[Congressional Record Volume 153, Number 194 (Tuesday, December 18, 2007)]
[House]
[Pages H16772-H16788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONCURRENCE BY HOUSE WITH AMENDMENT IN SENATE AMENDMENTS
TO H.R. 3997, HEROES EARNINGS ASSISTANCE AND RELIEF TAX ACT OF 2007
Mr. LARSON of Connecticut. Mr. Speaker, I move to suspend the rules
and agree to the resolution (H. Res. 884) providing for the concurrence
by the House in the Senate amendments to H.R. 3997, with an amendment.
The Clerk read the title of the resolution.
The text of the resolution is as follows:
H. Res. 884
Resolved, That upon the adoption of this resolution the
House shall be considered to have taken from the Speaker's
table the bill, H.R. 3997, with the Senate amendments
thereto, and to have (1) concurred in the Senate amendment to
the title of the bill, and (2) concurred in the Senate
amendment to the text of the bill with the following
amendment:
In lieu of the matter proposed to be inserted by the
amendment of the Senate to the text of the bill, insert the
following:
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Heroes
Earnings Assistance and Relief Tax Act of 2007''.
(b) Reference.--Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of
1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title, etc.
TITLE I--BENEFITS FOR MILITARY AND VOLUNTEER FIREFIGHTERS
Sec. 101. Election to include combat pay as earned income for purposes
of earned income tax credit.
Sec. 102. Modification of mortgage revenue bonds for veterans.
Sec. 103. Survivor and disability payments with respect to qualified
military service.
Sec. 104. Treatment of differential military pay as wages.
Sec. 105. Extension of exclusion from income for benefits provided to
volunteer firefighters and emergency medical responders.
Sec. 106. Special period of limitation when uniformed services retired
pay is reduced as a result of award of disability
compensation.
Sec. 107. Distributions from retirement plans to individuals called to
active duty.
Sec. 108. Disclosure of return information relating to veterans
programs made permanent.
Sec. 109. Contributions of military death gratuities to Roth IRAs and
Education Savings Accounts.
Sec. 110. Suspension of 5-year period during service with the Peace
Corps.
Sec. 111. Credit for employer differential wage payments to employees
who are active duty members of the uniformed services.
Sec. 112. State payments to service members treated as qualified
military benefits.
Sec. 113. Permanent exclusion of gain from sale of a principal
residence by certain employees of the intelligence
community.
Sec. 114. Special disposition rules for unused benefits in health
flexible spending arrangements of individuals called to
active duty.
TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME
Sec. 201. Treatment of uniformed service cash remuneration as earned
income.
Sec. 202. State annuities for certain veterans to be disregarded in
determining supplemental security income benefits.
Sec. 203. Exclusion of AmeriCorps benefits for purposes of determining
supplemental security income eligibility and benefit
amounts.
Sec. 204. Effective date.
TITLE III--REVENUE PROVISIONS
Sec. 301. Increase in penalty for failure to file partnership returns.
[[Page H16773]]
Sec. 302. Increase in penalty for failure to file S corporation
returns.
Sec. 303. Increase in minimum penalty on failure to file a return of
tax.
Sec. 304. Increase in information return penalties.
Sec. 305. Revision of tax rules on expatriation.
TITLE IV--TAX TECHNICAL CORRECTIONS
Sec. 401. Short title.
Sec. 402. Amendment related to the Tax Relief and Health Care Act of
2006.
Sec. 403. Amendments related to title XII of the Pension Protection Act
of 2006.
Sec. 404. Amendments related to the Tax Increase Prevention and
Reconciliation Act of 2005.
Sec. 405. Amendments related to the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users.
Sec. 406. Amendments related to the Energy Policy Act of 2005.
Sec. 407. Amendments related to the American Jobs Creation Act of 2004.
Sec. 408. Amendments related to the Economic Growth and Tax Relief
Reconciliation Act of 2001.
Sec. 409. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 410. Amendment related to the Internal Revenue Service
Restructuring and Reform Act of 1998.
Sec. 411. Clerical corrections.
TITLE V--PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH
BENEFITS
Sec. 501. Parity in application of certain limits to mental health
benefits.
TITLE I--BENEFITS FOR MILITARY AND VOLUNTEER FIREFIGHTERS
SEC. 101. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR
PURPOSES OF EARNED INCOME TAX CREDIT.
(a) In General.--Clause (vi) of section 32(c)(2)(B)
(defining earned income) is amended to read as follows:
``(vi) a taxpayer may elect to treat amounts excluded from
gross income by reason of section 112 as earned income.''.
(b) Sunset Not Applicable.--Section 105 of the Working
Families Tax Relief Act of 2004 (relating to application of
EGTRRA sunset to this title) shall not apply to section
104(b) of such Act.
(c) Effective Date.--The amendment made by this section
shall apply to taxable years ending after December 31, 2007.
SEC. 102. MODIFICATION OF MORTGAGE REVENUE BONDS FOR
VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer
Requirement.--Subparagraph (D) of section 143(d)(2) (relating
to exceptions) is amended by striking ``and before January 1,
2008''.
(b) Increase in Bond Limitation for Alaska, Oregon, and
Wisconsin.--Clause (ii) of section 143(l)(3)(B) (relating to
State veterans limit) is amended by striking ``$25,000,000''
each place it appears and inserting ``$100,000,000''.
(c) Definition of Qualified Veteran.--Paragraph (4) of
section 143(l) (defining qualified veteran) is amended to
read as follows:
``(4) Qualified veteran.--For purposes of this subsection,
the term `qualified veteran' means any veteran who--
``(A) served on active duty, and
``(B) applied for the financing before the date 25 years
after the last date on which such veteran left active
service.''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after December 31, 2007.
SEC. 103. SURVIVOR AND DISABILITY PAYMENTS WITH RESPECT TO
QUALIFIED MILITARY SERVICE.
(a) Plan Qualification Requirement for Death Benefits Under
USERRA-Qualified Active Military Service.--Subsection (a) of
section 401 (relating to requirements for qualification) is
amended by inserting after paragraph (36) the following new
paragraph:
``(37) Death benefits under userra-qualified active
military service.--A trust shall not constitute a qualified
trust unless the plan provides that, in the case of a
participant who dies while performing qualified military
service (as defined in section 414(u)), the survivors of the
participant are entitled to any additional benefits (other
than benefit accruals relating to the period of qualified
military service) provided under the plan had the participant
resumed and then terminated employment on account of
death.''.
(b) Treatment in the Case of Death or Disability Resulting
From Active Military Service for Benefit Accrual Purposes.--
Subsection (u) of section 414 (relating to special rules
relating to veterans' reemployment rights under USERRA) is
amended by redesignating paragraphs (9) and (10) as
paragraphs (10) and (11), respectively, and by inserting
after paragraph (8) the following new paragraph:
``(9) Treatment in the case of death or disability
resulting from active military service.--
``(A) In general.--For benefit accrual purposes, an
employer sponsoring a retirement plan may treat an individual
who dies or becomes disabled (as defined under the terms of
the plan) while performing qualified military service with
respect to the employer maintaining the plan as if the
individual has resumed employment in accordance with the
individual's reemployment rights under chapter 43 of title
38, United States Code, on the day preceding death or
disability (as the case may be) and terminated employment on
the actual date of death or disability. In the case of any
such treatment, and subject to subparagraphs (B) and (C), any
full or partial compliance by such plan with respect to the
benefit accrual requirements of paragraph (8) with respect to
such individual shall be treated for purposes of paragraph
(1) as if such compliance were required under such chapter
43.
``(B) Nondiscrimination requirement.--Subparagraph (A)
shall apply only if all individuals performing qualified
military service with respect to the employer maintaining the
plan (as determined under subsections (b), (c), (m), and (o))
who die or became disabled as a result of performing
qualified military service prior to reemployment by the
employer are credited with service and benefits on reasonably
equivalent terms.
``(C) Determination of benefits.--The amount of employee
contributions and the amount of elective deferrals of an
individual treated as reemployed under subparagraph (A) for
purposes of applying paragraph (8)(C) shall be determined on
the basis of the individual's average actual employee
contributions or elective deferrals for the lesser of--
``(i) the 12-month period of service with the employer
immediately prior to qualified military service, or
``(ii) if service with the employer is less than such 12-
month period, the actual length of continuous service with
the employer.''.
(c) Conforming Amendments.--
(1) Section 404(a)(2) is amended by striking ``and (31)''
and inserting ``(31), and (37)''.
(2) Section 403(b) is amended by adding at the end the
following new paragraph:
``(14) Death benefits under userra-qualified active
military service.--This subsection shall not apply to an
annuity contract unless such contract meets the requirements
of section 401(a)(37).''.
(3) Section 457(g) is amended by adding at the end the
following new paragraph:
``(4) Death benefits under userra-qualified active military
service.--A plan described in paragraph (1) shall not be
treated as an eligible deferred compensation plan unless such
plan meets the requirements of section 401(a)(37).''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to deaths and disabilities occurring on or
after January 1, 2007.
(2) Provisions relating to plan amendments.--
(A) In general.--If this subparagraph applies to any plan
or contract amendment, such plan or contract shall be treated
as being operated in accordance with the terms of the plan
during the period described in subparagraph (B)(iii).
(B) Amendments to which subparagraph (A) applies.--
(i) In general.--Subparagraph (A) shall apply to any
amendment to any plan or annuity contract which is made--
(I) pursuant to the amendments made by subsection (a) or
pursuant to any regulation issued by the Secretary of the
Treasury under subsection (a), and
(II) on or before the last day of the first plan year
beginning on or after January 1, 2009.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this clause
shall be applied by substituting ``2011'' for ``2009'' in
subclause (II).
(ii) Conditions.--This paragraph shall not apply to any
amendment unless--
(I) the plan or contract is operated as if such plan or
contract amendment were in effect for the period described in
clause (iii), and
(II) such plan or contract amendment applies retroactively
for such period.
(iii) Period described.--The period described in this
clause is the period--
(I) beginning on the effective date specified by the plan,
and
(II) ending on the date described in clause (i)(II) (or, if
earlier, the date the plan or contract amendment is adopted).
SEC. 104. TREATMENT OF DIFFERENTIAL MILITARY PAY AS WAGES.
(a) Income Tax Withholding on Differential Wage Payments.--
(1) In general.--Section 3401 (relating to definitions) is
amended by adding at the end the following new subsection:
``(h) Differential Wage Payments to Active Duty Members of
the Uniformed Services.--
``(1) In general.--For purposes of subsection (a), any
differential wage payment shall be treated as a payment of
wages by the employer to the employee.
``(2) Differential wage payment.--For purposes of paragraph
(1), the term `differential wage payment' means any payment
which--
``(A) is made by an employer to an individual with respect
to any period during which the individual is performing
service in the uniformed services (as defined in chapter 43
of title 38, United States Code) while on active duty for a
period of more than 30 days, and
``(B) represents all or a portion of the wages the
individual would have received from the employer if the
individual were performing service for the employer.''.
[[Page H16774]]
(2) Effective date.--The amendment made by this subsection
shall apply to remuneration paid after December 31, 2007.
(b) Treatment of Differential Wage Payments for Retirement
Plan Purposes.--
(1) Pension plans.--
(A) In general.--Section 414(u) (relating to special rules
relating to veterans' reemployment rights under USERRA), as
amended by section 103(b), is amended by adding at the end
the following new paragraph:
``(12) Treatment of differential wage payments.--
``(A) In general.--Except as provided in this paragraph,
for purposes of applying this title to a retirement plan to
which this subsection applies--
``(i) an individual receiving a differential wage payment
shall be treated as an employee of the employer making the
payment,
``(ii) the differential wage payment shall be treated as
compensation, and
``(iii) the plan shall not be treated as failing to meet
the requirements of any provision described in paragraph
(1)(C) by reason of any contribution or benefit which is
based on the differential wage payment.
``(B) Special rule for distributions.--
``(i) In general.--Notwithstanding subparagraph (A)(i), for
purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii),
403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be
treated as having been severed from employment during any
period the individual is performing service in the uniformed
services described in section 3401(h)(2)(A).
``(ii) Limitation.--If an individual elects to receive a
distribution by reason of clause (i), the plan shall provide
that the individual may not make an elective deferral or
employee contribution during the 6-month period beginning on
the date of the distribution.
``(C) Nondiscrimination requirement.--Subparagraph (A)(iii)
shall apply only if all employees of an employer (as
determined under subsections (b), (c), (m), and (o))
performing service in the uniformed services described in
section 3401(h)(2)(A) are entitled to receive differential
wage payments on reasonably equivalent terms and, if eligible
to participate in a retirement plan maintained by the
employer, to make contributions based on the payments on
reasonably equivalent terms. For purposes of applying this
subparagraph, the provisions of paragraphs (3), (4), and (5)
of section 410(b) shall apply.
``(D) Differential wage payment.--For purposes of this
paragraph, the term `differential wage payment' has the
meaning given such term by section 3401(h)(2).''.
(B) Conforming amendment.--The heading for section 414(u)
is amended by inserting ``and to Differential Wage Payments
to Members on Active Duty'' after ``USERRA''.
(2) Differential wage payments treated as compensation for
individual retirement plans.--Section 219(f)(1) (defining
compensation) is amended by adding at the end the following
new sentence: ``The term compensation includes any
differential wage payment (as defined in section
3401(h)(2)).''.
(3) Effective date.--The amendments made by this subsection
shall apply to years beginning after December 31, 2007.
(c) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any plan or
annuity contract amendment, such plan or contract shall be
treated as being operated in accordance with the terms of the
plan or contract during the period described in paragraph
(2)(B)(i).
(2) Amendments to which section applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is made--
(i) pursuant to any amendment made by subsection (b)(1),
and
(ii) on or before the last day of the first plan year
beginning on or after January 1, 2009.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this
subparagraph shall be applied by substituting ``2011'' for
``2009'' in clause (ii).
(B) Conditions.--This subsection shall not apply to any
plan or annuity contract amendment unless--
(i) during the period beginning on the date the amendment
described in subparagraph (A)(i) takes effect and ending on
the date described in subparagraph (A)(ii) (or, if earlier,
the date the plan or contract amendment is adopted), the plan
or contract is operated as if such plan or contract amendment
were in effect, and
(ii) such plan or contract amendment applies retroactively
for such period.
SEC. 105. EXTENSION OF EXCLUSION FROM INCOME FOR BENEFITS
PROVIDED TO VOLUNTEER FIREFIGHTERS AND
EMERGENCY MEDICAL RESPONDERS.
Subsection (d) of section 139B (relating to termination),
as added to the Internal Revenue Code of 1986 by section 5 of
the Mortgage Forgiveness Debt Relief Act of 2007, is amended
by striking ``December 31, 2010'' and inserting ``December
31, 2015''.
SEC. 106. SPECIAL PERIOD OF LIMITATION WHEN UNIFORMED
SERVICES RETIRED PAY IS REDUCED AS A RESULT OF
AWARD OF DISABILITY COMPENSATION.
(a) In General.--Subsection (d) of section 6511 (relating
to special rules applicable to income taxes) is amended by
adding at the end the following new paragraph:
``(8) Special rules when uniformed services retired pay is
reduced as a result of award of disability compensation.--
``(A) Period of limitation on filing claim.--If the claim
for credit or refund relates to an overpayment of tax imposed
by subtitle A on account of--
``(i) the reduction of uniformed services retired pay
computed under section 1406 or 1407 of title 10, United
States Code, or
``(ii) the waiver of such pay under section 5305 of title
38 of such Code,
as a result of an award of compensation under title 38 of
such Code pursuant to a determination by the Secretary of
Veterans Affairs, the 3-year period of limitation prescribed
in subsection (a) shall be extended, for purposes of
permitting a credit or refund based upon the amount of such
reduction or waiver, until the end of the 1-year period
beginning on the date of such determination.
``(B) Limitation to 5 taxable years.--Subparagraph (A)
shall not apply with respect to any taxable year which began
more than 5 years before the date of such determination.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to claims for credit or refund filed after the
date of the enactment of this Act.
(c) Transition Rules.--In the case of a determination
described in paragraph (8) of section 6511(d) of the Internal
Revenue Code of 1986 (as added by this section) which is made
by the Secretary of Veterans Affairs after December 31, 2000,
and before the date of the enactment of this Act, such
paragraph--
(1) shall not apply with respect to any taxable year which
began before January 1, 2001, and
(2) shall be applied by substituting for ``the date of such
determination'' in subparagraph (A) thereof.
SEC. 107. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS
CALLED TO ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is
amended by striking ``, and before December 31, 2007''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals ordered or called to active duty
on or after December 31, 2007.
SEC. 108. DISCLOSURE OF RETURN INFORMATION RELATING TO
VETERANS PROGRAMS MADE PERMANENT.
(a) In General.--Subparagraph (D) of section 6103(l)(7)
(relating to disclosure of return information to Federal,
State, and local agencies administering certain programs
under the Social Security Act, the Food Stamp Act of 1977, or
title 38, United States Code or certain housing assistance
programs) is amended by striking the last sentence.
(b) Technical Amendment.--Section 6103(l)(7)(D)(viii)(III)
is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2),
1710(b), and 1712(a)(2)(B)'' and inserting ``sections
1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
SEC. 109. CONTRIBUTIONS OF MILITARY DEATH GRATUITIES TO ROTH
IRAS AND EDUCATION SAVINGS ACCOUNTS.
(a) Provision in Effect Before Pension Protection Act.--
Subsection (e) of section 408A (relating to qualified
rollover contribution), as in effect before the amendments
made by section 824 of the Pension Protection Act of 2006, is
amended to read as follows:
``(e) Qualified Rollover Contribution.--For purposes of
this section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution to a Roth IRA
from another such account, or from an individual retirement
plan, but only if such rollover contribution meets the
requirements of section 408(d)(3). Such term includes a
rollover contribution described in section 402A(c)(3)(A). For
purposes of section 408(d)(3)(B), there shall be disregarded
any qualified rollover contribution from an individual
retirement plan (other than a Roth IRA) to a Roth IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before the
end of the 1-year period beginning on the date on which such
individual receives an amount under section 1477 of title 10,
United States Code, or section 1967 of title 38 of such Code,
with respect to a person, to the extent that such
contribution does not exceed--
``(i) the sum of the amounts received during such period by
such individual under such sections with respect to such
person, reduced by
``(ii) the amounts so received which were contributed to a
Coverdell education savings account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to apply.--
Section 408(d)(3)(B) shall not apply with respect to amounts
treated as a rollover by subparagraph (A).
``(C) Application of section 72.--For purposes of applying
section 72 in the case of a distribution which is not a
qualified distribution, the amount treated as a rollover by
reason of subparagraph (A) shall be treated as investment in
the contract.''.
(b) Provision in Effect After Pension Protection Act.--
Subsection (e) of section 408A, as in effect after the
amendments made by section 824 of the Pension Protection Act
of 2006, is amended to read as follows:
``(e) Qualified Rollover Contribution.--For purposes of
this section--
[[Page H16775]]
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution--
``(A) to a Roth IRA from another such account,
``(B) from an eligible retirement plan, but only if--
``(i) in the case of an individual retirement plan, such
rollover contribution meets the requirements of section
408(d)(3), and
``(ii) in the case of any eligible retirement plan (as
defined in section 402(c)(8)(B) other than clauses (i) and
(ii) thereof), such rollover contribution meets the
requirements of section 402(c), 403(b)(8), or 457(e)(16), as
applicable.
For purposes of section 408(d)(3)(B), there shall be
disregarded any qualified rollover contribution from an
individual retirement plan (other than a Roth IRA) to a Roth
IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before the
end of the 1-year period beginning on the date on which such
individual receives an amount under section 1477 of title 10,
United States Code, or section 1967 of title 38 of such Code,
with respect to a person, to the extent that such
contribution does not exceed--
``(i) the sum of the amounts received during such period by
such individual under such sections with respect to such
person, reduced by
``(ii) the amounts so received which were contributed to a
Coverdell education savings account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to apply.--
Section 408(d)(3)(B) shall not apply with respect to amounts
treated as a rollover by the subparagraph (A).
``(C) Application of section 72.--For purposes of applying
section 72 in the case of a distribution which is not a
qualified distribution, the amount treated as a rollover by
reason of subparagraph (A) shall be treated as investment in
the contract.''.
(c) Education Savings Accounts.--Subsection (d) of section
530 is amended by adding at the end the following new
paragraph:
``(9) Military death gratuity.--
``(A) In general.--For purposes of this section, the term
`rollover contribution' includes a contribution to a
Coverdell education savings account made before the end of
the 1-year period beginning on the date on which the
contributor receives an amount under section 1477 of title
10, United States Code, or section 1967 of title 38 of such
Code, with respect to a person, to the extent that such
contribution does not exceed--
``(i) the sum of the amounts received during such period by
such contributor under such sections with respect to such
person, reduced by
``(ii) the amounts so received which were contributed to a
Roth IRA under section 408A(e)(2) or to another Coverdell
education savings account.
``(B) Annual limit on number of rollovers not to apply.--
The last sentence of paragraph (5) shall not apply with
respect to amounts treated as a rollover by the subparagraph
(A).
``(C) Application of section 72.--For purposes of applying
section 72 in the case of a distribution which is includible
in gross income under paragraph (1), the amount treated as a
rollover by reason of subparagraph (A) shall be treated as
investment in the contract.''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraphs (2) and
(3), the amendments made by this section shall apply with
respect to deaths from injuries occurring on or after the
date of the enactment of this Act.
(2) Application of amendments to deaths from injuries
occurring on or after october 7, 2001, and before
enactment.--The amendments made by this section shall apply
to any contribution made pursuant to section 408A(e)(2) or
530(d)(5) of the Internal Revenue Code of 1986, as amended by
this Act, with respect to amounts received under section 1477
of title 10, United States Code, or under section 1967 of
title 38 of such Code, for deaths from injuries occurring on
or after October 7, 2001, and before the date of the
enactment of this Act if such contribution is made not later
than 1 year after the date of the enactment of this Act.
(3) Pension protection act changes.--Section 408A(e)(1) of
the Internal Revenue Code of 1986 (as in effect after the
amendments made by subsection (b)) shall apply to taxable
years beginning after December 31, 2007.
SEC. 110. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE WITH THE
PEACE CORPS.
(a) In General.--Subsection (d) of section 121 (relating to
special rules) is amended by adding at the end the following
new paragraph:
``(12) Peace corps.--
``(A) In general.--At the election of an individual with
respect to a property, the running of the 5-year period
described in subsections (a) and (c)(1)(B) and paragraph (7)
of this subsection with respect to such property shall be
suspended during any period that such individual or such
individual's spouse is serving outside the United States--
``(i) on qualified official extended duty (as defined in
paragraph (9)(C)) as an employee of the Peace Corps, or
``(ii) as an enrolled volunteer or volunteer leader under
section 5 or 6 (as the case may be) of the Peace Corps Act
(22 U.S.C. 2504, 2505).
``(B) Applicable rules.--For purposes of subparagraph (A),
rules similar to the rules of subparagraphs (B) and (D) shall
apply.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 111. CREDIT FOR EMPLOYER DIFFERENTIAL WAGE PAYMENTS TO
EMPLOYEES WHO ARE ACTIVE DUTY MEMBERS OF THE
UNIFORMED SERVICES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business credits) is amended by adding
at the end the following new section:
``SEC. 45O. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE
DUTY MEMBERS OF THE UNIFORMED SERVICES.
``(a) General Rule.--For purposes of section 38, in the
case of an eligible small business employer, the differential
wage payment credit for any taxable year is an amount equal
to 20 percent of the sum of the eligible differential wage
payments for each of the qualified employees of the taxpayer
during such taxable year.
``(b) Definitions.--For purposes of this section--
``(1) Eligible differential wage payments.--The term
`eligible differential wage payments' means, with respect to
each qualified employee, so much of the differential wage
payments (as defined in section 3401(h)(2)) paid to such
employee for the taxable year as does not exceed $20,000.
``(2) Qualified employee.--The term `qualified employee'
means a person who has been an employee of the taxpayer for
the 91-day period immediately preceding the period for which
any differential wage payment is made.
``(3) Eligible small business employer.--
``(A) In general.--The term `eligible small business
employer' means, with respect to any taxable year, any
employer which--
``(i) employed an average of less than 50 employees on
business days during such taxable year, and
``(ii) under a written plan of the employer, provides
eligible differential wage payments to every qualified
employee of the employer.
``(B) Controlled groups.--For purposes of subparagraph (A),
all persons treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 shall be treated as a
single employer.
``(c) Coordination With Other Credits.--The amount of
credit otherwise allowable under this chapter with respect to
compensation paid to any employee shall be reduced by the
credit determined under this section with respect to such
employee.
``(d) Disallowance for Failure To Comply With Employment or
Reemployment Rights of Members of the Reserve Components of
the Armed Forces of the United States.--No credit shall be
allowed under subsection (a) to a taxpayer for--
``(1) any taxable year, beginning after the date of the
enactment of this section, in which the taxpayer is under a
final order, judgment, or other process issued or required by
a district court of the United States under section 4323 of
title 38 of the United States Code with respect to a
violation of chapter 43 of such title, and
``(2) the 2 succeeding taxable years.
``(e) Certain Rules to Apply.--For purposes of this
section, rules similar to the rules of subsections (c), (d),
and (e) of section 52 shall apply.
``(f) Termination.--This section shall not apply to any
payments made after December 31, 2009.''.
(b) Credit Treated as Part of General Business Credit.--
Section 38(b) (relating to general business credit) is
amended by striking ``plus'' at the end of paragraph (30), by
striking the period at the end of paragraph (31) and
inserting ``, plus'', and by adding at the end of following
new paragraph:
``(32) the differential wage payment credit determined
under section 45O(a).''.
(c) No Deduction for Compensation Taken Into Account for
Credit.--Section 280C(a) (relating to rule for employment
credits) is amended by inserting ``45O(a),'' after
``45A(a),''.
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:
``Sec. 45O. Employer wage credit for employees who are active duty
members of the uniformed services.''.
(e) Effective Date.--The amendments made by this section
shall apply to amounts paid after the date of the enactment
of this Act.
SEC. 112. STATE PAYMENTS TO SERVICE MEMBERS TREATED AS
QUALIFIED MILITARY BENEFITS.
(a) In General.--Section 134(b) (defining qualified
military benefit) is amended by adding at the end the
following new paragraph:
``(6) Certain state payments.--The term `qualified military
benefit' includes any bonus payment by a State or political
subdivision thereof to any member or former member of the
uniformed services of the United States or any dependent of
such member only by reason of such member's service in an
combat zone (as defined in section 112(c)(2), determined
without regard to the parenthetical).''.
(b) Effective Date.--The amendment made by this section
shall apply to payments
[[Page H16776]]
made before, on, or after the date of the enactment of this
Act.
SEC. 113. PERMANENT EXCLUSION OF GAIN FROM SALE OF A
PRINCIPAL RESIDENCE BY CERTAIN EMPLOYEES OF THE
INTELLIGENCE COMMUNITY.
(a) In General.--Section 417(e) of division A of the Tax
Relief and Health Care Act of 2006 is amended by striking
``and before January 1, 2011''.
(b) Duty Station May Be Inside United States.--Section
121(d)(9)(C) (defining qualified official extended duty) is
amended by striking clause (vi).
(c) Effective Date.--The amendments made by this section
shall apply to sales or exchanges after December 31, 2010.
SEC. 114. SPECIAL DISPOSITION RULES FOR UNUSED BENEFITS IN
HEALTH FLEXIBLE SPENDING ARRANGEMENTS OF
INDIVIDUALS CALLED TO ACTIVE DUTY.
(a) In General.--Section 125 (relating to cafeteria plans)
is amended by redesignating subsections (h) and (i) as
subsection (i) and (j), respectively, and by inserting after
subsection (g) the following new subsection:
``(h) Special Rule for Unused Benefits in Health Flexible
Spending Arrangements of Individuals Called to Active Duty.--
``(1) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan or health flexible spending arrangement merely because
such arrangement provides for qualified reservist
distributions.
``(2) Qualified reservist distribution.--For purposes of
this subsection, the term `qualified reservist distribution'
means, any distribution to an individual of all or a portion
of the balance in the employee's account under such
arrangement if--
``(A) such individual was (by reason of being a member of a
reserve component (as defined in section 101 of title 37,
United States Code)) ordered or called to active duty for a
period in excess of 179 days or for an indefinite period, and
``(B) such distribution is made during the period beginning
on the date of such order or call and ending on the last date
that reimbursements could otherwise be made under such
arrangement for the plan year which includes the date of such
order or call.''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions made after the date of the
enactment of this Act.
TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME
SEC. 201. TREATMENT OF UNIFORMED SERVICE CASH REMUNERATION AS
EARNED INCOME.
(a) In General.--Section 1612(a)(1)(A) of the Social
Security Act (42 U.S.C. 1382a(a)(1)(A)) is amended by
inserting ``(and, in the case of cash remuneration paid for
service as a member of a uniformed service (other than
payments described in paragraph (2)(H) of this subsection or
subsection (b)(20)), without regard to the limitations
contained in section 209(d))'' before the semicolon.
(b) Certain Housing Payments Treated as In-Kind Support and
Maintenance.--Section 1612(a)(2) of such Act (42 U.S.C.
1382a(a)(2)) is amended--
(1) by striking ``and'' at the end of subparagraph (F);
(2) by striking the period at the end of subparagraph (G)
and inserting ``; and''; and
(3) by adding at the end the following:
``(H) payments to or on behalf of a member of a uniformed
service for housing of the member (and his or her dependents,
if any) on a facility of a uniformed service, including
payments provided under section 403 of title 37, United
States Code, for housing that is acquired or constructed
under subchapter IV of chapter 169 of title 10 of such Code,
or any related provision of law, and any such payments shall
be treated as support and maintenance in kind subject to
subparagraph (A) of this paragraph.''.
SEC. 202. STATE ANNUITIES FOR CERTAIN VETERANS TO BE
DISREGARDED IN DETERMINING SUPPLEMENTAL
SECURITY INCOME BENEFITS.
(a) Income Disregard.--Section 1612(b) of the Social
Security Act (42 U.S.C. 1382a(b)) is amended--
(1) by striking ``and'' at the end of paragraph (22);
(2) by striking the period at the end of paragraph (23) and
inserting ``; and''; and
(3) by adding at the end the following:
``(24) any annuity paid by a State to the individual (or
such spouse) on the basis of the individual's being a veteran
(as defined in section 101 of title 38, United States Code),
and blind, disabled, or aged.''.
(b) Resource Disregard.--Section 1613(a) of such Act (42
U.S.C. 1382b(a)) is amended--
(1) by striking ``and'' at the end of paragraph (14);
(2) by striking the period at the end of paragraph (15) and
inserting ``; and''; and
(3) by inserting after paragraph (15) the following:
``(16) for the month of receipt and every month thereafter,
any annuity paid by a State to the individual (or such
spouse) on the basis of the individual's being a veteran (as
defined in section 101 of title 38, United States Code), and
blind, disabled, or aged.''.
SEC. 203. EXCLUSION OF AMERICORPS BENEFITS FOR PURPOSES OF
DETERMINING SUPPLEMENTAL SECURITY INCOME
ELIGIBILITY AND BENEFIT AMOUNTS.
Section 1612(b) of the Social Security Act (42 U.S.C.
1382a(b)), as amended by section 202(a) of this Act, is
amended--
(1) in paragraph (23), by striking ``and'' at the end;
(2) in paragraph (24), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(25) any benefit (whether cash or in-kind) conferred upon
(or paid on behalf of) a participant in an AmeriCorps
position approved by the Corporation for National and
Community Service under section 123 of the National and
Community Service Act of 1990 (42 U.S.C. 12573).''.
SEC. 204. EFFECTIVE DATE.
The amendments made by this title shall be effective with
respect to benefits payable for months beginning after 60
days after the date of the enactment of this Act.
TITLE III--REVENUE PROVISIONS
SEC. 301. INCREASE IN PENALTY FOR FAILURE TO FILE PARTNERSHIP
RETURNS.
(a) Increase in Penalty Amount.--Paragraph (1) of section
6698(b) (relating to amount per month), as amended by section
8 of the Mortgage Forgiveness Debt Relief Act of 2007, is
amended by striking ``$85'' and inserting ``$100''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the amendments made by
section 8 of the Mortgage Forgiveness Debt Relief Act of
2007.
SEC. 302. INCREASE IN PENALTY FOR FAILURE TO FILE S
CORPORATION RETURNS.
(a) In General.--Paragraph (1) of section 6699(b) (relating
to amount per month), as added to the Internal Revenue Code
of 1986 by section 9 of the Mortgage Forgiveness Debt Relief
Act of 2007, is amended by striking ``$85'' and inserting
``$100''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the amendments made by
section 9 of the Mortgage Forgiveness Debt Relief Act of
2007.
SEC. 303. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A
RETURN OF TAX.
(a) In General.--Subsection (a) of section 6651 is amended
by striking ``$100'' in the last sentence and inserting
``$225''.
(b) Effective Date.--The amendment made by this section
shall apply to returns the due date for the filing of which
(including extensions) is after December 31, 2007.
SEC. 304. INCREASE IN INFORMATION RETURN PENALTIES.
(a) Failure to File Correct Information Returns.--
(1) In general.--Subsections (a)(1), (b)(1)(A), and
(b)(2)(A) of section 6721 are each amended by striking
``$50'' and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a)(1),
(d)(1)(A), and (e)(3)(A) of section 6721 are each amended by
striking ``$250,000'' and inserting ``$1,500,000''.
(b) Reduction Where Correction Within 30 Days.--
(1) In general.--Subparagraph (A) of section 6721(b)(1) is
amended by striking ``$15'' and inserting ``$50''.
(2) Aggregate annual limitation.--Subsections (b)(1)(B) and
(d)(1)(B) of section 6721 are each amended by striking
``$75,000'' and inserting ``$500,000''.
(c) Reduction Where Correction on or Before August 1.--
(1) In general.--Subparagraph (A) of section 6721(b)(2) is
amended by striking ``$30'' and inserting ``$75''.
(2) Aggregate annual limitation.--Subsections (b)(2)(B) and
(d)(1)(C) of section 6721are each amended by striking
``$150,000'' and inserting ``$1,000,000''.
(d) Aggregate Annual Limitations for Persons With Gross
Receipts of Not More Than $5,000,000.--Paragraph (1) of
section 6721(d) is amended--
(1) by striking ``$100,000'' in subparagraph (A) and
inserting ``$500,000'',
(2) by striking ``$25,000'' in subparagraph (B) and
inserting ``$100,000'', and
(3) by striking ``$50,000'' in subparagraph (C) and
inserting ``$250,000''.
(e) Penalty in Case of Intentional Disregard.--Paragraph
(2) of section 6721(e) is amended by striking ``$100'' and
inserting ``$250''.
(f) Failure to Furnish Correct Payee Statements.--
(1) In general.--Subsection (a) of section 6722 is amended
by striking ``$50'' and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a) and
(c)(2)(A) of section 6722 are each amended by striking
``$100,000'' and inserting ``$500,000''.
(3) Penalty in case of intentional disregard.--Paragraph
(1) of section 6722(c) is amended by striking ``$100'' and
inserting ``$250''.
(g) Failure To Comply With Other Information Reporting
Requirements.--Section 6723 is amended--
(1) by striking ``$50'' and inserting ``$100'', and
(2) by striking ``$100,000'' and inserting ``$500,000''.
(h) Effective Date.--The amendments made by this section
shall apply with respect to information returns required to
be filed on or after January 1, 2008.
SEC. 305. REVISION OF TAX RULES ON EXPATRIATION.
(a) In General.--Subpart A of part II of subchapter N of
chapter 1 is amended by inserting after section 877 the
following new section:
``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.
``(a) General Rules.--For purposes of this subtitle--
[[Page H16777]]
``(1) Mark to market.--All property of a covered expatriate
shall be treated as sold on the day before the expatriation
date for its fair market value.
``(2) Recognition of gain or loss.--In the case of any sale
under paragraph (1)--
``(A) 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
``(B) 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.
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).
``(3) Exclusion for certain gain.--
``(A) In general.--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.
``(B) Adjustment for inflation.--
``(i) In general.--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--
``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, by substituting `calendar year 2007' for
`calendar year 1992' in subparagraph (B) thereof.
``(ii) Rounding.--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.
``(b) Election To Defer Tax.--
``(1) In general.--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).
``(2) Determination of tax with respect to property.--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.
``(3) Termination of extension.--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).
``(4) Security.--
``(A) In general.--No election may be made under paragraph
(1) with respect to any property unless adequate security is
provided with respect to such property.
``(B) Adequate security.--For purposes of subparagraph (A),
security with respect to any property shall be treated as
adequate security if--
``(i) 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
``(ii) it is another form of security for such payment
(including letters of credit) that meets such requirements as
the Secretary may prescribe.
``(5) Waiver of certain rights.--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.
``(6) Elections.--An election under paragraph (1) shall
only apply to property described in the election and, once
made, is irrevocable.
``(7) Interest.--For purposes of section 6601, the last
date for the payment of tax shall be determined without
regard to the election under this subsection.
``(c) Exception for Certain Property.--Subsection (a) shall
not apply to--
``(1) any deferred compensation item (as defined in
subsection (d)(4)),
``(2) any specified tax deferred account (as defined in
subsection (e)(2)), and
``(3) any interest in a nongrantor trust (as defined in
subsection (f)(3)).
``(d) Treatment of Deferred Compensation Items.--
``(1) Withholding on eligible deferred compensation
items.--
``(A) In general.--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.
``(B) Taxable payment.--For purposes of subparagraph (A),
the term `taxable payment' 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.
``(2) Other deferred compensation items.--In the case of
any deferred compensation item which is not an eligible
deferred compensation item--
``(A)(i) 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
``(ii) 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,
``(B) no early distribution tax shall apply by reason of
such treatment, and
``(C) appropriate adjustments shall be made to subsequent
distributions from the plan to reflect such treatment.
``(3) Eligible deferred compensation items.--For purposes
of this subsection, the term `eligible deferred compensation
item' means any deferred compensation item with respect to
which--
``(A) the payor of such item is--
``(i) a United States person, or
``(ii) 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
``(B) the covered expatriate--
``(i) notifies the payor of his status as a covered
expatriate, and
``(ii) makes an irrevocable waiver of any right to claim
any reduction under any treaty with the United States in
withholding on such item.
``(4) Deferred compensation item.--For purposes of this
subsection, the term `deferred compensation item' means--
``(A) any interest in a plan or arrangement described in
section 219(g)(5),
``(B) any interest in a foreign pension plan or similar
retirement arrangement or program,
``(C) any item of deferred compensation, and
``(D) 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.
``(5) Exception.--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.
``(6) Special rules.--
``(A) Application of withholding rules.--Rules similar to
the rules of subchapter B of chapter 3 shall apply for
purposes of this subsection.
``(B) Application of tax.--Any item subject to the
withholding tax imposed under paragraph (1) shall be subject
to tax under section 871.
``(C) Coordination with other withholding requirements.--
Any item subject to withholding under paragraph (1) shall not
be subject to withholding under section 1441 or chapter 24.
``(e) Treatment of Specified Tax Deferred Accounts.--
``(1) Account treated as distributed.--In the case of any
interest in a specified tax deferred account held by a
covered expatriate on the day before the expatriation date--
``(A) the covered expatriate shall be treated as receiving
a distribution of his entire interest in such account on the
day before the expatriation date,
``(B) no early distribution tax shall apply by reason of
such treatment, and
``(C) appropriate adjustments shall be made to subsequent
distributions from the account to reflect such treatment.
``(2) Specified tax deferred account.--For purposes of
paragraph (1), the term `specified tax deferred account'
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).
``(f) Special Rules for Nongrantor Trusts.--
``(1) In general.--In the case of a distribution (directly
or indirectly) of any property from a nongrantor trust to a
covered expatriate--
``(A) the trustee shall deduct and withhold from such
distribution an amount equal to 30 percent of the taxable
portion of the distribution, and
``(B) 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.
[[Page H16778]]
``(2) Taxable portion.--For purposes of this subsection,
the term `taxable portion' 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.
``(3) Nongrantor trust.--For purposes of this subsection,
the term `nongrantor trust' 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.
``(4) Special rules relating to withholding.--For purposes
of this subsection--
``(A) rules similar to the rules of subsection (d)(6) shall
apply, and
``(B) 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 unless the covered expatriate agrees
to such other treatment as the Secretary determines
appropriate.
``(5) Application.--This subsection shall apply to a
nongrantor trust only if the covered expatriate was a
beneficiary of the trust on the day before the expatriation
date.
``(g) Definitions and Special Rules Relating to
Expatriation.--For purposes of this section--
``(1) Covered expatriate.--
``(A) In general.--The term `covered expatriate' means an
expatriate who meets the requirements of subparagraph (A),
(B), or (C) of section 877(a)(2).
``(B) Exceptions.--An individual shall not be treated as
meeting the requirements of subparagraph (A) or (B) of
section 877(a)(2) if--
``(i) the individual--
``(I) 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
``(II) 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
``(ii)(I) the individual's relinquishment of United States
citizenship occurs before such individual attains age 18\1/
2\, and
``(II) 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.
``(C) Covered expatriates also subject to tax as citizens
or residents.--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.
``(2) Expatriate.--The term `expatriate' means--
``(A) any United States citizen who relinquishes his
citizenship, and
``(B) 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)).
``(3) Expatriation date.--The term `expatriation date'
means--
``(A) the date an individual relinquishes United States
citizenship, or
``(B) 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)).
``(4) Relinquishment of citizenship.--A citizen shall be
treated as relinquishing his United States citizenship on the
earliest of--
``(A) 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 Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
``(B) 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 Immigration
and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
``(C) the date the United States Department of State issues
to the individual a certificate of loss of nationality, or
``(D) the date a court of the United States cancels a
naturalized citizen's certificate of naturalization.
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.
``(5) Long-term resident.--The term `long-term resident'
has the meaning given to such term by section 877(e)(2).
``(6) Early distribution tax.--The term `early distribution
tax' 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).
``(h) Other Rules.--
``(1) Termination of deferrals, etc.--In the case of any
covered expatriate, notwithstanding any other provision of
this title--
``(A) 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
``(B) 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.
``(2) Step-up in basis.--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.
``(3) Coordination with section 684.--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.
``(i) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section.''.
(b) Tax on Gifts and Bequests Received by United States
Citizens and Residents From Expatriates.--
(1) In general.--Subtitle B (relating to estate and gift
taxes) is amended by inserting after chapter 14 the following
new chapter:
``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES
``Sec. 2801. Imposition of tax.
``SEC. 2801. IMPOSITION OF TAX.
``(a) In General.--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--
``(1) 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
``(2) the value of such covered gift or bequest.
``(b) Tax To Be Paid by Recipient.--The tax imposed by
subsection (a) on any covered gift or bequest shall be paid
by the person receiving such gift or bequest.
``(c) Exception for Certain Gifts.--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 the dollar amount in effect under section 2503(b) for
such calendar year.
``(d) Tax Reduced by Foreign Gift or Estate Tax.--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.
``(e) Covered Gift or Bequest.--
``(1) In general.--For purposes of this chapter, the term
`covered gift or bequest' means--
``(A) any property acquired by gift directly or indirectly
from an individual who, at the time of such acquisition, is a
covered expatriate, and
``(B) any property acquired directly or indirectly by
reason of the death of an individual who, immediately before
such death, was a covered expatriate.
``(2) Exceptions for transfers otherwise subject to estate
or gift tax.--Such term shall not include--
``(A) any property shown on a timely filed return of tax
imposed by chapter 12 which is a taxable gift by the covered
expatriate, and
``(B) 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.
``(3) Exceptions for transfers to spouse or charity.--Such
term shall not include any property with respect to which a
deduction would be allowed under section 2055, 2056, 2522, or
2523, whichever is appropriate, if the decedent or donor were
a United States person.
``(4) Transfers in trust.--
``(A) Domestic trusts.--In the case of a covered gift or
bequest made to a domestic trust--
``(i) subsection (a) shall apply in the same manner as if
such trust were a United States citizen, and
``(ii) the tax imposed by subsection (a) on such gift or
bequest shall be paid by such trust.
``(B) Foreign trusts.--
``(i) In general.--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.
``(ii) Deduction for tax paid by recipient.--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.
``(iii) Election to be treated as domestic trust.--Solely
for purposes of this section, a
[[Page H16779]]
foreign trust may elect to be treated as a domestic trust.
Such an election may be revoked with the consent of the
Secretary.
``(f) Covered Expatriate.--For purposes of this section,
the term `covered expatriate' has the meaning given to such
term by section 877A(g)(1).''.
(2) Clerical amendment.--The table of chapters for subtitle
B is amended by inserting after the item relating to chapter
14 the following new item:
``Chapter 15. Gifts and Bequests From Expatriates.''.
(c) Definition of Termination of United States
Citizenship.--
(1) In general.--Section 7701(a) is amended by adding at
the end the following new paragraph:
``(50) Termination of united states citizenship.--
``(A) In general.--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).
``(B) Dual citizens.--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.''.
(2) Conforming amendments.--
(A) Paragraph (1) of section 877(e) is amended to read as
follows:
``(1) In general.--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.''.
(B) Paragraph (6) of section 7701(b) is amended by adding
at the end the following flush sentence:
``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.''.
(C) Section 7701 is amended by striking subsection (n) and
by redesignating subsections (o) and (p) as subsections (n)
and (o), respectively.
(d) Information Returns.--Section 6039G is amended--
(1) by inserting ``or 877A'' after ``section 877(b)'' in
subsection (a), and
(2) by inserting ``or 877A'' after ``section 877(a)'' in
subsection (d).
(e) Clerical Amendment.--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:
``Sec. 877A. Tax responsibilities of expatriation.''.
(f) Effective Date.--
(1) In general.--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.
(2) Gifts and bequests.--Chapter 15 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 from transferors whose expatriation
date is on or after such date of enactment.
TITLE IV--TAX TECHNICAL CORRECTIONS
SEC. 401. SHORT TITLE.
This title may be cited as the ``Tax Technical Corrections
Act of 2007''.
SEC. 402. AMENDMENT RELATED TO THE TAX RELIEF AND HEALTH CARE
ACT OF 2006.
(a) Amendment Related to Section 402 of Division A of the
Act.--Subparagraph (A) of section 53(e)(2) is amended to read
as follows:
``(A) In general.--The term `AMT refundable credit amount'
means, with respect to any taxable year, the amount (not in
excess of the long-term unused minimum tax credit for such
taxable year) equal to the greater of--
``(i) $5,000,
``(ii) 20 percent of the long-term unused minimum tax
credit for such taxable year, or
``(iii) the amount (if any) of the AMT refundable credit
amount determined under this paragraph for the taxpayer's
preceding taxable year (as determined before any reduction
under subparagraph (B)).''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the provision of the Tax
Relief and Health Care Act of 2006 to which it relates.
SEC. 403. AMENDMENTS RELATED TO TITLE XII OF THE PENSION
PROTECTION ACT OF 2006.
(a) Amendment Related to Section 1201 of the Act.--
Subparagraph (D) of section 408(d)(8) is amended by striking
``all amounts distributed from all individual retirement
plans were treated as 1 contract under paragraph (2)(A) for
purposes of determining the inclusion of such distribution
under section 72'' and inserting ``all amounts in all
individual retirement plans of the individual were
distributed during such taxable year and all such plans were
treated as 1 contract for purposes of determining under
section 72 the aggregate amount which would have been so
includible''.
(b) Amendment Related to Section 1203 of the Act.--
Subsection (d) of section 1366 is amended by adding at the
end the following new paragraph:
``(4) Application of limitation on charitable
contributions.--In the case of any charitable contribution of
property to which the second sentence of section 1367(a)(2)
applies, paragraph (1) shall not apply to the extent of the
excess (if any) of--
``(A) the shareholder's pro rata share of such
contribution, over
``(B) the shareholder's pro rata share of the adjusted
basis of such property.''.
(c) Amendment Related to Section 1215 of the Act.--
Subclause (I) of section 170(e)(7)(D)(i) is amended by
striking ``related'' and inserting ``substantial and
related''.
(d) Amendments Related to Section 1218 of the Act.--
(1) Section 2055 is amended by striking subsection (g) and
by redesignating subsection (h) as subsection (g).
(2) Subsection (e) of section 2522 is amended--
(A) by striking paragraphs (2) and (4),
(B) by redesignating paragraph (3) as paragraph (2), and
(C) by adding at the end of paragraph (2), as so
redesignated, the following new subparagraph:
``(C) Initial fractional contribution.--For purposes of
this paragraph, the term `initial fractional contribution'
means, with respect to any donor, the first gift of an
undivided portion of the donor's entire interest in any
tangible personal property for which a deduction is allowed
under subsection (a) or (b).''.
(e) Amendments Related to Section 1219 of the Act.--
(1) Paragraph (2) of section 6695A(a) is amended by
inserting ``a substantial estate or gift tax valuation
understatement (within the meaning of section 6662(g)),''
before ``or a gross valuation misstatement''.
(2) Paragraph (1) of section 6696(d) is amended by striking
``or under section 6695'' and inserting ``, section 6695, or
6695A''.
(f) Amendment Related to Section 1221 of the Act.--
Subparagraph (A) of section 4940(c)(4) is amended to read as
follows:
``(A) There shall not be taken into account any gain or
loss from the sale or other disposition of property to the
extent that such gain or loss is taken into account for
purposes of computing the tax imposed by section 511.''.
(g) Amendment Related to Section 1225 of the Act.--
(1) Subsection (b) of section 6104 is amended--
(A) by striking ``Information'' in the heading, and
(B) by adding at the end the following: ``Any annual return
which is filed under section 6011 by an organization
described in section 501(c)(3) and which relates to any tax
imposed by section 511 (relating to imposition of tax on
unrelated business income of charitable, etc., organizations)
shall be treated for purposes of this subsection in the same
manner as if furnished under section 6033.''.
(2) Clause (ii) of section 6104(d)(1)(A) is amended to read
as follows:
``(ii) any annual return which is filed under section 6011
by an organization described in section 501(c)(3) and which
relates to any tax imposed by section 511 (relating to
imposition of tax on unrelated business income of charitable,
etc., organizations),''.
(3) Paragraph (2) of section 6104(d) is amended by striking
``section 6033'' and inserting ``section 6011 or 6033''.
(h) Amendment Related to Section 1231 of the Act.--
Subsection (b) of section 4962 is amended by striking ``or
D'' and inserting ``D, or G''.
(i) Amendment Related to Section 1242 of the Act.--
(1) Subclause (II) of section 4958(c)(3)(A)(i) is amended
by striking ``paragraph (1), (2), or (4) of section 509(a)''
and inserting ``subparagraph (C)(ii)''.
(2) Clause (ii) of section 4958(c)(3)(C) is amended to read
as follows:
``(ii) Exception.--Such term shall not include--
``(I) any organization described in paragraph (1), (2), or
(4) of section 509(a), and
``(II) any organization which is treated as described in
such paragraph (2) by reason of the last sentence of section
509(a) and which is a supported organization (as defined in
section 509(f)(3)) of the organization to which subparagraph
(A) applies.''.
(j) Effective Date.--The amendments made by this section
shall take effect as if included in the provisions of the
Pension Protection Act of 2006 to which they relate.
SEC. 404. AMENDMENTS RELATED TO THE TAX INCREASE PREVENTION
AND RECONCILIATION ACT OF 2005.
(a) Amendments Related to Section 103 of the Act.--
Paragraph (6) of section 954(c) is amended by redesignating
subparagraph (B) as subparagraph (C) and inserting after
subparagraph (A) the following new subparagraph:
``(B) Exception.--Subparagraph (A) shall not apply in the
case of any interest, rent, or royalty to the extent such
interest, rent, or royalty creates (or increases) a deficit
which under section 952(c) may reduce the subpart F income of
the payor or another controlled foreign corporation.''.
[[Page H16780]]
(b) Amendments Related to Section 202 of the Act.--
(1) Subparagraph (A) of section 355(b)(2) is amended to
read as follows:
``(A) it is engaged in the active conduct of a trade or
business,''.
(2) Paragraph (3) of section 355(b) is amended to read as
follows:
``(3) Special rules for determining active conduct in the
case of affiliated groups.--
``(A) In general.--For purposes of determining whether a
corporation meets the requirements of paragraph (2)(A), all
members of such corporation's separate affiliated group shall
be treated as one corporation.
``(B) Separate affiliated group.--For purposes of this
paragraph, the term `separate affiliated group' means, with
respect to any corporation, the affiliated group which would
be determined under section 1504(a) if such corporation were
the common parent and section 1504(b) did not apply.
``(C) Treatment of trade or business conducted by acquired
member.--If a corporation became a member of a separate
affiliated group as a result of one or more transactions in
which gain or loss was recognized in whole or in part, any
trade or business conducted by such corporation (at the time
that such corporation became such a member) shall be treated
for purposes of paragraph (2) as acquired in a transaction in
which gain or loss was recognized in whole or in part.
``(D) Regulations.--The Secretary shall prescribe such
regulations as are necessary or appropriate to carry out the
purposes of this paragraph, including regulations which
provide for the proper application of subparagraphs (B), (C),
and (D) of paragraph (2), and modify the application of
subsection (a)(3)(B), in connection with the application of
this paragraph.''.
(3) The Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by section 202 of the
Tax Increase Prevention and Reconciliation Act of 2005 and by
section 410 of division A of the Tax Relief and Health Care
Act of 2006 had never been enacted.
(c) Amendment Related to Section 515 of the Act.--
Subsection (f) of section 911 is amended to read as follows:
``(f) Determination of Tax Liability.--
``(1) In general.--If, for any taxable year, any amount is
excluded from gross income of a taxpayer under subsection
(a), then, notwithstanding sections 1 and 55--
``(A) if such taxpayer has taxable income for such taxable
year, the tax imposed by section 1 for such taxable year
shall be equal to the excess (if any) of--
``(i) the tax which would be imposed by section 1 for such
taxable year if the taxpayer's taxable income were increased
by the amount excluded under subsection (a) for such taxable
year, over
``(ii) the tax which would be imposed by section 1 for such
taxable year if the taxpayer's taxable income were equal to
the amount excluded under subsection (a) for such taxable
year, and
``(B) if such taxpayer has a taxable excess (as defined in
section 55(b)(1)(A)(ii)) for such taxable year, the amount
determined under the first sentence of section 55(b)(1)(A)(i)
for such taxable year shall be equal to the excess (if any)
of--
``(i) the amount which would be determined under such
sentence for such taxable year (subject to the limitation of
section 55(b)(3)) if the taxpayer's taxable excess (as so
defined) were increased by the amount excluded under
subsection (a) for such taxable year, over
``(ii) the amount which would be determined under such
sentence for such taxable year if the taxpayer's taxable
excess (as so defined) were equal to the amount excluded
under subsection (a) for such taxable year.
``(2) Special rules.--
``(A) Regular tax.--In applying section 1(h) for purposes
of determining the tax under paragraph (1)(A)(i) for any
taxable year in which, without regard to this subsection, the
taxpayer's net capital gain exceeds taxable income (hereafter
in this subparagraph referred to as the capital gain
excess)--
``(i) the taxpayer's net capital gain (determined without
regard to section 1(h)(11)) shall be reduced (but not below
zero) by such capital gain excess,
``(ii) the taxpayer's qualified dividend income shall be
reduced by so much of such capital gain excess as exceeds the
taxpayer's net capital gain (determined without regard to
section 1(h)(11) and the reduction under clause (i)), and
``(iii) adjusted net capital gain, unrecaptured section
1250 gain, and 28-percent rate gain shall each be determined
after increasing the amount described in section 1(h)(4)(B)
by such capital gain excess.
``(B) Alternative minimum tax.--In applying section
55(b)(3) for purposes of determining the tax under paragraph
(1)(B)(i) for any taxable year in which, without regard to
this subsection, the taxpayer's net capital gain exceeds the
taxable excess (as defined in section 55(b)(1)(A)(ii))--
``(i) the rules of subparagraph (A) shall apply, except
that such subparagraph shall be applied by substituting `the
taxable excess (as defined in section 55(b)(1)(A)(ii))' for
`taxable income', and
``(ii) the reference in section 55(b)(3)(B) to the excess
described in section 1(h)(1)(B) shall be treated as a
reference to such excess as determined under the rules of
subparagraph (A) for purposes of determining the tax under
paragraph (1)(A)(i).
``(C) Definitions.--Terms used in this paragraph which are
also used in section 1(h) shall have the respective meanings
given such terms by section 1(h), except that in applying
subparagraph (B) the adjustments under part VI of subchapter
A shall be taken into account.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect as if included in the provisions of the Tax Increase
Prevention and Reconciliation Act of 2005 to which they
relate.
(2) Modification of active business definition under
section 355.--
(A) In general.--Except as otherwise provided in this
paragraph, the amendments made by subsection (b) shall apply
to distributions made after May 17, 2006.
(B) Transition rule.--The amendments made by subsection (b)
shall not apply to any distribution pursuant to a transaction
which is--
(i) made pursuant to an agreement which was binding on May
17, 2006, and at all times thereafter,
(ii) described in a ruling request submitted to the
Internal Revenue Service on or before such date, or
(iii) described on or before such date in a public
announcement or in a filing with the Securities and Exchange
Commission.
(C) Election out of transition rule.--Subparagraph (B)
shall not apply if the distributing corporation elects not to
have such subparagraph apply to distributions of such
corporation. Any such election, once made, shall be
irrevocable.
(D) Special rule for certain pre-enactment distributions.--
For purposes of determining the continued qualification under
section 355(b)(2)(A) of the Internal Revenue Code of 1986 of
distributions made on or before May 17, 2006, as a result of
an acquisition, disposition, or other restructuring after
such date, such distribution shall be treated as made on the
date of such acquisition, disposition, or restructuring for
purposes of applying subparagraphs (A) through (C) of this
paragraph. The preceding sentence shall only apply with
respect to the corporation that undertakes such acquisition,
disposition, or other restructuring, and only if such
application results in continued qualification under section
355(b)(2)(A) of such Code.
(3) Amendment related to section 515 of the act.--The
amendment made by subsection (c) shall apply to taxable years
beginning after December 31, 2006.
SEC. 405. AMENDMENTS RELATED TO THE SAFE, ACCOUNTABLE,
FLEXIBLE, EFFICIENT TRANSPORTATION EQUITY ACT:
A LEGACY FOR USERS.
(a) Amendments Related to Section 11113 of the Act.--
(1) Paragraph (3) of section 6427(i) is amended--
(A) by inserting ``or under subsection (e)(2) by any person
with respect to an alternative fuel (as defined in section
6426(d)(2))'' after ``section 6426'' in subparagraph (A),
(B) by inserting ``or (e)(2)'' after ``subsection (e)(1)''
in subparagraphs (A)(i) and (B), and
(C) by striking ``alcohol fuel and biodiesel mixture
credit'' and inserting ``mixture credits and the alternative
fuel credit'' in the heading thereof.
(2) Subparagraph (F) of section 6426(d)(2) is amended by
striking ``hydrocarbons'' and inserting ``fuel''.
(3) Section 6426 is amended by adding at the end the
following new subsection:
``(h) Denial of Double Benefit.--No credit shall be
determined under subsection (d) or (e) with respect to any
fuel with respect to which credit may be determined under
subsection (b) or (c) or under section 40 or 40A.''.
(b) Effective Date.--The amendments made by this section
shall take effect as if included in the provisions of the
SAFETEA-LU to which they relate.
SEC. 406. AMENDMENTS RELATED TO THE ENERGY POLICY ACT OF
2005.
(a) Amendment Related to Section 1306 of the Act.--
Paragraph (2) of section 45J(b) is amended to read as
follows:
``(2) Amount of national limitation.--The aggregate amount
of national megawatt capacity limitation allocated by the
Secretary under paragraph (3) shall not exceed 6,000
megawatts.''.
(b) Amendments Related to Section 1342 of the Act.--
(1) So much of subsection (b) of section 30C as precedes
paragraph (1) thereof is amended to read as follows:
``(b) Limitation.--The credit allowed under subsection (a)
with respect to all qualified alternative fuel vehicle
refueling property placed in service by the taxpayer during
the taxable year at a location shall not
exceed--''.
(2) Subsection (c) of section 30C is amended to read as
follows:
``(c) Qualified Alternative Fuel Vehicle Refueling
Property.--For purposes of this section, the term `qualified
alternative fuel vehicle refueling property' has the same
meaning as the term `qualified clean-fuel vehicle refueling
property' would have under section 179A if--
``(1) 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
``(2) only the following were treated as clean-burning
fuels for purposes of section 179A(d):
[[Page H16781]]
``(A) 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.
``(B) Any mixture--
``(i) which consists of two or more of the following:
biodiesel (as defined in section 40A(d)(1)), diesel fuel (as
defined in section 4083(a)(3)), or kerosene, and
``(ii) at least 20 percent of the volume of which consists
of biodiesel (as so defined) determined without regard to any
kerosene in such mixture.''.
(c) Amendments Related to Section 1351 of the Act.--
(1) Paragraph (3) of section 41(a) is amended by inserting
``for energy research'' before the period at the end.
(2) Paragraph (6) of section 41(f) is amended by adding at
the end the following new subparagraph:
``(E) Energy research.--The term `energy research' does not
include any research which is not qualified research.''.
(d) Amendments Related to Section 1362 of the Act.--
(1)(A) Paragraph (1) of section 4041(d) is amended by
adding at the end the following new sentence: ``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.''.
(B) Paragraph (3) of section 4042(b) is amended to read as
follows:
``(3) Exception for fuel on which leaking underground
storage tank trust fund financing rate separately imposed.--
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.''.
(C) 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.
(2)(A) Paragraph (5) of section 4041(d) is amended--
(i) by striking ``(other than with respect to any sale for
export under paragraph (3) thereof)'', and
(ii) by adding at the end the following new sentence: ``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.''.
(B) Section 4082 is amended--
(i) by striking ``(other than such tax at the Leaking
Underground Storage Tank Trust Fund financing rate imposed in
all cases other than for export)'' in subsection (a), and
(ii) by redesignating subsections (f) and (g) as
subsections (g) and (h), respectively, and by inserting after
subsection (e) the following new subsection:
``(f) Exception for Leaking Underground Storage Tank Trust
Fund Financing Rate.--
``(1) In general.--Subsection (a) shall not apply to the
tax imposed under section 4081 at the Leaking Underground
Storage Tank Trust Fund financing rate.
``(2) Exception for export, etc.--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.''.
(C) Subsection (e) of section 4082 is amended--
(i) by striking ``an aircraft, the rate of tax under
section 4081(a)(2)(A)(iii) shall be zero.'' and inserting
``an aircraft--
``(1) the rate of tax under section 4081(a)(2)(A)(iii)
shall be zero, and
``(2) 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.''; and
(ii) by moving the last sentence flush with the margin of
such subsection (following the paragraph (2) added by clause
(i)).
(D) Section 6430 is amended to read as follows:
``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND
STORAGE TANK TRUST FUND FINANCING RATE.
``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--
``(1) which are exempt from tax under section 4081(a) by
reason of section 4082(f)(2),
``(2) which are exempt from tax under section 4041(d) by
reason of the last sentence of paragraph (5) thereof, or
``(3) with respect to which the rate increase under section
4081(a)(2)(B) is zero by reason of section 4082(e)(2).''.
(3) Paragraph (5) of section 4041(d) is amended by
inserting ``(b)(1)(A),'' after ``subsections''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect as if included in the provisions of the Energy Policy
Act of 2005 to which they relate.
(2) Nonapplication of exemption for off-highway business
use.--The amendment made by subsection (d)(3) shall apply to
fuel sold for use or used after the date of the enactment of
this Act.
(3) Amendment made by the safetea-lu.--The amendment made
by subsection (d)(2)(C)(ii) shall take effect as if included
in section 11161 of the SAFETEA-LU.
SEC. 407. AMENDMENTS RELATED TO THE AMERICAN JOBS CREATION
ACT OF 2004.
(a) Amendments Related to Section 339 of the Act.--
(1)(A) Section 45H is amended by striking subsection (d)
and by redesignating subsections (e), (f), and (g) as
subsections (d), (e), and (f), respectively.
(B) Subsection (d) of section 280C is amended to read as
follows:
``(d) Credit for Low Sulfur Diesel Fuel Production.--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).''.
(C) Subsection (a) of section 1016 is amended by striking
paragraph (31) and by redesignating paragraphs (32) through
(37) as paragraphs (31) through (36), respectively.
(2)(A) Section 45H, as amended by paragraph (1), is amended
by adding at the end the following new subsection:
``(g) Election to Not Take Credit.--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.''.
(B) Subsection (m) of section 6501 is amended by inserting
``45H(g),'' after ``45C(d)(4),''.
(3)(A) 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 ``qualified capital costs'' and
inserting ``qualified costs''.
(B) The heading of paragraph (2) of section 45H(c) is
amended by striking ``capital''.
(C) Subsection (a) of section 179B is amended by inserting
``and which are properly chargeable to capital account''
before the period at the end.
(b) Amendments Related to Section 710 of the Act.--
(1) Clause (ii) of section 45(c)(3)(A) is amended by
striking ``which is segregated from other waste materials
and''.
(2) Subparagraph (B) of section 45(d)(2) is amended by
inserting ``and'' at the end of clause (i), by striking
clause (ii), and by redesignating clause (iii) as clause
(ii).
(c) Amendments Related to Section 848 of the Act.--
(1) Paragraph (2) of section 470(c) is amended to read as
follows:
``(2) Tax-exempt use property.--
``(A) In general.--The term `tax-exempt use property' has
the meaning given to such term by section 168(h), except that
such section shall be applied--
``(i) without regard to paragraphs (1)(C) and (3) thereof,
and
``(ii) as if section 197 intangible property (as defined in
section 197), and property described in paragraph (1)(B) or
(2) of section 167(f), were tangible property.
``(B) Exception for partnerships.--Such term shall not
include any property which would (but for this subparagraph)
be tax-exempt use property solely by reason of section
168(h)(6).
``(C) Cross reference.--For treatment of partnerships as
leases to which section 168(h) applies, see section
7701(e).''.
(2) Subparagraph (A) of section 470(d)(1) is amended by
striking ``(at any time during the lease term)'' and
inserting ``(at all times during the lease term)''.
(d) Amendments Related to Section 888 of the Act.--
(1) Subparagraph (A) of section 1092(a)(2) is amended by
striking ``and'' at the end of clause (ii), by redesignating
clause (iii) as clause (iv), and by inserting after clause
(ii) the following new clause:
``(iii) if the application of clause (ii) does not result
in an increase in the basis of any offsetting position in the
identified straddle, the basis of each of the offsetting
positions in the identified straddle shall be increased in a
manner which--
``(I) is reasonable, consistent with the purposes of this
paragraph, and consistently applied by the taxpayer, and
``(II) results in an aggregate increase in the basis of
such offsetting positions which is equal to the loss
described in clause (ii), and''.
(2)(A) Subparagraph (B) of section 1092(a)(2) is amended by
adding at the end the following flush sentence:
``A straddle shall be treated as clearly identified for
purposes of clause (i) only if such identification includes
an identification of the positions in the straddle which are
offsetting with respect other positions in the straddle.''.
(B) Subparagraph (A) of section 1092(a)(2) is amended--
(i) by striking ``identified positions'' in clause (i) and
inserting ``positions'',
(ii) by striking ``identified position'' in clause (ii) and
inserting ``position'', and
(iii) by striking ``identified offsetting positions'' in
clause (ii) and inserting ``offsetting positions''.
[[Page H16782]]
(C) Subparagraph (B) of section 1092(a)(3) is amended by
striking ``identified offsetting position'' and inserting
``offsetting position''.
(3) Paragraph (2) of section 1092(a) is amended by
redesignating subparagraph (C) as subparagraph (D) and
inserting after subparagraph (B) the following new
subparagraph:
``(C) Application to liabilities and obligations.--Except
as otherwise provided by the Secretary, rules similar to the
rules of clauses (ii) and (iii) of subparagraph (A) shall
apply for purposes of this paragraph with respect to any
position which is, or has been, a liability or obligation.''.
(4) Subparagraph (D) of section 1092(a)(2), as redesignated
by paragraph (3), is amended by inserting ``the rules for the
application of this section to a position which is or has
been a liability or obligation, methods of loss allocation
which satisfy the requirements of subparagraph (A)(iii),''
before ``and the ordering rules''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect as if included in the provisions of the American Jobs
Creation Act of 2004 to which they relate.
(2) Identification requirement of amendment related to
section 888 of the american jobs creation act of 2004.--The
amendment made by subsection (d)(2)(A) shall apply to
straddles acquired after the date of the enactment of this
Act.
SEC. 408. AMENDMENTS RELATED TO THE ECONOMIC GROWTH AND TAX
RELIEF RECONCILIATION ACT OF 2001.
(a) Amendments Related to Section 617 of the Act.--
(1) Subclause (II) of section 402(g)(7)(A)(ii) is amended
by striking ``for prior taxable years'' and inserting
``permitted for prior taxable years by reason of this
paragraph''.
(2) Subparagraph (A) of section 3121(v)(1) is amended by
inserting ``or consisting of designated Roth contributions
(as defined in section 402A(c))'' before the comma at the
end.
(b) Effective Date.--The amendments made by this section
shall take effect as if included in the provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 to
which they relate.
SEC. 409. AMENDMENTS RELATED TO THE TAX RELIEF EXTENSION ACT
OF 1999.
(a) Amendment Related to Section 507 of the Act.--Clause
(i) of section 45(e)(7)(A) is amended by striking ``placed in
service by the taxpayer'' and inserting ``originally placed
in service''.
(b) Amendment Related to Section 542 of the Act.--Clause
(ii) of section 856(d)(9)(D) is amended to read as follows:
``(ii) Lodging facility.--The term `lodging facility' means
a--
``(I) hotel,
``(II) motel, or
``(III) other establishment more than one-half of the
dwelling units in which are used on a transient basis.''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the provisions of the Tax
Relief Extension Act of 1999 to which they relate.
SEC. 410. AMENDMENT RELATED TO THE INTERNAL REVENUE SERVICE
RESTRUCTURING AND REFORM ACT OF 1998.
(a) Amendment Related to Section 3509 of the Act.--
Paragraph (3) of section 6110(i) is amended by inserting
``and related background file documents'' after ``Chief
Counsel advice'' in the matter preceding subparagraph (A).
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the provision of the
Internal Revenue Service Restructuring and Reform Act of 1998
to which it relates.
SEC. 411. CLERICAL CORRECTIONS.
(a) In General.--
(1) Paragraph (5) of section 21(e) is amended by striking
``section 152(e)(3)(A)'' in the flush matter after
subparagraph (B) and inserting ``section 152(e)(4)(A)''.
(2) Paragraph (3) of section 25C(c) is amended by striking
``section 3280'' and inserting ``part 3280''.
(3) Paragraph (2) of section 26(b) is amended by
redesignating subparagraphs (S) and (T) as subparagraphs (U)
and (V), respectively, and by inserting after subparagraph
(R) the following new subparagraphs:
``(S) sections 106(e)(3)(A)(ii), 223(b)(8)(B)(i)(II), and
408(d)(9)(D)(i)(II) (relating to certain failures to maintain
high deductible health plan coverage),
``(T) section 170(o)(3)(B) (relating to recapture of
certain deductions for fractional gifts),''.
(4) Subsection (a) of section 34 is amended--
(A) in paragraph (1), by striking ``with respect to
gasoline used during the taxable year on a farm for farming
purposes'',
(B) in paragraph (2), by striking ``with respect to
gasoline used during the taxable year (A) otherwise than as a
fuel in a highway vehicle or (B) in vehicles while engaged in
furnishing certain public passenger land transportation
service'', and
(C) in paragraph (3), by striking ``with respect to fuels
used for nontaxable purposes or resold during the taxable
year''.
(5) Paragraph (2) of section 35(d) is amended--
(A) by striking ``paragraph (2) or (4) of'', and
(B) by striking ``(within the meaning of section
152(e)(1))'' and inserting ``(as defined in section
152(e)(4)(A))''.
(6) Subsection (b) of section 38 is amended--
(A) by striking ``and'' each place it appears at the end of
any paragraph,
(B) by striking ``plus'' each place it appears at the end
of any paragraph, and
(C) by inserting ``plus'' at the end of paragraph (30).
(7) Paragraphs (2) and (3) of section 45L(c) are each
amended by striking ``section 3280'' and inserting ``part
3280''.
(8) Subsection (c) of section 48 is amended by striking
``subsection'' in the text preceding paragraph (1) and
inserting ``section''.
(9) Paragraphs (1)(B) and (2)(B) of section 48(c) are each
amended by striking ``paragraph (1)'' and inserting
``subsection (a)''.
(10) Clause (ii) of section 48A(d)(4)(B) is amended by
striking ``subsection'' both places it appears.
(11) The last sentence of section 125(b)(2) is amended by
striking ``last sentence'' and inserting ``second sentence''.
(12) Subclause (II) of section 167(g)(8)(C)(ii) is amended
by striking ``section 263A(j)(2)'' and inserting ``section
263A(i)(2)''.
(13)(A) Clause (vii) of section 170(b)(1)(A) is amended by
striking ``subparagraph (E)'' and inserting ``subparagraph
(F)''.
(B) Clause (ii) of section 170(e)(1)(B) is amended by
striking ``subsection (b)(1)(E)'' and inserting ``subsection
(b)(1)(F)''.
(C) Clause (i) of section 1400S(a)(2)(A) is amended by
striking ``subparagraph (F)'' and inserting ``subparagraph
(G)''.
(D) Subparagraph (A) of section 4942(i)(1) is amended by
striking ``section 170(b)(1)(E)(ii)'' and inserting ``section
170(b)(1)(F)(ii)''.
(14) Subclause (II) of section 170(e)(1)(B)(i) is amended
by inserting ``, but without regard to clause (ii) thereof''
after ``paragraph (7)(C)''.
(15)(A) Subparagraph (A) of section 170(o)(1) and
subparagraph (A) of section 2522(e)(1) are each amended by
striking ``all interest in the property is'' and inserting
``all interests in the property are''.
(B) Section 170(o)(3)(A)(i), and section 2522(e)(2)(A)(i)
(as redesignated by section 403(d)(2)), are each amended--
(i) by striking ``interest'' and inserting ``interests'',
and
(ii) by striking ``before'' and inserting ``on or before''.
(16)(A) Subparagraph (C) of section 852(b)(4) is amended to
read as follows:
``(C) Determination of holding periods.--For purposes of
this paragraph, in determining the period for which the
taxpayer has held any share of stock--
``(i) the rules of paragraphs (3) and (4) of section 246(c)
shall apply, and
``(ii) there shall not be taken into account any day which
is more than 6 months after the date on which such share
becomes ex-dividend.''.
(B) Subparagraph (B) of section 857(b)(8) is amended to
read as follows:
``(B) Determination of holding periods.--For purposes of
this paragraph, in determining the period for which the
taxpayer has held any share of stock or beneficial interest--
``(i) the rules of paragraphs (3) and (4) of section 246(c)
shall apply, and
``(ii) there shall not be taken into account any day which
is more than 6 months after the date on which such share or
interest becomes ex-dividend.''.
(17) Paragraph (2) of section 856(l) is amended by striking
the last sentence and inserting the following: ``For purposes
of subparagraph (B), securities described in subsection
(m)(2)(A) shall not be taken into account.''.
(18) Subparagraph (F) of section 954(c)(1) is amended to
read as follows:
``(F) Income from notional principal contracts.--
``(i) In general.--Net income from notional principal
contracts.
``(ii) Coordination with other categories of foreign
personal holding company income.--Any item of income, gain,
deduction, or loss from a notional principal contract entered
into for purposes of hedging any item described in any
preceding subparagraph shall not be taken into account for
purposes of this subparagraph but shall be taken into account
under such other subparagraph.''.
(19) Paragraph (1) of section 954(c) is amended by
redesignating subparagraph (I) as subparagraph (H).
(20) Paragraph (33) of section 1016(a), as redesignated by
section 407(a)(1)(C), is amended by striking ``section
25C(e)'' and inserting ``section 25C(f)''.
(21) Paragraph (36) of section 1016(a), as redesignated by
section 407(a)(1)(C), is amended by striking ``section
30C(f)'' and inserting ``section 30C(e)(1)''.
(22) Subparagraph (G) of section 1260(c)(2) is amended by
adding ``and'' at the end.
(23)(A) Section 1297 is amended by striking subsection (d)
and by redesignating subsections (e) and (f) as subsections
(d) and (e), respectively.
(B) Subparagraph (G) of section 1260(c)(2) is amended by
striking ``subsection (e)'' and inserting ``subsection (d)''.
(C) Subparagraph (B) of section 1298(a)(2) is amended by
striking ``Section 1297(e)'' and inserting ``Section
1297(d)''.
(24) Paragraph (1) of section 1362(f) is amended--
(A) by striking ``, section 1361(b)(3)(B)(ii), or section
1361(c)(1)(A)(ii)'' and inserting ``or section
1361(b)(3)(B)(ii)'', and
[[Page H16783]]
(B) by striking ``, section 1361(b)(3)(C), or section
1361(c)(1)(D)(iii)'' in subparagraph (B) and inserting ``or
section 1361(b)(3)(C)''.
(25) Paragraph (2) of section 1400O is amended by striking
``under of'' and inserting ``under''.
(26) The table of sections for part II of subchapter Y of
chapter 1 is amended by adding at the end the following new
item:
``Sec. 1400T. Special rules for mortgage revenue bonds.''.
(27) Subsection (b) of section 4082 is amended to read as
follows:
``(b) Nontaxable Use.--For purposes of this section, the
term `nontaxable use' means--
``(1) any use which is exempt from the tax imposed by
section 4041(a)(1) other than by reason of a prior imposition
of tax,
``(2) any use in a train, and
``(3) any use described in section 4041(a)(1)(C)(iii)(II).
The term `nontaxable use' does not include the use of
kerosene in an aircraft and such term shall not include any
use described in section 6421(e)(2)(C).''.
(28) Paragraph (4) of section 4101(a) (relating to
registration in event of change of ownership) is redesignated
as paragraph (5).
(29) Paragraph (6) of section 4965(c) is amended by
striking ``section 4457(e)(1)(A)'' and inserting ``section
457(e)(1)(A)''.
(30) Subpart C of part II of subchapter A of chapter 51 is
amended by redesignating section 5432 (relating to
recordkeeping by wholesale dealers) as section 5121.
(31) Paragraph (2) of section 5732(c), as redesignated by
section 11125(b)(20)(A) of the SAFETEA-LU, is amended by
striking ``this subpart'' and inserting ``this subchapter''.
(32) Subsection (b) of section 6046 is amended--
(A) by striking ``subsection (a)(1)'' and inserting
``subsection (a)(1)(A)'', and
(B) by striking ``paragraph (2) or (3) of subsection (a)''
and inserting ``subparagraph (B) or (C) of subsection
(a)(1)''.
(33)(A) Subparagraph (A) of section 6103(b)(5) is amended
by striking ``the Canal Zone,''.
(B) Section 7651 is amended by striking paragraph (4) and
by redesignating paragraph (5) as paragraph (4).
(34) Subparagraph (A) of section 6211(b)(4) is amended by
striking ``and 34'' and inserting ``34, and 35''.
(35) Subparagraphs (A) and (B) of section 6230(a)(3) are
each amended by striking ``section 6013(e)'' and inserting
``section 6015''.
(36) Paragraph (3) of section 6427(e) (relating to
termination), as added by section 11113 of the SAFETEA-LU, is
redesignated as paragraph (5) and moved after paragraph (4).
(37) Clause (ii) of section 6427(l)(4)(A) is amended by
striking ``section 4081(a)(2)(iii)'' and inserting ``section
4081(a)(2)(A)(iii)''.
(38)(A) Section 6427, as amended by section 1343(b)(1) of
the Energy Policy Act of 2005, is amended by striking
subsection (p) (relating to gasohol used in noncommercial
aviation) and redesignating subsection (q) as subsection (p).
(B) The Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by paragraph (2) of
section 11151(a) of the SAFETEA-LU had never been enacted.
(39) Subsection (a) of section 6695A is amended by striking
``then such person'' in paragraph (2) and inserting the
following:
``then such person''.
(40) Subparagraph (C) of section 6707A(e)(2) is amended by
striking ``section 6662A(e)(2)(C)'' and inserting ``section
6662A(e)(2)(B)''.
(41)(A) Paragraph (3) of section 9002 is amended by
striking ``section 309(a)(1)'' and inserting ``section
306(a)(1)''.
(B) Paragraph (1) of section 9004(a) is amended by striking
``section 320(b)(1)(B)'' and inserting ``section
315(b)(1)(B)''.
(C) Paragraph (3) of section 9032 is amended by striking
``section 309(a)(1)'' and inserting ``section 306(a)(1)''.
(D) Subsection (b) of section 9034 is amended by striking
``section 320(b)(1)(A)'' and inserting ``section
315(b)(1)(A)''.
(42) Section 9006 is amended by striking ``Comptroller
General'' each place it appears and inserting ``Commission''.
(43) Subsection (c) of section 9503 is amended by
redesignating paragraph (7) (relating to transfers from the
trust fund for certain aviation fuels taxes) as paragraph
(6).
(44) Paragraph (1) of section 1301(g) of the Energy Policy
Act of 2005 is amended by striking ``shall take effect of the
date of the enactment'' and inserting ``shall take effect on
the date of the enactment''.
(45) The Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by section 1(a) of
Public Law 109-433 had never been enacted.
(b) Clerical Amendments Related to the Tax Relief and
Health Care Act of 2006.--
(1) Amendment related to section 209 of division a of the
act.--Paragraph (3) of section 168(l) is amended by striking
``enzymatic''.
(2) Amendments related to section 419 of division a of the
act.--
(A) Clause (iv) of section 6724(d)(1)(B) is amended by
inserting ``or (h)(1)'' after ``section 6050H(a)''.
(B) Subparagraph (K) of section 6724(d)(2) is amended by
inserting ``or (h)(2)'' after ``section 6050H(d)''.
(3) Effective date.--The amendments made by this subsection
shall take effect as if included in the provision of the Tax
Relief and Health Care Act of 2006 to which they relate.
(c) Clerical Amendments Related to the Gulf Opportunity
Zone Act of 2005.--
(1) Amendments related to section 402 of the act.--
Subparagraph (B) of section 24(d)(1) is amended--
(A) by striking ``the excess (if any) of'' in the matter
preceding clause (i) and inserting ``the greater of'', and
(B) by striking ``section'' in clause (ii)(II) and
inserting ``section 32''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the
Gulf Opportunity Zone Act of 2005 to which they relate.
(d) Clerical Amendments Related to the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for
Users.--
(1) Amendments related to section 11163 of the act.--
Subparagraph (C) of section 6416(a)(4) is amended--
(A) by striking ``ultimate vendor'' and all that follows
through ``has certified'' and inserting ``ultimate vendor or
credit card issuer has certified'', and
(B) by striking ``all ultimate purchasers of the vendor''
and all that follows through ``are certified'' and inserting
``all ultimate purchasers of the vendor or credit card issuer
are certified''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the
Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users to which they relate.
(e) Clerical Amendments Related to the Energy Policy Act of
2005.--
(1) Amendment related to section 1344 of the act.--
Subparagraph (B) of section 6427(e)(5), as redesignated by
subsection (a)(36), is amended by striking ``2006'' and
inserting ``2008''.
(2) Amendments related to section 1351 of the act.--
Subparagraphs (A)(ii) and (B)(ii) of section 41(f)(1) are
each amended by striking ``qualified research expenses and
basic research payments'' and inserting ``qualified research
expenses, basic research payments, and amounts paid or
incurred to energy research consortiums,''.
(3) Effective date.--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.
(f) Clerical Amendments Related to the American Jobs
Creation Act of 2004.--
(1) Amendment related to section 301 of the act.--Section
9502 is amended by striking subsection (e) and redesignating
subsection (f) as subsection (e).
(2) Amendment related to section 413 of the act.--
Subsection (b) of section 1298 is amended by striking
paragraph (7) and by redesignating paragraphs (8) and (9) as
paragraphs (7) and (8), respectively.
(3) Amendment related to section 895 of the act.--Clause
(iv) of section 904(f)(3)(D) is amended by striking ``a
controlled group'' and inserting ``an affiliated group''.
(4) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the
American Jobs Creation Act of 2004 to which they relate.
(g) Clerical Amendments Related to the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000.--
(1) Subclause (I) of section 56(g)(4)(C)(ii) is amended by
striking ``921'' and inserting ``921 (as in effect before its
repeal by the FSC Repeal and Extraterritorial Income
Exclusion Act of 2000)''.
(2) Clause (iv) of section 54(g)(4)(C) is amended by
striking ``a cooperative described in section 927(a)(4)'' and
inserting ``an organization to which part I of subchapter T
(relating to tax treatment of cooperatives) applies which is
engaged in the marketing of agricultural or horticultural
products''.
(3) Paragraph (4) of section 245(c) is amended by adding at
the end the following new subparagraph:
``(C) FSC.--The term `FSC' has the meaning given such term
by section 922.''.
(4) Subsection (c) of section 245 is amended by inserting
at the end the following new paragraph:
``(5) References to prior law.--Any reference in this
subsection to section 922, 923, or 927 shall be treated as a
reference to such section as in effect before its repeal by
the FSC Repeal and Extraterritorial Income Exclusion Act of
2000.''.
(5) Paragraph (4) of section 275(a) is amended by striking
``if'' and all that follows and inserting ``if the taxpayer
chooses to take to any extent the benefits of section 901.''.
(6)(A) Subsection (a) of section 291 is amended by striking
paragraph (4) and by redesignating paragraph (5) as paragraph
(4).
(B) Paragraph (1) of section 291(c) is amended by striking
``subsection (a)(5)'' and inserting ``subsection (a)(4)''.
(7)(A) Paragraph (4) of section 441(b) is amended by
striking ``FSC or''.
(B) Subsection (h) of section 441 is amended--
(i) by striking ``FSC or'' each place it appears, and
(ii) by striking ``FSC's and'' in the heading thereof.
(8) Subparagraph (B) of section 884(d)(2) is amended by
inserting before the comma ``(as in effect before their
repeal by the FSC Repeal and Extraterritorial Income
Exclusion Act of 2000)''.
(9) Section 901 is amended by striking subsection (h).
[[Page H16784]]
(10) Clause (v) of section 904(d)(2)(B) is amended--
(A) by inserting ``and'' at the end of subclause (I), by
striking subclause (II), and by redesignating subclause (III)
as subclause (II),
(B) by striking ``a FSC (or a former FSC)'' in subclause
(II) (as so redesignated) and inserting ``a former FSC (as
defined in section 922)'', and
(C) by adding at the end the following:
``Any reference in subclause (II) to section 922, 923, or 927
shall be treated as a reference to such section as in effect
before its repeal by the FSC Repeal and Extraterritorial
Income Exclusion Act of 2000.''.
(11) Subsection (b) of section 906 is amended by striking
paragraph (5) and redesignating paragraphs (6) and (7) as
paragraphs (5) and (6), respectively.
(12) Subparagraph (B) of section 936(f)(2) is amended by
striking ``FSC or''.
(13) Section 951 is amended by striking subsection (c) and
by redesignating subsection (d) as subsection (c).
(14) Subsection (b) of section 952 is amended by striking
the second sentence.
(15)(A) Paragraph (2) of section 956(c) is amended--
(i) by striking subparagraph (I) and by redesignating
subparagraphs (J) through (M) as subparagraphs (I) through
(L), respectively, and
(ii) by striking ``subparagraphs (J), (K), and (L)'' in the
flush sentence at the end and inserting ``subparagraphs (I),
(J), and (K)''.
(B) Clause (ii) of section 954(c)(2)(C) is amended by
striking ``section 956(c)(2)(J)'' and inserting ``section
956(c)(2)(I)''.
(16) Paragraph (1) of section 992(a) is amended by striking
subparagraph (E), by inserting ``and'' at the end of
subparagraph (C), and by striking ``, and'' at the end of
subparagraph (D) and inserting a period.
(17) Paragraph (5) of section 1248(d) is amended--
(A) by inserting ``(as defined in section 922)'' after ``a
FSC'', and
(B) by adding at the end the following new sentence: ``Any
reference in this paragraph to section 922, 923, or 927 shall
be treated as a reference to such section as in effect before
its repeal by the FSC Repeal and Extraterritorial Income
Exclusion Act of 2000.''.
(18) Subparagraph (D) of section 1297(b)(2) is amended by
striking ``foreign trade income of a FSC or''.
(19)(A) Paragraph (1) of section 6011(c) is amended by
striking ``or former DISC or a FSC or former FSC'' and
inserting ``, former DISC, or former FSC (as defined in
section 922 as in effect before its repeal by the FSC Repeal
and Extraterritorial Income Exclusion Act of 2000)''.
(B) Subsection (c) of section 6011 is amended by striking
``and FSC's'' in the heading thereof.
(20) Subsection (c) of section 6072 is amended by striking
``a FSC or former FSC'' and inserting ``a former FSC (as
defined in section 922 as in effect before its repeal by the
FSC Repeal and Extraterritorial Income Exclusion Act of
2000)''.
(21) Section 6686 is amended by inserting ``FORMER'' before
``FSC'' in the heading thereof.
TITLE V--PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH
BENEFITS
SEC. 501. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL
HEALTH BENEFITS.
(a) Amendment to the Internal Revenue Code of 1986.--
Section 9812(f)(3) of the Internal Revenue Code of 1986 is
amended by striking ``2007'' and inserting ``2008''.
(b) Amendment to the Employee Retirement Income Security
Act of 1974.--Section 712(f) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended
by striking ``2007'' and inserting ``2008''.
(c) Amendment to the Public Health Service Act.--Section
2705(f) of the Public Health Service Act (42 U.S.C. 300gg-
5(f)) is amended by striking ``2007'' and inserting ``2008''.
(d) Effective Date.--The amendments made by this section
shall apply to benefits for services furnished after December
31, 2007.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Connecticut (Mr. Larson) and the gentleman from New York (Mr. Reynolds)
each will control 20 minutes.
The Chair recognizes the gentleman from Connecticut.
Mr. LARSON of Connecticut. Mr. Speaker, I yield myself such time as I
may consume.
I want to thank Mr. Rangel, Mr. Neal and Mr. McCrery, and since this
was a bipartisan effort, all the hard work that went into this on both
sides of the aisle. This legislation comes at a time when most of us
are preparing to head home for the Christmas holidays.
Mr. Speaker, I can't tell you how our hearts all go out to those men
and women who serve in our military who have sacrificed so much on our
behalf. It is getting more and more difficult for many Americans to
make ends meet. Why shouldn't we be doing everything we possibly can to
make it easier on our military, our veterans, our first responders and
their families? We should be making it easier, as this bill does, for
those earning combat pay to qualify for an earned income tax credit. We
should make it easier for veterans to get housing, disability
assistance, and other benefits. This bill makes it easier for the
spouses of fallen soldiers to draw from a loved one's retirement
savings without penalty. And it makes tax breaks from State and local
governments to volunteer first responders Federal income-tax free.
It wasn't lost on Chairman Rangel, Chairman Neal or the entire Ways
and Means Committee, as I said previously, that with respect to the
events that took place on September 11, it wasn't the military, the
FBI, the CIA, the INS that responded at the World Trade Center, at the
Pentagon, or in the fields of Pennsylvania. It was first responders.
Therefore, Mr. Speaker, it is so vitally important that this
legislation pass so that we provide an opportunity for those first
responders who are so in need of the very rudiments that our government
provides them in order to provide the great depth of service covering
over 70 percent of the country in terms of the service they provide for
this Nation to make sure that what little incremental benefits they get
from their municipality, their county, or their State are not taxed by
the IRS.
So I am proud to be part of this legislation that we move forward.
And with that I reserve my time.
Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
(Mr. REYNOLDS asked and was given permission to revise and extend his
remarks.)
Mr. REYNOLDS. Mr. Speaker, as my colleague, the gentleman from
Connecticut, has outlined a number of provisions in this bill, we come
together today not as Democrats or Republicans, but as Americans. We
are united in our respect for those who wear the uniform of the United
States Armed Forces, and we are united in our desire to ensure that
Federal programs within the Ways and Means Committee's jurisdiction
from the Tax Code to the SSI program work effectively for members of
the military, veterans, first responders and their families.
Let me begin by also thanking Chairman Rangel and Ranking Member
McCrery, as well as Chairman Neal, Chairman McDermott, and Ranking
Members English and Weller, for their outstanding leadership in
crafting this legislation. This bill is a great example of what we can
accomplish when we put our differences aside and work together. I am
hopeful that the revisions we are making to this legislation today will
be taken up in short order by the other body.
I would also like to highlight two specific provisions in the bill
that have been of particular interest to me during my time in Congress.
The first provision, section 202, is modeled on legislation, the Blind
Veterans Fairness Act, that I first introduced in the year 2000. My
legislation would correct a problem in the Federal SSI rules and
affects blind veterans in four States, New York, New Jersey,
Pennsylvania and Massachusetts, that provide these veterans modest
annuities in recognition of the substantial sacrifice they have made to
serving our country.
{time} 1630
Regrettably, under current Federal law, these State annuities
actually reduce any SSI payments for which blind veterans would
otherwise be eligible. As we heard from Michelle LaRock of our New York
City's Division of Veterans Affairs at our Ways and Means hearing in
October, this quirk in the Federal SSI rules creates a hardship not
only for the affected veterans themselves, but for the States that
administer these annuity programs as well. As in years past, the bill I
introduced in the 110th Congress, H.R. 649, has enjoyed bipartisan
support.
Let me turn briefly to a separate provision, section 107 of the bill,
which will permanently allow penalty-free withdrawals from IRAs,
401(k)s, and other retirement funds for Reservists and National
Guardsmen called to active duty. As we all know, when Guardsmen and
Reservists are called up from our States, they often face significant
reductions in pay compared to their civilian salaries, put an economic
strain on their families. To lessen this economic hardship, many of
them
[[Page H16785]]
choose to draw down on their retirement funds.
Unfortunately, under prior law, they faced a 10 percent ``early
withdrawal tax'' when they did so, and they faced restrictions on
making repayments to their retirement funds upon returning from active
duty. Last year's Pension Protection Act provided relief from this 10
percent penalty tax and permitted unlimited repayments within 2 years
after leaving active duty, but only for Guardsmen and Reservists called
to active duty before December 31, 2007.
To ensure that this important relief remains available on a permanent
basis going forward, I introduced H.R. 867, the Guardsmen and
Reservists' Tax Fairness Act on February 7 of this year. This
legislation has also attracted a bipartisan group of cosponsors, as
well as endorsements from several leading veterans service
organizations.
Mr. Speaker, we recently got a great reminder of the time-sensitivity
of this particular provision from the area I represent in Western New
York. Just days ago, it was announced that 100 members of the 107th Air
Refueling Wing, stationed at Niagara Falls Air Reserve Station, will be
deployed to the Middle East in January as part of the global war on
terror. Unless this tax benefit is made permanent, these brave men and
women, and countless more just like them across the country, will lose
their eligibility simply because the calendar has flipped to 2008
before their date of deployment.
I sincerely hope that our colleagues on the other side of the Capitol
will recognize the urgency of this issue and ensure that the provision
is sent to the President's desk before adjourning for the year.
With that, Mr. Speaker, I reserve the balance of my time.
Mr. LARSON of Connecticut. Mr. Speaker, at this time I yield 2
minutes to a senior member of the Ways and Means Committee, Mr.
McDermott, from Washington State.
Mr. McDERMOTT. Thank you, Mr. Larson.
Mr. Speaker, I would like to highlight the importance of two
provisions in the bill before us, which relate to how the Supplemental
Security Income program, or SSI program, treats military families and
others who desire to serve this Nation. Under current law, some
military families lose part of their SSI benefits because a portion of
their compensation is counted as unearned income. Under current rules,
the amount of unearned income a disabled person receives reduces their
SSI benefits. H.R. 3997 would stop treating military families this way,
which occurs because of a kink in the law.
A similar inequity occurs with respect to AmeriCorps volunteers. For
purposes of determining SSI benefits, current law provides disparate
treatment to volunteers who are disabled. In some cases, these would-be
volunteers would experience a loss or reduction of their SSI benefits
if they choose to serve their community, despite their disability,
through AmeriCorps. This only occurs because of an oversight in the
statute, and the HEART Act corrects it, removing an important barrier
to service.
In short, Mr. Speaker, it's important that the bill that the
President signs includes these provisions. With the SSI corrections
included, H.R. 3997 says to American families that a Nation blessed by
your service and sacrifice is one that will treat you fairly and
justly.
Mr. REYNOLDS. Mr. Speaker, I yield 2 minutes to the gentleman from
California, Mr. Herger, a very senior member of the Committee on Ways
and Means.
Mr. HERGER. Mr. Speaker, an important provision of the HEART Act
would help veterans in my home State achieve the American Dream of
homeownership. In our pursuit of this provision, I join with my
California colleague, Susan Davis, to introduce a stand-alone
legislation on this issue, and I thank her for her leadership.
Currently, several States are allowed to issue what are called
Qualified Veteran Mortgage Bonds, which are tax-exempt bonds. In
California, the CalVet Home Loan Program uses the proceeds from these
bonds to help pay for low-cost mortgages for our Nation's heroes
returning from war. For our State and Texas, however, until this
provision today, only veterans who ended their military service before
1977 were allowed to receive these low-cost home loans using proceeds
from qualified veterans mortgage bonds. Now all veterans, regardless of
when they serve, will be eligible under the QVMB-financed program.
Governor Arnold Schwarzenegger and his administration deserve credit
for their unwavering support of this change.
This provision has been several years in coming. I am very pleased to
say that it will help many recent California servicemen and women
purchase their own home, regardless of when they served.
Mr. LARSON of Connecticut. Mr. Speaker, at this time I yield 2
minutes to the gentleman from North Dakota (Mr. Pomeroy) who brought
with us to the committee compelling testimony from Victoria Johnson.
Mr. POMEROY. I thank the gentleman for yielding.
I hold this picture of Major Alan Johnson and his wife Victoria and
their daughter Megan. Alan Johnson lost his life last January 26 in
service to our country in Iraq. Major Johnson had served in the
National Guard and the Army Reserve for 26 years. Additionally, he had
a civilian job. He was still in the public sector. He was sergeant of
the Corrections Department of Yakima County in the State of Washington,
shift supervisor, one of the largest jails in the State of Washington.
You can imagine how awful the surprise for Victoria Johnson, deep in
her grief of losing her husband, to learn that his pension in the State
of Washington was treated as though, on the day he left on his
deployment, he quit work. They offered only return of the amounts he
had paid into the pension plan. Now, if he had been an active
Washington State employee, she would have received a lifetime annuity
benefit. But the law didn't provide for that, and her circumstance has
alerted us to a loophole that must be addressed.
Legislation introduced by Congressman Doc Hastings and me, the HEROES
Act, addresses this flaw in our law, a law that presently allows for
reintegration of pension benefits for our returning soldiers. This will
also mean that should they lose their life in service to our country
during their deployment, they are treated as though their life was lost
while a fully employed participant in the pension plan.
This is desperately necessary. Do it because it is right. Do it for
the memory of Major Alan Johnson.
Mr. REYNOLDS. Mr. Speaker, I yield 2 minutes to my good friend, the
gentleman from Texas (Mr. Brady).
Mr. BRADY of Texas. Mr. Speaker, I rise in support of this bill on
the floor today that will provide additional tax relief to our Nation's
veterans, especially those who are seeking to purchase homes.
Among the many important provisions of this bill, it updates current
law to ensure that veterans who have served after 1977 can qualify for
low-interest home loans financed by Qualified Veterans Mortgage Bonds.
It allows veterans who are not first-time homebuyers to also benefit
from this special program.
This bill is important to our home State of Texas. This will enable
the Texas Veterans Land Board, headed by Land Commissioner Jerry
Paterson, to expand its existing low-interest loan program to thousands
of more Texas veterans, helping a new generation of veterans own a
piece of the American Dream.
For all the sacrifice our veterans make to defend our country, it is
only right that we help them upon their return home to America.
I thank Chairman Rangel, Mr. Larson and all of those who have
contributed to this bill, as well as Mr. Reynolds, who has worked so
hard, and Republicans who are supporting this bipartisan bill.
Mr. LARSON of Connecticut. Mr. Speaker, I yield 2 minutes to the
distinguished gentleman from Texas (Mr. Doggett), a member of the
committee.
Mr. DOGGETT. Mr. Speaker, you would think there would be no
disagreement that support for our troops which begins on the
battlefield shouldn't end there, yet some Senate Republicans deleted
from this very legislation an important provision authorizing
eligibility for below-market affordable home loans of up to $325,000
through our Texas Veterans Land
[[Page H16786]]
Board for our Texas veterans. These are the servicemen and women who
served in Iraq and in Afghanistan and over the last 30 years who are
excluded from the current program.
Today we say once more to these Senate obstructionists, stop and
remember that those who fight to keep our homes safe deserve a fighting
chance at homeownership. This bill is truly a way to honor our vets,
not only with our words, but with our deeds; in this case, deeds to a
home. When our vets are willing to pay the ultimate price for our
freedom, we can afford the price of correcting this disparity.
This bill also prevents the expiration of existing group health
insurance guarantees for mental health coverage. While maintaining this
protection is very important, what we really need is prompt approval of
full equity in all health insurance coverage so that mental health
services are not treated differently from physical health services.
Whether it is a broken leg or a broken spirit, folks need affordable
access to professional care that includes treatment for addiction and
depression. I salute our colleagues Congressman Kennedy and Congressman
Ramstad in their bipartisan effort for mental health parity, including
addiction and depression. Let's get it done in 2008.
Approval of today's bill encourages equity, equity in covering
veterans whenever they have served, and at least a little equity in
mental health coverage.
Mr. REYNOLDS. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Kansas (Mr. Moran).
Mr. MORAN of Kansas. I thank the gentleman from New York for yielding
to me.
I, like the gentlemen are from Texas, am here in a state of
disappointment. But mine is the reverse. A provision that was included
in the Senate is not included in the House version of this bill. It is
a piece of legislation that I introduced earlier this session and one
that was offered as an amendment when this bill was considered by the
House Ways and Means Committee, and it failed on a party-line vote.
This provision, as I say, is included in the Senate bill, but it was
removed when it was returned to the House, and it received unanimous
approval by the Senate.
This is a commonsense clarification to the Tax Code to prevent lower
income military personnel from being discriminated against when
applying to live in affordable housing built under the low income
housing tax credit. Our Nation's military families deserve access to
safe, decent, affordable housing, and they should be given a fair
opportunity to qualify for it.
This provision would clarify that members of the military will not
have their military housing allowance counted against them as income
when applying for affordable rental housing. The IRS does not consider
military housing allowance as income, but, unfortunately, the
Department of Housing and Urban Development does. The result is that
some servicemembers, particularly enlisted ones, are considered to earn
too much and are, thus, disqualified from living in affordable housing.
Comparatively low-income civilians will qualify because they are
treated differently by the IRS.
This clarification is needed now more than ever. A number of military
installations across the country are experiencing housing shortages as
a result the 2005 BRAC. For example, Fort Riley, an Army post located
in the State of Kansas, is nearly doubling in size and will see an
influx of nearly 30,000 people. Without access to adequate affordable
housing opportunities, many families stationed at Fort Riley are being
forced to live far away from post.
{time} 1645
The House acted this year to exempt military housing allowance from
income eligibility requirements under Head Start. Unfortunately, this
discrimination persists when military families apply to live in
affordable housing, and enlisted servicemembers and their families
continue to be treated unfairly in communities across the country.
Mr. Speaker, while I support this legislation, I again am here to
object to the exclusion of language that would level the playing field
for our military enlisted men. I have introduced legislation to correct
this issue; and should it not be resolved in this legislation, I urge
my colleagues to join me in supporting H.R. 1481.
Mr. LARSON of Connecticut. At this time, I yield 2 minutes to the
preeminent authority in this Nation on mental health, and someone who
has spoken with great passion and dignity on this floor as a cosponsor,
along with Mr. Ramstad, of important legislation, Mr. Kennedy from
Rhode Island, for 2 minutes.
Mr. KENNEDY. I thank the gentleman from Connecticut for his great
work and for his very kind words. And I would like to thank Chairman
Rangel and Chairman Stark for their work to pass a 1-year extension to
the current mental health parity law. I would also like to thank them
for their tireless work and dedication to passing H.R. 1424, the Paul
Wellstone Mental Health and Addiction Equity Act.
While I am pleased that the current law is being extended in this
bill which will ensure that annual and lifetime limits for mental
health benefits cannot be more restrictive than physical health
benefits, I must express my disappointment that a stronger mental
health parity law which includes equitable treatment limits, financial
limits, and out-of-network parity has not been passed yet and signed by
the President this year. After three hearings, five markups in the
House, and with 273 bipartisan cosponsors, this bill has been closely
scrutinized by both political parties.
I hope we will return early next year and pass this bill, not as a
political victory for some, but for people like Katie Kevlock, a 16-
year-old girl from Pennsylvania who lost her battle to addiction. She
showed up one day to her mother and said she was addicted, confessed to
her mother she was addicted. Her mother took her to the hospital. The
hospital said she needed insurance coverage. She went to her insurance
system. Her insurer said they couldn't cover her unless she had OD'ed.
They couldn't give her residential treatment unless she OD'ed. So she
had to wait until she OD'ed. But what happened? As Katie's mom said,
not everyone survives that first OD. And it was in the case of Katie,
her first OD killed her. Katie died without the treatment that she
needed to overcome her addiction. That should not happen in this
country. We need to pass parity, and that is why we need to pass 1424.
Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
Mr. LARSON of Connecticut. Mr. Speaker, I would like to recognize the
preeminent authority on smart growth in this country, Mr. Blumenauer
from Oregon, who cares deeply about veterans concerns in that State and
all across the country, for 2 minutes.
Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentleman's courtesy as
I appreciate his leadership.
One of the most important things the United States did in the
aftermath of World War II was to help returning veterans with housing.
In my home State of Oregon, in 1945 we established a veterans home loan
program which, for over 60 years, has provided over a third of a
million loans, a value that is approaching $8 billion, which has
changed the lives of the veterans and their families as it has helped
revitalize communities.
Unfortunately, in Oregon, as in other States like Alaska, Wisconsin,
California, and Texas, we are bumping up against limits in dealing with
this program. We do not have the bonding capacity to be able to deal
with the flood of returning veterans from Iraq and Afghanistan, who are
every bit as worthy of our help and support as veterans from Korea or
World War II.
The House legislation that went forward corrected this situation,
adding an increase in the bond cap; and it made a modification for
eligible veterans of more recent wars to be included. Unfortunately,
the other body, inexplicably, following rules that Daniel Webster and
John C. Calhoun would recognize today, allowed a minority to strip away
these important provisions.
It is important for us to repass this legislation that affirms that
we are going to do right by veterans in Alaska, Oregon, Wisconsin,
California and Texas, raise those limits, and extend the coverage to
warriors that are returning from these conflicts.
I strongly urge my colleagues to not just pass this legislation but
to make clear to our friends in the other body
[[Page H16787]]
that this is one of our go-home items of legislation that we are going
to insist upon.
Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
Mr. LARSON of Connecticut. Mr. Speaker, might I inquire how much time
we have left.
The SPEAKER pro tempore. The gentleman from Connecticut has 8
minutes; the gentleman from New York controls 9 minutes.
Mr. LARSON of Connecticut. Mr. Speaker, I would like to refer Members
to the ``Technical Explanation of the Tax Technical Correction Act of
2007,'' JCX-119-07, prepared by the nonpartisan Joint Committee on
Taxation, for a description of the legislative intent behind the
technical corrections contained in title IV of this bill, H. Res. 884.
Mr. Speaker, at this time I recognize one of the leaders in this body
and part of the Firefighter Caucus, the gentleman from New Jersey, my
dear friend, Mr. Pascrell, for 2 minutes.
Mr. PASCRELL. Mr. Speaker, I would like to reiterate the words of the
gentleman from New York. This bill is a significant reminder of why we
are here. Beyond the acrimony of the last few weeks, this bill goes to
the center of what we should be all about. I commend the gentleman from
New York.
With this bill, we take up a tax measure that is not geared towards
increasing the fortunes of the already fortunate, but instead we
provide a measure of relief for those brave men and women serving in
the military and as first responders.
I am glad to see that this bill excludes from income certain
reimbursable expenses incurred in the line of duty by volunteer
firefighters. And I commend my friend, John Larson, who has worked on
this issue for some time now. I am truly heartened that we are
permanently extending combat pay in the calculations of the earned
income tax credit.
Recent law allowed members of the Armed Forces to include combat pay,
which is generally nontaxable for purposes of computing their earned
income credit. But this will only last through the 2006 tax year. Many
of us have worked for some time to make this proposal permanent. I am
tremendously pleased that this provision has been made.
There is no reason a member of the Armed Forces should lose their
earned income tax credit when they are mobilized to serve this country.
This is unacceptable. I want to thank Chairman Rangel for all his work
and diligence on this critical issue. And I want to say, Mr. Speaker, I
hope we have many more bills like this between now and the time we take
off, because it is important to indicate to the American people that we
can cross party lines.
Mr. REYNOLDS. Mr. Speaker, I certainly agree with the gentleman from
New Jersey, our distinguished member from Ways and Means. This is a
bipartisan piece of legislation. As both the manager of the bill, Mr.
Larson of Connecticut, has outlined and as I have outlined, as we share
strong support and we put Democrat and Republican views aside, and
represented clearly what is best for America as we deal with our
veterans and as we deal with our firefighters. And so both sides of the
aisle today join strongly in a clear message of support of this
legislation as it comes again before the House and goes to the other
body, in hopes that the other body will see fit to support the type of
legislation that is coming with such bipartisan support of not only the
Ways and Means Committee but through what I believe will be the entire
House.
I reserve the balance of my time.
Mr. LARSON of Connecticut. Mr. Speaker, at this time I recognize the
gentlelady from San Diego, California, Susan Davis, for 1 minute.
Mrs. DAVIS of California. I thank my colleague.
Mr. Speaker, on November 6, we passed the Heroes Earnings Assistance
and Relief Tax Act, and today we reaffirm our commitment to those who
volunteer to protect the United States by putting forward a final
product that reflects our commitment to veterans and servicemembers. I
want to thank the hard work of the House Ways and Means Committee and
the Senate Finance Committee for the hard act.
My colleagues have highlighted a number of provisions. I wanted to
just do two. One provision adjusts how the Social Security
Administration calculates income for SSI eligibility to help military
families keep their SSI benefits.
I really want to thank a number of my families in my district in San
Diego who shared their stories with me and gave me this opportunity to
help make a change in this legislation. And the second I believe has
already been mentioned, and that removes a date of service requirement,
preventing those returning from Iraq and Afghanistan to fully take
advantage of the federally supported Qualified Veterans Mortgage Bond
program. This legislation, I believe, Mr. Speaker, demonstrates our
Nation's appreciation for our military families and veterans, and I
encourage my colleagues to vote for it.
Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
Mr. LARSON of Connecticut. At this time, Mr. Speaker, I recognize the
distinguished gentleman from California (Mr. Farr) for 1 minute.
Mr. FARR. Mr. Speaker, I thank the gentleman for yielding. Mr.
Speaker, I rise today in strong support of this legislation, the Heroes
Earnings Assistance and Tax Relief Act of 2007.
This holiday season, Congress can provide tax relief to members of
our military, our veterans, our volunteer firefighters, and to Peace
Corps volunteers through the passage of this legislation. I am pleased
that the committee included in the legislation a section of the bill
that I authored which became section 106 earlier this year, and The
Military Coalition who wrote in support of this language said: ``The
consortium of uniformed services and veterans associations representing
more than 5 million current and former military servicemembers and
their families and survivors is writing in support of your planned
legislation to rectify the longstanding problem encountered by many
disabled veterans when filing for disability compensation with the
Department of Veterans Affairs.''
This bill corrects that, and I am very pleased with it and ask my
colleagues to support the bill.
Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
Mr. LARSON of Connecticut. Mr. Speaker, I recognize the gentlelady
from New York City, Ms. Clarke, for 1\1/2\ minutes.
Ms. CLARKE. I thank the gentleman from Connecticut (Mr. Larson) for
his leadership in this body and the management of this bill.
Mr. Speaker, the extended military deployments in Iraq and
Afghanistan have placed a great economic burden and hardship on many of
our military families. Countless thousands of families are forced to
not only cope with anguish of having a family member serving in harm's
way, but also must deal with the economic hardships. That is why I am
proud that H.R. 3933, a bill that I introduced, has a significant place
in the heart of the HEART Act, which makes permanent three provisions
that bring vital tax relief to help our soldiers and their families.
This bill assures military compensation is excluded from income if it
is earned in the combat zone or while hospitalized for wounds,
diseases, or injuries received in combat, and permits active duty
Reservists to make penalty free withdrawals from retirement plans and
ends the penalties.
I want to thank Mr. Rangel for his consistent leadership on this
issue and for including my bill, H.R. 3933, as part of the HEART Act of
2007. I am just proud to have been able to play a part in paying down
on the debt of gratitude we owe to our women and men that serve and
protect us on the front lines.
Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
General Leave
Mr. LARSON of Connecticut. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days within which to revise and
extend their remarks and include extraneous materials on H.R. 3997, as
amended.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Connecticut?
There was no objection.
Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume
to close debate on our side.
Let me first take a moment again to thank Chairman Rangel and Ranking
Member McCrery for their ongoing
[[Page H16788]]
work on this important bill and for including two specific provisions I
described earlier regarding SSI benefits for blind veterans and
penalty-free withdrawals by National Guardsmen and Reservists.
Even more importantly, I want to thank my chairman and ranking member
for working so hard to cultivate a true spirit of bipartisanship when
we deal with issues where we can find common ground.
{time} 1700
Today on this legislation, which is very important for both Guardsmen
and Reservists and veterans who are serving our country and have served
our country, and for our first responders and our firefighters, today
is one where we have worked hard to take a number of bills and put them
together and make it an opportunity to get results in 2007 that will be
the Heroes Earnings Assistance and Relief Tax Act. I urge a ``yes''
vote.
I yield back the balance of my time.
Mr. LARSON of Connecticut. Mr. Speaker, let me rise and join the
sentiment expressed by the gentleman from New York (Mr. Reynolds), and
I think everybody on our committee, in expressing not only the sheer
joy and delight of having a ranking member and the chairman of the
committee work as closely as they have throughout the year, whether we
agreed or disagreed. It is quite a contrast from previous years. I
think that Mr. Rangel deserves an incredible amount of credit for the
manner in which he has conducted himself, as does Mr. McCrery, as
evident by the concern that has been expressed by both sides as we take
up this important legislation today.
Further, let me add, as has been expressed here by many, we should
make sure that this bill is taken up in the Senate. They have a
responsibility over in that body to make sure that they address the
concerns of so many in our military, as eloquently expressed here today
by so many Members on and off the committee who care deeply about
issues that impact veterans and our volunteer firefighters as well.
I also want to thank the members of the Ways and Means staff, and
especially Eileen Shatz, who is serving for her last week on the Ways
and Means Committee; Janice Mays; John Buckley; Aruna Kalyanam, who has
been here throughout the day; Kase Jubboori; Mildeen Worrell, who have
all done great work on behalf of the committee; Chairman Neal, who also
has been outstanding with this legislation and the hearings that he
conducted in our committee; Melissa Mueller from the subcommittee
staff, who was key. And also from my staff, I want to thank Amy
O'Donnell. We call her the tax missionary. And also John Renfrew and
Jackie Primeau, who have done such an outstanding job.
Mr. RAMSTAD. Mr. Speaker, I rise in strong support of the Defenders
of Freedom Tax Relief Act, which provides important tax relief to the
heroes who are defending our country, both abroad and here at home.
I also appreciate that the bill includes a one-year extension of the
1996 mental health parity law, which prohibits insurers from
discriminating against mental health treatment with aggregate lifetime
or annual dollar limits.
But we must go much further to end insurance discrimination and
expand access to treatment for mental illness and chemical addiction.
We must knock down the barriers of higher copays and deductibles,
limited treatment stays, and the lack of out-of-network benefits that
do not apply to any other disease. We must pass the Paul Wellstone
Mental Health and Addiction Equity Act.
It's a national disgrace that 270,000 Americans were denied addiction
treatment last year. It's a national tragedy that 150,000 of our fellow
Americans died last year from chemical addiction and 30,000 Americans
committed suicide from depression. And it's a national crisis that
untreated addiction and mental illness cost our economy over $550
billion last year.
And think of the costs that can't be measured in dollars and cents--
human suffering, broken families, shattered dreams; ruined careers and
destroyed lives.
Passing mental health parity is not only the right things to do; it's
the cost-effective thing to do. We have all the empirical data to prove
that equity for mental health and addiction treatment will save
billions of dollars nationally while not raising premiums more than
two-tenths of one percent.
This legislation has 273 cosponsors and passed three House committees
with wide bipartisan support. It must absolutely be one of the first
orders of business when Congress reconvenes in January.
It's time to end the discrimination against people who need treatment
for mental illness and addiction. It's time to prohibit health insurers
from placing discriminatory restrictions on treatment. It's time to
provide greater access to treatment. It's time to pass the Paul
Wellstone Mental Health and Addiction Equity Act.
The American people cannot afford to wait any longer for Congress to
act.
Mr. LARSON of Connecticut. Mr. Speaker, I yield back the balance of
my time.
The SPEAKER pro tempore (Mr. Snyder). The question is on the motion
offered by the gentleman from Connecticut (Mr. Larson) that the House
suspend the rules and agree to the resolution, H. Res. 884.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. LARSON of Connecticut. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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