National Railroad Passenger
Corporation is required to comply with such standards.</text>
</clause></subparagraph><subparagraph id="H9B26043D4F5744C79B14154F02CB2116"><enum>(C)</enum><header>Refinancing
rules</header><text>For purposes of paragraph (1)(B), a qualified project may
be refinanced with proceeds of a qualified rail infrastructure bond only if the
indebtedness being refinanced (including any obligation directly or indirectly
refinanced by such indebtedness) was originally incurred after the date of the
enactment of this section.</text>
</subparagraph><subparagraph id="H88C941BBDA5F4D8B977DD1EA4BE81E65"><enum>(D)</enum><header>Reimbursement</header><text>For
purposes of paragraph (1)(B), a qualified rail infrastructure bond may be
issued to reimburse for amounts paid after the date of the enactment of this
section with respect to a qualified project, but only if—</text>
<clause id="H110ED0A716584BD1ACC7978119FFB7EA"><enum>(i)</enum><text>prior to the
payment of the original expenditure, the issuer declared its intent to
reimburse such expenditure with the proceeds of a qualified rail infrastructure
bond,</text>
</clause><clause id="H20D8B8179BA34BA58C449D154FA75B38"><enum>(ii)</enum><text>not later than 60
days after payment of the original expenditure, the qualified issuer adopts an
official intent to reimburse the original expenditure with such proceeds,
and</text>
</clause><clause id="H9E0856F993DC47B29848E7E8FCFBE400"><enum>(iii)</enum><text>the
reimbursement is made not later than 18 months after the date the original
expenditure is paid.</text>
</clause></subparagraph><subparagraph id="HCD967617A57847F09FC4A55EC5134234"><enum>(E)</enum><header>Treatment of
changes in use</header><text>For purposes of paragraph (1)(B), the proceeds of
an issue shall not be treated as used for a qualified project to the extent
that a qualified issuer takes any action within its control which causes such
proceeds not to be used for a qualified project. The Secretary shall prescribe
regulations specifying remedial actions that may be taken (including conditions
to taking such remedial actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a qualified rail
infrastructure bond.</text>
</subparagraph></paragraph></subsection><subsection id="H9F24788A13874695BC31CB9922FD6DBE"><enum>(e)</enum><header>Maturity
limitations</header>
<paragraph id="HCFA193051BA941BDB62C2020A8EB3902"><enum>(1)</enum><header>Duration of
term</header><text>A bond shall not be treated as a qualified rail
infrastructure bond if the maturity of such bond exceeds the maximum term
determined by the Secretary under paragraph (2) with respect to such
bond.</text>
</paragraph><paragraph id="H49F330CAF5F04146A3061337259C91D7"><enum>(2)</enum><header>Maximum
term</header><text>During each calendar month, the Secretary shall determine
the maximum term permitted under this paragraph for bonds issued during the
following calendar month. Such maximum term shall be the term which the
Secretary estimates will result in the present value of the obligation to repay
the principal on the bond being equal to 50 percent of the face amount of such
bond. Such present value shall be determined without regard to the requirements
of paragraph (3) and using as a discount rate the average annual interest rate
of tax-exempt obligations having a term of 10 years or more which are issued
during the month. If the term as so determined is not a multiple of a whole
year, such term shall be rounded to the next highest whole year.</text>
</paragraph><paragraph id="H4C04AECE3E234B9500F373CBB9D3703"><enum>(3)</enum><header>Ratable principal
amortization required</header><text>A bond shall not be treated as a qualified
rail infrastructure bond unless it is part of an issue which provides for an
equal amount of principal to be paid by the qualified issuer during each
calendar year that the issue is outstanding.</text>
</paragraph></subsection><subsection id="HF8DB1889042E44F599224DCDC788B8E8"><enum>(f)</enum><header>Annual
limitation on amount of bonds designated</header>
<paragraph id="H5DF0212A2A214729BB2497F5EADFB626"><enum>(1)</enum><header>National annual
limitation</header><text>There is a national qualified rail infrastructure bond
annual limitation for each calendar year. Such limitation is $900,000,000 for
2008, 2009, and 2010, and, except as provided in paragraph (3), zero
thereafter.</text>
</paragraph><paragraph id="HD96CFB9CF7984E3CA094BCA9F590011"><enum>(2)</enum><header>Allocation by
secretary</header><text display-inline="yes-display-inline">The national
qualified rail infrastructure bond annual limitation for a calendar year shall
be allocated by the Secretary among qualified projects in such manner as the
Secretary determines appropriate.</text>
</paragraph><paragraph id="id2EDAC968DC574F37A6B1D9F855DAFDB6"><enum>(3)</enum><header>Carryover of
unused limitation</header><text display-inline="yes-display-inline">If for any
calendar year, the national qualified rail infrastructure bond annual
limitation for such year exceeds the amount of bonds allocated during such
year, such limitation for the following calendar year shall be increased by the
amount of such excess. Any carryforward of a limitation may be carried only to
the first 2 years following the unused limitation year. For purposes of the
preceding sentence, a limitation shall be treated as used on a first-in
first-out basis.</text>
</paragraph></subsection><subsection id="HF52A7F395F3742209E9498ABE68DDE33"><enum>(g)</enum><header>Credit treated
as interest</header><text>For purposes of this title, the credit determined
under subsection (a) shall be treated as interest which is includible in gross
income.</text>
</subsection><subsection id="HEECA4A20E42C47F48914C400C3BF18CC"><enum>(h)</enum><header>Special rules
relating to expenditures</header>
<paragraph id="H3FAD3E0EB6434424827474C6584C4F56"><enum>(1)</enum><header>In
general</header><text>An issue shall be treated as meeting the requirements of
this subsection if, as of the date of issuance, the qualified issuer reasonably
expects—</text>
<subparagraph id="HA86647FBF50F4265A2110933A470B3F5"><enum>(A)</enum><text>at least 95
percent of the proceeds of the issue are to be spent for 1 or more qualified
projects within the 5-year period beginning on the date of issuance of the
qualified rail infrastructure bond,</text>
</subparagraph><subparagraph id="H8CAA974086BE4E1A97818CFBA3C62DDC"><enum>(B)</enum><text>a binding
commitment with a third party to spend at least 10 percent of the proceeds of
the issue will be incurred within the 6-month period beginning on the date of
issuance of the qualified rail infrastructure bond, and</text>
</subparagraph><subparagraph id="H93F0D9D294294892BACCB9DB00FF7F84"><enum>(C)</enum><text>such projects will
be completed with due diligence and the proceeds from the sale of the issue
will be spent with due diligence.</text>
</subparagraph></paragraph><paragraph id="H0A8CC42B96B54276B422BFDC4F13B3D"><enum>(2)</enum><header>Extension of
period</header><text>Upon submission of a request prior to the expiration of
the period described in paragraph (1)(A), the Secretary may extend such period
if the qualified issuer establishes that the failure to satisfy the 5-year
requirement is due to reasonable cause and the related projects will continue
to proceed with due diligence.</text>
</paragraph><paragraph id="H3E25F95C57354B3483E0E736D5A003E0"><enum>(3)</enum><header>Failure to spend
required amount of bond proceeds within 5 years</header><text>To the extent
that less than 95 percent of the proceeds of such issue are expended by the
close of the 5-year period beginning on the date of issuance (or if an
extension has been obtained under paragraph (2), by the close of the extended
period), the qualified issuer shall redeem all of the nonqualified bonds within
90 days after the end of such period. For purposes of this paragraph, the
amount of the nonqualified bonds required to be redeemed shall be determined in
the same manner as under section 142.</text>
</paragraph></subsection><subsection id="H919D23ED54774762B32700C40799665D"><enum>(i)</enum><header>Special rules
relating to arbitrage</header><text>A bond which is part of an issue shall not
be treated as a qualified rail infrastructure bond unless, with respect to the
issue of which the bond is a part, the qualified issuer satisfies the arbitrage
requirements of section 148 with respect to proceeds of the issue.</text>
</subsection><subsection id="H9706CC64CE8044FF8700A4392572CE39"><enum>(j)</enum><header>Special rules
relating to pool bonds</header><text>No portion of a pooled financing bond may
be allocable to loan unless the borrower has entered into a written loan
commitment for such portion prior to the issue date of such issue.</text>
</subsection><subsection id="H1D3F9ACDD7FC4BEAA5377BFAE65426B5"><enum>(k)</enum><header>Other
definitions and special rules</header><text>For purposes of this
section—</text>
<paragraph id="H56FACBEA708D42C2914300A5DF40822C"><enum>(1)</enum><header>Bond</header><text>The
term <term>bond</term> includes any obligation.</text>
</paragraph><paragraph id="HCBE6E66F0B444BB180C66641EB5B502"><enum>(2)</enum><header>Pooled financing
bond</header><text>The term <term>pooled financing bond</term> shall have the
meaning given such term by section 149(f)(4)(A).</text>
</paragraph><paragraph id="ID66966e688569425a99f0c2171d1283e6"><enum>(3)</enum><header>Qualified
issuer</header><text>The term <term>qualified issuer</term> means 1 or more
States or an interstate compact of States.</text>
</paragraph><paragraph id="id06E48E8066F948CC86F129DA343B1E5F"><enum>(4)</enum><header>State</header><text>The
term <term>State</term> includes the District of Columbia and any possession of
the United States.</text>
</paragraph><paragraph id="H106888407E4A4CB2A9E4431B73891200"><enum>(5)</enum><header>S corporations
and partnerships</header><text>In the case of a qualified rail infrastructure
bond held by an S corporation or partnership, the allocation of the credit
allowed by this section to the shareholders of the corporation or partners of
such partnership shall be treated as a distribution.</text>
</paragraph><paragraph id="H271777D3D0534B44B020FF4393587CF5"><enum>(6)</enum><header>Bonds held by
regulated investment companies</header><text>If any qualified rail
infrastructure bond is held by a regulated investment company, the credit
determined under subsection (a) shall be allowed to shareholders of such
company under procedures prescribed by the Secretary.</text>
</paragraph><paragraph id="H2268A28FA7B748B99D1436F4EBC907D1"><enum>(7)</enum><header>Reporting</header><text>Issuers
of qualified rail infrastructure bonds shall submit reports similar to the
reports required under section 149(e).</text>
</paragraph><paragraph id="id8DB76E2C96914AF98931F3A27AD8C372"><enum>(8)</enum><header>Termination</header><text>This
section shall not apply with respect to any bond issued after December 31,
2012.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H3C4625C669884421A5E262C0177793E1"><enum>(b)</enum><header>Reporting</header><text>Subsection
(d) of section 6049 (relating to returns regarding payments of interest) is
amended by adding at the end the following new paragraph:</text>
<quoted-block id="HA0019D53839C49E9BF4C19A557A7C3D5" style="OLC">
<paragraph id="H86EB60D7D26D486BA7920761D2C4FC9"><enum>(9)</enum><header>Reporting of
credit on qualified rail infrastructure bonds</header>
<subparagraph id="HBA93E0D326204755B0C23470000700B5"><enum>(A)</enum><header>In
general</header><text>For purposes of subsection (a), the term
<term>interest</term> includes amounts includible in gross income under section
54A(g) and such amounts shall be treated as paid on the credit allowance date
(as defined in section 54A(b)(4)).</text>
</subparagraph><subparagraph id="H3186134012F34125B9594201EC2FEC3D"><enum>(B)</enum><header>Reporting to
corporations, etc</header><text>Except as otherwise provided in regulations, in
the case of any interest described in subparagraph (A), subsection (b)(4) shall
be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i)
of such subsection.</text>
</subparagraph><subparagraph id="H2FF67A38209D477090DFEF3F532990C6"><enum>(C)</enum><header>Regulatory
authority</header><text>The Secretary may prescribe such regulations as are
necessary or appropriate to carry out the purposes of this paragraph, including
regulations which require more frequent or more detailed
reporting.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HE52745A1C951425CB690B0315127E6DC"><enum>(c)</enum><header>Conforming
Amendments</header>
<paragraph id="H8197A7556087474B8BA3C03860AA9255"><enum>(1)</enum><text>The table of
sections for subpart H of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:</text>
<quoted-block id="HC0D76B6FB2FC43D0B21C6F196333477B" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 54A. Credit to holders of qualified
rail infrastructure
bonds.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H4039F304897441EA8E5F27F38AC66D1"><enum>(2)</enum><text>Section 54(c)(2) is
amended by inserting <quote>, section 54A,</quote> after <quote>subpart
C</quote>.</text>
</paragraph></subsection><subsection id="HA6976483070A42C68CB64025B99B9984"><enum>(d)</enum><header>Issuance of
Regulations</header><text>The Secretary of Treasury shall issue regulations
required under section 54A of the Internal Revenue Code of 1986 (as added by
this section) not later than 120 days after the date of the enactment of this
Act.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HBC5CF2530AFF43BAA0E7626C5B0670FC"><enum>(e)</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="IDBA81120B8A1E44F489B04FA9BC7B3D28"><enum>306.</enum><header>Repeal of
suspension of certain penalties and interest</header>
<subsection id="IDFA47AB7BA8864406A5379E1BD010828E"><enum>(a)</enum><header>In
General</header><text>Section 6404 is amended by striking subsection
(g).</text>
</subsection><subsection id="ID997E94D64EA84C06B72618908CA5B6E1"><enum>(b)</enum><header>Effective
Date</header>
<paragraph id="ID5F1A814C909E49639C5405386D25E93E"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section shall apply to notices provided by the Secretary of the
Treasury, or his delegate after the date which is 6 months after the date of
the enactment of the Small Business and Work Opportunity Tax Act of
2007.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3A972964B1C844C69D976F584869C9F8"><enum>(2)</enum><header>Exception for
certain taxpayers</header><text>The amendments made by this section shall not
apply to any taxpayer with respect to whom a suspension of any interest,
penalty, addition to tax, or other amount is in effect on the date which is 6
months after the date of the enactment of the Small Business and Work
Opportunity Tax Act of 2007.</text>
</paragraph></subsection></section><section id="IDD6398D2EF7884F629041A9CDAB776F9C"><enum>307.</enum><header>Denial of
deduction for certain fines, penalties, and other amounts</header>
<subsection id="IDBA84BB2B1CE447609C99A5CA5F2EBC37"><enum>(a)</enum><header>In
General</header><text>Subsection (f) of section 162 (relating to trade or
business expenses) is amended to read as follows:</text>
<quoted-block id="IDACCAEF6DB3814ABE8D26707DB2D6C216" style="OLC">
<subsection id="ID87EEA05571BE4518B42658BDBE6BB11F"><enum>(f)</enum><header>Fines,
Penalties, and Other Amounts</header>
<paragraph id="ID291EF5E657CD4B95B8B9D1DED85DC87D"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), no deduction
otherwise allowable shall be allowed under this chapter for any amount paid or
incurred (whether by suit, agreement, or otherwise) to, or at the direction of,
a government or entity described in paragraph (4) in relation to—</text>
<subparagraph id="IDB9F01B5617F147BDA7F78F8CDB6A803B"><enum>(A)</enum><text>the violation of
any law, or</text>
</subparagraph><subparagraph id="ID6AF84398AD174BA898703DCD461BDC1D"><enum>(B)</enum><text>an investigation
or inquiry into the potential violation of any law which is initiated by such
government or entity.</text>
</subparagraph></paragraph><paragraph id="IDEFA225C8407947AF964545B30039063A"><enum>(2)</enum><header>Exception for
amounts constituting restitution or paid to come into compliance with
law</header><text>Paragraph (1) shall not apply to any amount which—</text>
<subparagraph id="ID2E3063560DC248E8AE300260F2BA1456"><enum>(A)</enum><text>the taxpayer
establishes—</text>
<clause id="ID5759BFB58EF841819B414A0A4ED58BA9"><enum>(i)</enum><text>constitutes
restitution (or remediation of property) for damage or harm caused by, or which
may be caused by, the violation of any law or the potential violation of any
law, or</text>
</clause><clause id="IDD57607AF06E84D9982611FE3F41365FC"><enum>(ii)</enum><text>is paid to come
into compliance with any law which was violated or involved in the
investigation or inquiry, and</text>
</clause></subparagraph><subparagraph id="ID9CCE9340363D4659B75DA6FDEC24CD5D"><enum>(B)</enum><text>is identified as
an amount described in clause (i) or (ii) of subparagraph (A), as the case may
be, in the court order or settlement agreement, except that the requirement of
this subparagraph shall not apply in the case of any settlement agreement which
requires the taxpayer to pay or incur an amount not greater than
$1,000,000.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">A taxpayer
shall not meet the requirements of subparagraph (A) solely by reason an
identification under subparagraph (B). This paragraph shall not apply to any
amount paid or incurred as reimbursement to the government or entity for the
costs of any investigation or litigation unless such amount is paid or incurred
for a cost or fee regularly charged for any routine audit or other customary
review performed by the government or entity.</continuation-text></paragraph><paragraph id="ID2C49A35FF8A2489A8A05109EE6E4F328"><enum>(3)</enum><header>Exception for
amounts paid or incurred as the result of certain court
orders</header><text>Paragraph (1) shall not apply to any amount paid or
incurred by order of a court in a suit in which no government or entity
described in paragraph (4) is a party.</text>
</paragraph><paragraph id="ID2D5BEEF99F2C4EBEBE370B203960B10C"><enum>(4)</enum><header>Certain
nongovernmental regulatory entities</header><text>An entity is described in
this paragraph if it is—</text>
<subparagraph id="ID563133CA9B4F4982ADC42D846CD8F387"><enum>(A)</enum><text>a nongovernmental
entity which exercises self-regulatory powers (including imposing sanctions) in
connection with a qualified board or exchange (as defined in section
1256(g)(7)), or</text>
</subparagraph><subparagraph id="IDCEB32B508BD04F53B8DDCCF096959D68"><enum>(B)</enum><text>to the extent
provided in regulations, a nongovernmental entity which exercises
self-regulatory powers (including imposing sanctions) as part of performing an
essential governmental function.</text>
</subparagraph></paragraph><paragraph id="ID281692D388894D08A9FF55B4711737D7"><enum>(5)</enum><header>Exception for
taxes due</header><text>Paragraph (1) shall not apply to any amount paid or
incurred as taxes
due.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID0821D779E6AE438AAE3A4776501EDCFF"><enum>(b)</enum><header>Reporting of
Deductible Amounts</header>
<paragraph id="IDA5AA61F553744C318029953E21523A54"><enum>(1)</enum><header>In
general</header><text>Subpart B of part III of subchapter A of chapter 61 is
amended by inserting after section 6050V the following new section:</text>
<quoted-block id="ID008BDB999C084A6BBCE7A1963B66D949" style="OLC">
<section id="IDF58CE2CDBCE0426986287C8B2DF88AEA"><enum>6050W.</enum><header>Information
with respect to certain fines, penalties, and other amounts</header>
<subsection id="ID69F16896A6764638A6ECD346D411A8A2"><enum>(a)</enum><header>Requirement of
Reporting</header>
<paragraph id="IDA1D76EFCBE3F44D0B30244F4E25095DC"><enum>(1)</enum><header>In
general</header><text>The appropriate official of any government or entity
which is described in section 162(f)(4) which is involved in a suit or
agreement described in paragraph (2) shall make a return in such form as
determined by the Secretary setting forth—</text>
<subparagraph id="ID22D329EFC3194ABE885807A8F83E75C1"><enum>(A)</enum><text>the amount
required to be paid as a result of the suit or agreement to which paragraph (1)
of section 162(f) applies,</text>
</subparagraph><subparagraph id="ID36DBA75143E84423896E2D595811A9F5"><enum>(B)</enum><text>any amount
required to be paid as a result of the suit or agreement which constitutes
restitution or remediation of property, and</text>
</subparagraph><subparagraph id="IDDE9EC9344F2940EDB00B1ADB0C8F6922"><enum>(C)</enum><text>any amount
required to be paid as a result of the suit or agreement for the purpose of
coming into compliance with any law which was violated or involved in the
investigation or inquiry.</text>
</subparagraph></paragraph><paragraph id="ID71E0F28EEE594AD48E854806CD72E339"><enum>(2)</enum><header>Suit or
agreement described</header>
<subparagraph id="ID994DED55B9384666A089AA97B5205C02"><enum>(A)</enum><header>In
general</header><text>A suit or agreement is described in this paragraph
if—</text>
<clause id="ID52313432E93C4406853FD7F8B715BF49"><enum>(i)</enum><text>it is—</text>
<subclause id="ID6E50DB81F30342B298C67FCE7BAB237E"><enum>(I)</enum><text>a suit with
respect to a violation of any law over which the government or entity has
authority and with respect to which there has been a court order, or</text>
</subclause><subclause id="ID3BCB4DCF0CD8475EA5AE9DFF77CECE75"><enum>(II)</enum><text>an agreement
which is entered into with respect to a violation of any law over which the
government or entity has authority, or with respect to an investigation or
inquiry by the government or entity into the potential violation of any law
over which such government or entity has authority, and</text>
</subclause></clause><clause id="IDAC8610FF0A054CFE824B45DEF562821D"><enum>(ii)</enum><text>the aggregate
amount involved in all court orders and agreements with respect to the
violation, investigation, or inquiry is $600 or more.</text>
</clause></subparagraph><subparagraph id="ID31928B5C829340B3A3062FD1141D082B"><enum>(B)</enum><header>Adjustment of
reporting threshold</header><text>The Secretary may adjust the $600 amount in
subparagraph (A)(ii) as necessary in order to ensure the efficient
administration of the internal revenue laws.</text>
</subparagraph></paragraph><paragraph id="IDDC84252CB2AA4A469C9685D4F4B9696A"><enum>(3)</enum><header>Time of
filing</header><text>The return required under this subsection shall be filed
not later than—</text>
<subparagraph id="IDE83530254D384DDC8E902E41CA51E049"><enum>(A)</enum><text>30 days after the
date on which a court order is issued with respect to the suit or the date the
agreement is entered into, as the case may be, or</text>
</subparagraph><subparagraph id="IDE3D3805443034176B4B4DEB8FB374EA5"><enum>(B)</enum><text>the date
specified by the Secretary.</text>
</subparagraph></paragraph></subsection><subsection id="ID4532108BA0E74CA0A1E3E30737F14130"><enum>(b)</enum><header>Statements To
Be Furnished to Individuals Involved in the Settlement</header><text>Every
person required to make a return under subsection (a) shall furnish to each
person who is a party to the suit or agreement a written statement
showing—</text>
<paragraph id="ID97EA735895BC48DE91B2996ADCF1AE85"><enum>(1)</enum><text>the name of the
government or entity, and</text>
</paragraph><paragraph id="IDC784D2BE04684AD99A39F34B1163B22E"><enum>(2)</enum><text>the information
supplied to the Secretary under subsection (a)(1).</text>
</paragraph><continuation-text continuation-text-level="subsection">The
written statement required under the preceding sentence shall be furnished to
the person at the same time the government or entity provides the Secretary
with the information required under subsection (a).</continuation-text></subsection><subsection id="ID18E16CA4ECCA4A2A8BECA146C986D008"><enum>(c)</enum><header>Appropriate
Official Defined</header><text>For purposes of this section, the term
<term>appropriate official</term> means the officer or employee having control
of the suit, investigation, or inquiry or the person appropriately designated
for purposes of this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="IDE4B4868BB52748DD868D1A6F6F8C1C17"><enum>(2)</enum><header>Conforming
amendment</header><text>The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by inserting after the item relating to
section 6050V the following new item:</text>
<quoted-block id="ID4AB6EC83C218423BB485011CB379A75B" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 6050W. Information with respect to
certain fines, penalties, and other
amounts.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID7137FB66EC34405798D3EDCD1AB8ED97"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to amounts
paid or incurred on or after the date of the enactment of this Act, except that
such amendments shall not apply to amounts paid or incurred under any binding
order or agreement entered into before such date. Such exception shall not
apply to an order or agreement requiring court approval unless the approval was
obtained before such date.</text>
</subsection></section><section display-inline="no-display-inline" id="H29918194EAD1476B8CB36474E2A097F5" section-type="subsequent-section"><enum>308.</enum><header>Revision of tax
rules on expatriation</header>
<subsection id="HB4E5A22560484277ACB4D500708DA0B7"><enum>(a)</enum><header>In
general</header><text>Subpart A of part II of subchapter N of chapter 1 is
amended by inserting after section 877 the following new section:</text>
<quoted-block id="H2C5F703B9663485B940301AF9373ECAE" style="OLC">
<section id="H7A516E6A54734382BEDD3751BAF62CC9"><enum>877A.</enum><header>Tax
responsibilities of expatriation</header>
<subsection id="H17F74A3FCF144A219D005C8203BC5EBC"><enum>(a)</enum><header>General
rules</header><text>For purposes of this subtitle—</text>
<paragraph id="H1EEA2DF5854F4BA8AD3002228BF81C19"><enum>(1)</enum><header>Mark to
market</header><text>All property of a covered expatriate shall be treated as
sold on the day before the expatriation date for its fair market value.</text>
</paragraph><paragraph id="H906D9452B38D4622AB5C8300E3C3CE6"><enum>(2)</enum><header>Recognition of
gain or loss</header><text>In the case of any sale under paragraph (1)—</text>
<subparagraph id="H5A801A9B51A24413B1A5D1D0D547AC44"><enum>(A)</enum><text>notwithstanding
any other provision of this title, any gain arising from such sale shall be
taken into account for the taxable year of the sale, and</text>
</subparagraph><subparagraph id="HDDE126D418A642EB94434C465D97DCD4"><enum>(B)</enum><text>any loss arising
from such sale shall be taken into account for the taxable year of the sale to
the extent otherwise provided by this title, except that section 1091 shall not
apply to any such loss.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Proper
adjustment shall be made in the amount of any gain or loss subsequently
realized for gain or loss taken into account under the preceding sentence,
determined without regard to paragraph (3).</continuation-text></paragraph><paragraph id="HA80E04FD320A47AB931B7382A18CF428"><enum>(3)</enum><header>Exclusion for
certain gain</header>
<subparagraph id="HACDCDF03C3F24CA9001F9221814803E1"><enum>(A)</enum><header>In
general</header><text>The amount which would (but for this paragraph) be
includible in the gross income of any individual by reason of paragraph (1)
shall be reduced (but not below zero) by $600,000.</text>
</subparagraph><subparagraph id="HB8F23D92A5C642E8A6D87B00CD531EA4"><enum>(B)</enum><header>Adjustment for
inflation</header>
<clause id="H3B77BB9A60C84D168EEDD689C12FBE8"><enum>(i)</enum><header>In
general</header><text>In the case of any taxable year beginning in a calendar
year after 2008, the dollar amount in subparagraph (A) shall be increased by an
amount equal to—</text>
<subclause id="H98739BC091344240B578E008C5CC31"><enum>(I)</enum><text>such dollar amount,
multiplied by</text>
</subclause><subclause id="HCDC981826B744743AAC58F492419023D"><enum>(II)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, by substituting <quote>calendar year
2007</quote> for <quote>calendar year 1992</quote> in subparagraph (B)
thereof.</text>
</subclause></clause><clause id="H97AC1B14429046BB8C4F97546834578F"><enum>(ii)</enum><header>Rounding</header><text>If
any amount as adjusted under clause (i) is not a multiple of $1,000, such
amount shall be rounded to the nearest multiple of $1,000.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HB3024967EBE44B2F9BEA19B8A3E8EEAD"><enum>(b)</enum><header>Election To
defer tax</header>
<paragraph id="H2216F5DDFB3A4FEBBBA5588D58B521C0"><enum>(1)</enum><header>In
general</header><text>If the taxpayer elects the application of this subsection
with respect to any property treated as sold by reason of subsection (a), the
time for payment of the additional tax attributable to such property shall be
extended until the due date of the return for the taxable year in which such
property is disposed of (or, in the case of property disposed of in a
transaction in which gain is not recognized in whole or in part, until such
other date as the Secretary may prescribe).</text>
</paragraph><paragraph id="H0D841DC58CF948AFA0132FF2876E67BE"><enum>(2)</enum><header>Determination of
tax with respect to property</header><text>For purposes of paragraph (1), the
additional tax attributable to any property is an amount which bears the same
ratio to the additional tax imposed by this chapter for the taxable year solely
by reason of subsection (a) as the gain taken into account under subsection (a)
with respect to such property bears to the total gain taken into account under
subsection (a) with respect to all property to which subsection (a)
applies.</text>
</paragraph><paragraph id="H14BF45EE09804C869B0025BAAF565761"><enum>(3)</enum><header>Termination of
extension</header><text>The due date for payment of tax may not be extended
under this subsection later than the due date for the return of tax imposed by
this chapter for the taxable year which includes the date of death of the
expatriate (or, if earlier, the time that the security provided with respect to
the property fails to meet the requirements of paragraph (4), unless the
taxpayer corrects such failure within the time specified by the
Secretary).</text>
</paragraph><paragraph id="HE6764C99037B4CD0BB11B421177F00F6"><enum>(4)</enum><header>Security</header>
<subparagraph id="H8537B9CA74734BF982193E3C9B57DA3C"><enum>(A)</enum><header>In
general</header><text>No election may be made under paragraph (1) with respect
to any property unless adequate security is provided with respect to such
property.</text>
</subparagraph><subparagraph id="HB778581573D6408CAC89A2FB3DCB70CA"><enum>(B)</enum><header>Adequate
security</header><text>For purposes of subparagraph (A), security with respect
to any property shall be treated as adequate security if—</text>
<clause id="H55007FBE162945C1A4688722C8F795A2"><enum>(i)</enum><text>it
is a bond which is furnished to, and accepted by, the Secretary, which is
conditioned on the payment of tax (and interest thereon), and which meets the
requirements of section 6325, or</text>
</clause><clause id="H5931623E2D684313BAA5C9F300ADEF12"><enum>(ii)</enum><text>it is another
form of security for such payment (including letters of credit) that meets such
requirements as the Secretary may prescribe.</text>
</clause></subparagraph></paragraph><paragraph id="H3064642F748741DE938B5FDA58683320"><enum>(5)</enum><header>Waiver of
certain rights</header><text>No election may be made under paragraph (1) unless
the taxpayer makes an irrevocable waiver of any right under any treaty of the
United States which would preclude assessment or collection of any tax imposed
by reason of this section.</text>
</paragraph><paragraph id="HFF5C0BF9B08C4A609E9255C4E6EEC1E"><enum>(6)</enum><header>Elections</header><text>An
election under paragraph (1) shall only apply to property described in the
election and, once made, is irrevocable.</text>
</paragraph><paragraph id="H73664E338190451089063E165DABCB66"><enum>(7)</enum><header>Interest</header><text>For
purposes of section 6601, the last date for the payment of tax shall be
determined without regard to the election under this subsection.</text>
</paragraph></subsection><subsection id="HCA7EA78A4806410192124DE8FB99767B"><enum>(c)</enum><header>Exception for
certain property</header><text>Subsection (a) shall not apply to—</text>
<paragraph id="H14E5625514C844D2BC84604BDD7001B"><enum>(1)</enum><text>any deferred
compensation item (as defined in subsection (d)(4)),</text>
</paragraph><paragraph id="HBEBE943C09F142218C287898568C737B"><enum>(2)</enum><text>any specified tax
deferred account (as defined in subsection (e)(2)), and</text>
</paragraph><paragraph id="H346A309BE3244FF09C6EB8ED002C89F1"><enum>(3)</enum><text>any interest in a
nongrantor trust (as defined in subsection (f)(3)).</text>
</paragraph></subsection><subsection id="HF63F0F3E577843DA8781A439771BFFEE"><enum>(d)</enum><header>Treatment of
deferred compensation items</header>
<paragraph id="HEFA04CFC42324426B0C3605EA53D7190"><enum>(1)</enum><header>Withholding on
eligible deferred compensation items</header>
<subparagraph id="H177EB9F325A04CC7845BD28B1812AB89"><enum>(A)</enum><header>In
general</header><text>In the case of any eligible deferred compensation item,
the payor shall deduct and withhold from any taxable payment to a covered
expatriate with respect to such item a tax equal to 30 percent thereof.</text>
</subparagraph><subparagraph id="HAD9601E285A64C15A52923A02580F041"><enum>(B)</enum><header>Taxable
payment</header><text display-inline="yes-display-inline">For purposes of
subparagraph (A), the term <term>taxable payment</term> means with respect to a
covered expatriate any payment to the extent it would be includible in the
gross income of the covered expatriate if such expatriate continued to be
subject to tax as a citizen or resident of the United States. A deferred
compensation item shall be taken into account as a payment under the preceding
sentence when such item would be so includible.</text>
</subparagraph></paragraph><paragraph id="H254CBD93DE834988AACA917CF64C792"><enum>(2)</enum><header>Other deferred
compensation items</header><text>In the case of any deferred compensation item
which is not an eligible deferred compensation item—</text>
<subparagraph display-inline="no-display-inline" id="H12523A109573470097FC73FD373CF77E"><enum>(A)</enum><clause commented="no" display-inline="yes-display-inline" id="H144245458696431EBB37DBEDBB02115"><enum>(i)</enum><text display-inline="yes-display-inline">with respect to any deferred compensation
item to which clause (ii) does not apply, an amount equal to the present value
of the covered expatriate’s accrued benefit shall be treated as having been
received by such individual on the day before the expatriation date as a
distribution under the plan, and</text>
</clause><clause commented="no" id="H782EDD8004684B8FBA1696D443DE3292" indent="up1"><enum>(ii)</enum><text display-inline="yes-display-inline">with respect to any deferred compensation
item referred to in paragraph (4)(D), the rights of the covered expatriate to
such item shall be treated as becoming transferable and not subject to a
substantial risk of forfeiture on the day before the expatriation date,</text>
</clause></subparagraph><subparagraph display-inline="no-display-inline" id="H3DD66A031E0E4A0BB8EE792218EEAF39"><enum>(B)</enum><text>no early
distribution tax shall apply by reason of such treatment, and</text>
</subparagraph><subparagraph id="HBCCB09E267F346E1866200FC00CBFFBA"><enum>(C)</enum><text display-inline="yes-display-inline">appropriate adjustments shall be made to
subsequent distributions from the plan to reflect such treatment.</text>
</subparagraph></paragraph><paragraph id="HC0E670D11A864D16B829C976A740439C"><enum>(3)</enum><header>Eligible
deferred compensation items</header><text>For purposes of this subsection, the
term <term>eligible deferred compensation item</term> means any deferred
compensation item with respect to which—</text>
<subparagraph id="H87CE02ACCD694B4F9C7C6763E02807F1"><enum>(A)</enum><text display-inline="yes-display-inline">the payor of such item is—</text>
<clause id="H8E30DBD0FE854C88A0D793D99F986E7"><enum>(i)</enum><text>a
United States person, or</text>
</clause><clause id="H6012B83A1C064DE88116B621F340890"><enum>(ii)</enum><text>a
person who is not a United States person but who elects to be treated as a
United States person for purposes of paragraph (1) and meets such requirements
as the Secretary may provide to ensure that the payor will meet the
requirements of paragraph (1), and</text>
</clause></subparagraph><subparagraph id="HBBEA3B9CA87A405DB99CABDCD0122E3B"><enum>(B)</enum><text>the covered
expatriate—</text>
<clause id="H12FD4E4921DA4CEE8B38C93B45CA1058"><enum>(i)</enum><text>notifies the payor
of his status as a covered expatriate, and</text>
</clause><clause id="HC9AD5BA2F3354BFDBA70DD38485303CC"><enum>(ii)</enum><text>makes an
irrevocable waiver of any right to claim any reduction under any treaty with
the United States in withholding on such item.</text>
</clause></subparagraph></paragraph><paragraph id="H58CCB0AC83AA4AA5A09F99F872DB5965"><enum>(4)</enum><header>Deferred
compensation item</header><text>For purposes of this subsection, the term
<term>deferred compensation item</term> means—</text>
<subparagraph id="H31FEAE3D1EA145949EF200B5C1FE7E63"><enum>(A)</enum><text>any interest in a
plan or arrangement described in section 219(g)(5),</text>
</subparagraph><subparagraph id="H1A15D735F4304F0D9500001D3DC7C840"><enum>(B)</enum><text>any interest in a
foreign pension plan or similar retirement arrangement or program,</text>
</subparagraph><subparagraph id="H99A2786B4CFA4CDCA2A57DEC7E0049D6"><enum>(C)</enum><text>any item of
deferred compensation, and</text>
</subparagraph><subparagraph id="HB24CD16774C54314A42F08003900955E"><enum>(D)</enum><text>any property, or
right to property, which the individual is entitled to receive in connection
with the performance of services to the extent not previously taken into
account under section 83 or in accordance with section 83.</text>
</subparagraph></paragraph><paragraph id="HAF9FA2BC67874427B5193F05B745DCAA"><enum>(5)</enum><header>Exception</header><text>Paragraphs
(1) and (2) shall not apply to any deferred compensation item which is
attributable to services performed outside the United States while the covered
expatriate was not a citizen or resident of the United States.</text>
</paragraph><paragraph id="H44444A1BA9BF4CAE9D1B51A6D229EDA"><enum>(6)</enum><header>Special
rules</header>
<subparagraph id="H0353494E8590464E9B321F958F3C6D30"><enum>(A)</enum><header>Application of
withholding rules</header><text>Rules similar to the rules of subchapter B of
chapter 3 shall apply for purposes of this subsection.</text>
</subparagraph><subparagraph id="HDFD059B5D16B40679578A6CAD9890058"><enum>(B)</enum><header>Application of
tax</header><text>Any item subject to the withholding tax imposed under
paragraph (1) shall be subject to tax under section 871.</text>
</subparagraph><subparagraph id="HEEFFF6FD9E5645D0A227935D50001D1F"><enum>(C)</enum><header>Coordination
with other withholding requirements</header><text>Any item subject to
withholding under paragraph (1) shall not be subject to withholding under
section 1441 or chapter 24.</text>
</subparagraph></paragraph></subsection><subsection id="H59FC0852F8B0423FA9DED622A12EFB4F"><enum>(e)</enum><header>Treatment of
specified tax deferred accounts</header>
<paragraph id="HFDC2F698052F4D5783EA41954E463894"><enum>(1)</enum><header>Account treated
as distributed</header><text display-inline="yes-display-inline">In the case of
any interest in a specified tax deferred account held by a covered expatriate
on the day before the expatriation date—</text>
<subparagraph id="HF8B2397385F54231A39802D8D136D627"><enum>(A)</enum><text>the covered
expatriate shall be treated as receiving a distribution of his entire interest
in such account on the day before the expatriation date,</text>
</subparagraph><subparagraph id="HD1A85DE1F05A4A61BC7B479CA3EC5669"><enum>(B)</enum><text>no early
distribution tax shall apply by reason of such treatment, and</text>
</subparagraph><subparagraph id="H21245B2D37C34CCFBE78C2106FEA1FA"><enum>(C)</enum><text display-inline="yes-display-inline">appropriate adjustments shall be made to
subsequent distributions from the account to reflect such treatment.</text>
</subparagraph></paragraph><paragraph id="H1F380DD07E564E1CA854A46D3C017D09"><enum>(2)</enum><header>Specified tax
deferred account</header><text>For purposes of paragraph (1), the term
<term>specified tax deferred account</term> means an individual retirement plan
(as defined in section 7701(a)(37)) other than any arrangement described in
subsection (k) or (p) of section 408, a qualified tuition program (as defined
in section 529), a Coverdell education savings account (as defined in section
530), a health savings account (as defined in section 223), and an Archer MSA
(as defined in section 220).</text>
</paragraph></subsection><subsection id="H5374F1321F0544BEBFDEB0AF171C3D5"><enum>(f)</enum><header>Special rules for
nongrantor trusts</header>
<paragraph id="HC111ADEB81D34987A0E2D595CE939E1B"><enum>(1)</enum><header>In
general</header><text>In the case of a distribution (directly or indirectly) of
any property from a nongrantor trust to a covered expatriate—</text>
<subparagraph id="HDBD8318E6E054B7E87E759C7EFF83D00"><enum>(A)</enum><text>the trustee shall
deduct and withhold from such distribution an amount equal to 30 percent of the
taxable portion of the distribution, and</text>
</subparagraph><subparagraph id="H603BF33FDE47410C000121B2165EE51"><enum>(B)</enum><text>if the fair market
value of such property exceeds its adjusted basis in the hands of the trust,
gain shall be recognized to the trust as if such property were sold to the
expatriate at its fair market value.</text>
</subparagraph></paragraph><paragraph id="HEACC567E04E54561BB61E446A266D736"><enum>(2)</enum><header>Taxable
portion</header><text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>taxable portion</term> means, with respect to any
distribution, that portion of the distribution which would be includible in the
gross income of the covered expatriate if such expatriate continued to be
subject to tax as a citizen or resident of the United States.</text>
</paragraph><paragraph id="HBF50073AF42943A5AA00BC00B207AB20"><enum>(3)</enum><header>Nongrantor
trust</header><text>For purposes of this subsection, the term <term>nongrantor
trust</term> means the portion of any trust that the individual is not
considered the owner of under subpart E of part I of subchapter J. The
determination under the preceding sentence shall be made immediately before the
expatriation date.</text>
</paragraph><paragraph id="HFA1BF20B307642DCB87DE7C7BEE71F34"><enum>(4)</enum><header>Special rules
relating to withholding</header><text display-inline="yes-display-inline">For
purposes of this subsection—</text>
<subparagraph id="H52D09274EA5040C3AC9D7F6B6383A44"><enum>(A)</enum><text>rules similar to
the rules of subsection (d)(6) shall apply, and</text>
</subparagraph><subparagraph id="H4C8DB91162194192AC663BE0FF78B66"><enum>(B)</enum><text>the covered
expatriate shall be treated as having waived any right to claim any reduction
under any treaty with the United States in withholding on any distribution to
which paragraph (1)(A) applies.</text>
</subparagraph></paragraph></subsection><subsection id="HC5AE3CF6F6404FA29CA90037B69FD186"><enum>(g)</enum><header>Definitions and
special rules relating to expatriation</header><text>For purposes of this
section—</text>
<paragraph id="H70469A4146F747FEA974076664C2D966"><enum>(1)</enum><header>Covered
expatriate</header>
<subparagraph id="H4ED9019C648549E7B40500E7A3003BCF"><enum>(A)</enum><header>In
general</header><text>The term <term>covered expatriate</term> means an
expatriate who meets the requirements of subparagraph (A), (B), or (C) of
section 877(a)(2).</text>
</subparagraph><subparagraph id="HE6660D170C184AA689172E87D0B6D5FE"><enum>(B)</enum><header>Exceptions</header><text display-inline="yes-display-inline">An individual shall not be treated as
meeting the requirements of subparagraph (A) or (B) of section 877(a)(2)
if—</text>
<clause id="H11EEDAB2AC3041A3B9F5334F8E641DA9"><enum>(i)</enum><text>the
individual—</text>
<subclause id="H58EC3FF0C7B74896899FEDA3493297EE"><enum>(I)</enum><text>became at birth a
citizen of the United States and a citizen of another country and, as of the
expatriation date, continues to be a citizen of, and is taxed as a resident of,
such other country, and</text>
</subclause><subclause id="HC0374FF2AEC74D93AA012C00139CD18F"><enum>(II)</enum><text>has been a
resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not
more than 10 taxable years during the 15-taxable year period ending with the
taxable year during which the expatriation date occurs, or</text>
</subclause></clause><clause id="HAB77880CD08646B8A5480021B0F23BF4"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H013B05C95A9140C9A89D56238B58BF4F"><enum>(I)</enum><text>the individual’s
relinquishment of United States citizenship occurs before such individual
attains age 18<fraction>½</fraction>, and</text>
</subclause><subclause id="H70584078A5F54951B6F01DBA36AFFE90" indent="up1"><enum>(II)</enum><text>the individual has been a resident of
the United States (as so defined) for not more than 10 taxable years before the
date of relinquishment.</text>
</subclause></clause></subparagraph><subparagraph id="HBEA81E19105440D7A0AE36CC83D4E966"><enum>(C)</enum><header>Covered
expatriates also subject to tax as citizens or residents</header><text display-inline="yes-display-inline">In the case of any covered expatriate who
is subject to tax as a citizen or resident of the United States for any period
beginning after the expatriation date, such individual shall not be treated as
a covered expatriate during such period for purposes of subsections (d)(1) and
(f) and section 2801.</text>
</subparagraph></paragraph><paragraph id="HF852DBD4CEA34EFA9984C5EF506CA00"><enum>(2)</enum><header>Expatriate</header><text>The
term <term>expatriate</term> means—</text>
<subparagraph id="HC310658F5BF847E8BCAB229BA49356D1"><enum>(A)</enum><text>any United States
citizen who relinquishes his citizenship, and</text>
</subparagraph><subparagraph id="HEAF1B48F7D534585A508B3B04CEBFB49"><enum>(B)</enum><text>any long-term
resident of the United States who ceases to be a lawful permanent resident of
the United States (within the meaning of section 7701(b)(6)).</text>
</subparagraph></paragraph><paragraph id="HFE7795EAB64049C49D212B8F784F2FE2"><enum>(3)</enum><header>Expatriation
date</header><text>The term <term>expatriation date</term> means—</text>
<subparagraph id="H3793C3EF8AA44F2EB9F98363673B49EE"><enum>(A)</enum><text>the date an
individual relinquishes United States citizenship, or</text>
</subparagraph><subparagraph id="H13A15B7A7F0F4277BF2E025869C8694C"><enum>(B)</enum><text>in the case of a
long-term resident of the United States, the date on which the individual
ceases to be a lawful permanent resident of the United States (within the
meaning of section 7701(b)(6)).</text>
</subparagraph></paragraph><paragraph id="HF04FBF2D267547CCABB762B2C21D6BF6"><enum>(4)</enum><header>Relinquishment
of citizenship</header><text>A citizen shall be treated as relinquishing his
United States citizenship on the earliest of—</text>
<subparagraph id="H14172414D739486F8B93ADDE66027952"><enum>(A)</enum><text>the date the
individual renounces his United States nationality before a diplomatic or
consular officer of the United States pursuant to paragraph (5) of section
349(a) of the <act-name parsable-cite="INA">Immigration and Nationality
Act</act-name> (8 U.S.C. 1481(a)(5)),</text>
</subparagraph><subparagraph id="H5E9200A66034493AB7963E2CB5CCABA8"><enum>(B)</enum><text>the date the
individual furnishes to the United States Department of State a signed
statement of voluntary relinquishment of United States nationality confirming
the performance of an act of expatriation specified in paragraph (1), (2), (3),
or (4) of section 349(a) of the <act-name parsable-cite="INA">Immigration and
Nationality Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/8/1481">8 U.S.C. 1481(a)(1)</external-xref>–(4)),</text>
</subparagraph><subparagraph id="H3DBF01BBDA6F458886E9C1DF6B8C2E21"><enum>(C)</enum><text>the date the
United States Department of State issues to the individual a certificate of
loss of nationality, or</text>
</subparagraph><subparagraph id="HF265DA23EC2C47858584564B785CB469"><enum>(D)</enum><text>the date a court
of the United States cancels a naturalized citizen’s certificate of
naturalization.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Subparagraph (A) or (B) shall not
apply to any individual unless the renunciation or voluntary relinquishment is
subsequently approved by the issuance to the individual of a certificate of
loss of nationality by the United States Department of State.</continuation-text></paragraph><paragraph id="H28B5E2424B7E4625A9E3CA897873C327"><enum>(5)</enum><header>Long-term
resident</header><text>The term <term>long-term resident</term> has the meaning
given to such term by section 877(e)(2).</text>
</paragraph><paragraph id="H01E214A8A93441EF81A639B0D112E0AE"><enum>(6)</enum><header>Early
distribution tax</header><text>The term <term>early distribution tax</term>
means any increase in tax imposed under section 72(t), 220(e)(4), 223(f)(4),
409A(a)(1)(B), 529(c)(6), or 530(d)(4).</text>
</paragraph></subsection><subsection id="HC9E4ACEF08D54CB78B972734C6789BD1"><enum>(h)</enum><header>Other
rules</header>
<paragraph id="HF7FF73509E6D4452BA80CCE2DACEEEAA"><enum>(1)</enum><header>Termination of
deferrals, etc</header><text>In the case of any covered expatriate,
notwithstanding any other provision of this title—</text>
<subparagraph id="HEB691073EE474EC884443CAAE78097AE"><enum>(A)</enum><text display-inline="yes-display-inline">any time period for acquiring property
which would result in the reduction in the amount of gain recognized with
respect to property disposed of by the taxpayer shall terminate on the day
before the expatriation date, and</text>
</subparagraph><subparagraph id="H8E9B7E1F77C5497F9D9D23002C5E73A8"><enum>(B)</enum><text>any extension of
time for payment of tax shall cease to apply on the day before the expatriation
date and the unpaid portion of such tax shall be due and payable at the time
and in the manner prescribed by the Secretary.</text>
</subparagraph></paragraph><paragraph id="H44538394BC1A45D9B797D458DEA4B4FA"><enum>(2)</enum><header>Step-up in
basis</header><text>Solely for purposes of determining any tax imposed by
reason of subsection (a), property which was held by an individual on the date
the individual first became a resident of the United States (within the meaning
of section 7701(b)) shall be treated as having a basis on such date of not less
than the fair market value of such property on such date. The preceding
sentence shall not apply if the individual elects not to have such sentence
apply. Such an election, once made, shall be irrevocable.</text>
</paragraph><paragraph id="H64A32BECC6BD45B89C2478ED5199046D"><enum>(3)</enum><header>Coordination
with section 684</header><text>If the expatriation of any individual would
result in the recognition of gain under section 684, this section shall be
applied after the application of section 684.</text>
</paragraph></subsection><subsection id="HCBE462D72AB7432AAF004B20930554DA"><enum>(i)</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="HA5436A2BE4E6416A9380D3AAB95209BE"><enum>(b)</enum><header>Tax on gifts and
bequests received by United States citizens and residents from
expatriates</header>
<paragraph id="H15F6FE2923164758AB4648E1FA1DB105"><enum>(1)</enum><header>In
general</header><text>Subtitle B (relating to estate and gift taxes) is amended
by inserting after chapter 14 the following new chapter:</text>
<quoted-block id="H47809FC5DF6041B3B4700748E65C6690" style="OLC">
<chapter id="H00A58BEA2F1444D9A34144E426A9EB38"><enum>15</enum><header>GIFTS AND
BEQUESTS FROM EXPATRIATES</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 2801. Imposition of
tax.</toc-entry>
</toc>
<section id="HD87C2DCA9D5A428D00E5123F7B00D794"><enum>2801.</enum><header>Imposition of
tax</header>
<subsection id="H4D877083DFD14B60802630E81BEC2FCA"><enum>(a)</enum><header>In
General</header><text>If, during any calendar year, any United States citizen
or resident receives any covered gift or bequest, there is hereby imposed a tax
equal to the product of—</text>
<paragraph id="HE6DF98D546264FE7A9D964D37CA3A4C5"><enum>(1)</enum><text>the highest rate
of tax specified in the table contained in section 2001(c) as in effect on the
date of such receipt (or, if greater, the highest rate of tax specified in the
table applicable under section 2502(a) as in effect on the date), and</text>
</paragraph><paragraph id="H516BA03B9924410A9BE1AAB6A583C5FC"><enum>(2)</enum><text>the value of such
covered gift or bequest.</text>
</paragraph></subsection><subsection id="H3B533D91AD1C40989FBC68364B439197"><enum>(b)</enum><header>Tax To be paid
by recipient</header><text>The tax imposed by subsection (a) on any covered
gift or bequest shall be paid by the person receiving such gift or
bequest.</text>
</subsection><subsection id="HE098639EA93F4E7CBC5290BFA238B000"><enum>(c)</enum><header>Exception for
certain gifts</header><text>Subsection (a) shall apply only to the extent that
the value of covered gifts and bequests received by any person during the
calendar year exceeds $10,000.</text>
</subsection><subsection id="H237238A82ED94E6395D9FCA75D00D9E5"><enum>(d)</enum><header>Tax reduced by
foreign gift or estate tax</header><text>The tax imposed by subsection (a) on
any covered gift or bequest shall be reduced by the amount of any gift or
estate tax paid to a foreign country with respect to such covered gift or
bequest.</text>
</subsection><subsection id="HEEADD1EF49BC459382DF2973152FF39D"><enum>(e)</enum><header>Covered gift or
bequest</header>
<paragraph id="H17C86BA1FEEC4531A8AACE9C3054DB1"><enum>(1)</enum><header>In
general</header><text>For purposes of this chapter, the term <term>covered gift
or bequest</term> means—</text>
<subparagraph id="HCDC997849CCA417EA6C0C3754939CC3E"><enum>(A)</enum><text>any property
acquired by gift directly or indirectly from an individual who, at the time of
such acquisition, is a covered expatriate, and</text>
</subparagraph><subparagraph id="H523D77D69318469CAF76EDA76C7FECB"><enum>(B)</enum><text>any property
acquired directly or indirectly by reason of the death of an individual who,
immediately before such death, was a covered expatriate.</text>
</subparagraph></paragraph><paragraph id="H636D8B147F1B486AA2A600435666BD74"><enum>(2)</enum><header>Exceptions for
transfers otherwise subject to estate or gift tax</header><text>Such term shall
not include—</text>
<subparagraph id="HB60B2CD9D03A48458EDEFA2EF003138"><enum>(A)</enum><text>any property shown
on a timely filed return of tax imposed by chapter 12 which is a taxable gift
by the covered expatriate, and</text>
</subparagraph><subparagraph id="HF73E54C1728D464F8532F7C434CC939E"><enum>(B)</enum><text>any property
included in the gross estate of the covered expatriate for purposes of chapter
11 and shown on a timely filed return of tax imposed by chapter 11 of the
estate of the covered expatriate.</text>
</subparagraph></paragraph><paragraph id="H939E2CE375014B2580420093CD763574"><enum>(3)</enum><header>Transfers in
trust</header>
<subparagraph id="H3131FAD0DED148F4B95CD69694D151D9"><enum>(A)</enum><header>Domestic
trusts</header><text>In the case of a covered gift or bequest made to a
domestic trust—</text>
<clause id="H2A9257A322AD4997BC2FA0ABD3932603"><enum>(i)</enum><text>subsection (a)
shall apply in the same manner as if such trust were a United States citizen,
and</text>
</clause><clause id="H9F153A41454E4918976B5C9B55458CB3"><enum>(ii)</enum><text>the tax imposed
by subsection (a) on such gift or bequest shall be paid by such trust.</text>
</clause></subparagraph><subparagraph id="HB08FE155BBD94F54A5A69B60F9C2E77B"><enum>(B)</enum><header>Foreign
trusts</header>
<clause id="H0ADAB0D6D2DE4B7B894690BBFE35655"><enum>(i)</enum><header>In
general</header><text>In the case of a covered gift or bequest made to a
foreign trust, subsection (a) shall apply to any distribution attributable to
such gift or bequest from such trust (whether from income or corpus) to a
United States citizen or resident in the same manner as if such distribution
were a covered gift or bequest.</text>
</clause><clause id="H8741D7C71DAF44E8AE1BA5C0AE000931"><enum>(ii)</enum><header>Deduction for
tax paid by recipient</header><text>There shall be allowed as a deduction under
section 164 the amount of tax imposed by this section which is paid or accrued
by a United States citizen or resident by reason of a distribution from a
foreign trust, but only to the extent such tax is imposed on the portion of
such distribution which is included in the gross income of such citizen or
resident.</text>
</clause><clause id="H75B9912F69524007917348006DB8004E"><enum>(iii)</enum><header>Election to be
treated as domestic trust</header><text>Solely for purposes of this section, a
foreign trust may elect to be treated as a domestic trust. Such an election may
be revoked with the consent of the Secretary.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H65469D99A79E4F9DA883A3BF605964BE"><enum>(f)</enum><header>Covered
expatriate</header><text>For purposes of this section, the term <term>covered
expatriate</term> has the meaning given to such term by section
877A(g)(1).</text>
</subsection></section></chapter><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HFD2BD5E6FD6A489587C8E48985528E38"><enum>(2)</enum><header>Clerical
amendment</header><text>The table of chapters for subtitle B is amended by
inserting after the item relating to chapter 14 the following new item:</text>
<quoted-block id="H87FE61A614824D03973D1D85EC81C029" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="chapter">Chapter 15. Gifts and bequests from
expatriates.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H6AE22B520B0D495A9B51B8DF243BC11"><enum>(c)</enum><header>Definition of
termination of United States citizenship</header>
<paragraph id="H67DD8CA164D941B8964F9292349BDE9C"><enum>(1)</enum><header>In
general</header><text>Section 7701(a) is amended by adding at the end the
following new paragraph:</text>
<quoted-block id="H7D86EA57B4614E83A00321BFCE5B2115" style="OLC">
<paragraph id="HB63C3E21C05C46BDAEAA46FEF8D06707"><enum>(50)</enum><header>Termination of
United States citizenship</header>
<subparagraph id="HC645A5AB9E744176AD7CE7EEA564DD38"><enum>(A)</enum><header>In
general</header><text>An individual shall not cease to be treated as a United
States citizen before the date on which the individual’s citizenship is treated
as relinquished under section 877A(g)(4).</text>
</subparagraph><subparagraph id="H2B7C294DCEB4450F9D2F999D07D027D4"><enum>(B)</enum><header>Dual
citizens</header><text>Under regulations prescribed by the Secretary,
subparagraph (A) shall not apply to an individual who became at birth a citizen
of the United States and a citizen of another
country.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HB874EC88F99A4F398E4537553CB5AB07"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="H06286597730F4A1BBF031308E981F802"><enum>(A)</enum><text>Paragraph (1) of
section 877(e) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HBDAE8204C97F43AAB90729CF7612833D" style="OLC">
<paragraph id="H3E746AFBC2CA484691FED39179952B18"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Any long-term
resident of the United States who ceases to be a lawful permanent resident of
the United States (within the meaning of section 7701(b)(6)) shall be treated
for purposes of this section and sections 2107, 2501, and 6039G in the same
manner as if such resident were a citizen of the United States who lost United
States citizenship on the date of such cessation or
commencement.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H0F6E4A582BB94379A7F7E8A4C00077B2"><enum>(B)</enum><text>Paragraph (6) of
section 7701(b) is amended by adding at the end the following flush
sentence:</text>
<quoted-block display-inline="no-display-inline" id="H289A9CE15A474421949D81AE84ACDEAB" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">An
individual shall cease to be treated as a lawful permanent resident of the
United States if such individual commences to be treated as a resident of a
foreign country under the provisions of a tax treaty between the United States
and the foreign country, does not waive the benefits of such treaty applicable
to residents of the foreign country, and notifies the Secretary of the
commencement of such
treatment.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H645F4E9DB9264D94BB42FE18F40935D5"><enum>(C)</enum><text>Section 7701 is
amended by striking subsection (n) and by redesignating subsections (o) and (p)
as subsections (n) and (o), respectively.</text>
</subparagraph></paragraph></subsection><subsection id="HE49F9297A1C54FD5A57900441EDBE64D"><enum>(d)</enum><header>Information
returns</header><text>Section 6039G is amended—</text>
<paragraph id="H50504F03B34B4D599347E497ABB369C"><enum>(1)</enum><text>by
inserting <quote>or 877A</quote> after <quote>section 877(b)</quote> in
subsection (a), and</text>
</paragraph><paragraph id="H14DC4604BD2D42DE92773E48D5C182B8"><enum>(2)</enum><text>by inserting
<quote>or 877A</quote> after <quote>section 877(a)</quote> in subsection
(d).</text>
</paragraph></subsection><subsection id="H309325067ED24A6792E5E265D5B8356"><enum>(e)</enum><header>Clerical
amendment</header><text>The table of sections for subpart A of part II of
subchapter N of chapter 1 is amended by inserting after the item relating to
section 877 the following new item:</text>
<quoted-block id="H0C67AA57DCC145C893C054090EB01AA" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 877A. Tax responsibilities of
expatriation.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H780613F4B133440E87C2CCC179522858"><enum>(f)</enum><header>Effective
date</header>
<paragraph id="HB6B03F0D45EF49A3A5897BB5F3ABFF2D"><enum>(1)</enum><header>In
general</header><text>Except as provided in this subsection, the amendments
made by this section shall apply to expatriates (as defined in section 877A(g)
of the Internal Revenue Code of 1986, as added by this section) whose
expatriation date (as so defined) is on or after the date of the enactment of
this Act.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H96E79D7AF6C445FE93129BA3A0EB59C2"><enum>(2)</enum><header>Gifts and
bequests</header><text><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/15">Chapter 15</external-xref> of the Internal
Revenue Code of 1986 (as added by subsection (b)) shall apply to covered gifts
and bequests (as defined in section 2801 of such Code, as so added) received on
or after the date of the enactment of this Act, regardless of when the
transferor expatriated.</text>
</paragraph></subsection></section>
November 13, 2007
Read twice and placed on the calendar