[Congressional Record Volume 153, Number 195 (Wednesday, December 19, 2007)]
[Senate]
[Pages S16018-S16047]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3884. Mr. REID (for Ms. Cantwell (for herself and Ms. Snowe)) 
proposed an amendment to the bill S. 924, to strengthen the United 
States Coast Guard's Integrated Deepwater Program; as follows:

       On page 15, strike the matter between lines 15 and 16 and 
     insert the following:

Sec. 1. Short title; table of contents.
Sec. 2. Procurement structure.
Sec. 3. Alternatives Analysis.
Sec. 4. Certification.
Sec. 5. Contract requirements.
Sec. 6. Improvements in Coast Guard management.
Sec. 7. Department of Defense Consultation.
Sec. 8. Procurement and report requirements.
Sec. 9. GAO review and recommendations.
Sec. 10. Inspector General review of Deepwater program.
Sec. 11. Definitions.
       On page 16, line 2, insert ``more than 90 days'' after 
     ``Program''.
       On page 16, line 9, strike ``Act.'' and insert ``Act, 
     unless otherwise excepted in accordance with the Competition 
     in Contracting Act of 1984 and the Federal Acquisition 
     Regulations.''
       On page 16, line 17, insert ``that is 90 days after the 
     date'' after ``date''.
       On page 16, line 20, insert ``after the date that is 90 
     days after the date of enactment of this Act of, or in 
     support'' after ``procurements''.
       On page 16, strike line 21, and insert the following:

[[Page S16019]]

       ``(i) the HC-130J aircraft, the HH-65 aircraft, and the 
     C4ISR system, and

       On page 16, line 24, insert ``the date that is 90 days 
     after'' after ``as of''.
       On page 17, line 3, strike ``procurement'' and insert 
     ``procurement, or in support,''.
       On page 17, line 6, strike ``analysis of alternatives'' and 
     insert ``alternatives analysis''.
       On page 17, strike lines 8 and 9 and insert the following:
       (i) the procurement is in accordance with the Competition 
     in Contracting Act of 1984 and the Federal Acquisition 
     Regulations;

       On page 17, line 22, strike ``Coast Guard'' and insert 
     ``Commandant''.
       On page 17, line 22, insert ``subparagraph (B) or (C) of'' 
     after ``under''.
       On page 17, line 23, strike ``it'' and insert ``the Coast 
     Guard''.
       On page 17, beginning in line 24, strike ``transmit a 
     report to'' and insert ``notify in writing''.
       On page 18, beginning in line 2, strike ``notifying the 
     Committees''.
       On page 18, beginning in line 3, strike ``explaining the'' 
     and insert ``shall provide a detailed''.
       On page 18, line 12, strike ``entity'' and insert 
     ``subcontractor''.
       On page 18, line 23, strike ``justifications of FAR 6.3 are 
     met.'' and insert ``procurement was awarded in a manner 
     consistent with the Competition in Contracting Act of 1984 
     and the Federal Acquisition Regulations.''.
       On page 18, after line 23, insert the following:
       (d) Rule of Construction.--The limitation in subsection 
     (b)(1)(A) on the quantity and specific type of assets to 
     which subsection (b) applies shall not be construed to apply 
     to the modification of the number or type of any subsystems 
     or other components of a vessel or aircraft described in 
     subsection (b)(1)(B) or (C).
       On page 19, strike line 1 and insert the following:

     SEC. 3. ALTERNATIVES ANALYSIS.

       On page 19, line 5, strike ``FAR'' and insert ``Federal 
     Acquisition Regulations''.
       On page 19, line 6 insert ``of a major asset'' after 
     ``procurement''.
       On page 19, line 7, insert ``after the date of enactment of 
     this Act'' after ``Program''.
       On page 19, line 8, strike ``analysis of alternatives'' and 
     insert ``alternatives analysis''.
       On page 19, beginning in line 12, strike ``analysis of 
     alternatives'' and insert ``alternatives analysis''.
       On page 19, line 14, strike ``an appropriate'' and insert 
     ``a qualified''.
       On page 20, line 1, strike ``analysis of alternatives'' and 
     insert ``alternatives analysis''.
       On page 20, line 15, strike ``and''.
       On page 20, line 17, strike ``costs.'' and insert ``costs; 
     and''
       On page 20 between lines 17 and 18, insert the following:
       (7) a business case of viable alternatives.

       On page 20, line 19, strike ``analysis of alternatives'' 
     and insert ``alternatives analysis''.
       On page 20, line 22, strike ``analysis of alternatives'' 
     and insert ``alternatives analysis''.
       On page 21, between lines 2 and 3, insert the following:
       (e) Experimental, Technically Immature Systems.--
       (1) In general.--No procurement of an experimental or 
     technically immature major asset may be awarded under the 
     Integrated Deepwater Program until an alternatives analysis 
     has been conducted for such asset. The alternatives analysis 
     shall include the same components as those set forth in 
     subsection (c). In addition, the alternatives analysis shall 
     also include--
       (A) an examination of likely research and development costs 
     and the levels of uncertainty associated with such estimated 
     costs;
       (B) an examination of likely production and deployment 
     costs and the levels of uncertainty associated with such 
     estimated costs;
       (C) an examination of likely operating and support costs 
     and the levels of uncertainty associated with such estimated 
     costs;
       (D) if they are likely to be significant, an examination of 
     likely disposal costs and the levels of uncertainty 
     associated with such estimated costs;
       (E) an analysis of the risks to production cost, schedule, 
     and life-cycle cost resulting from the experimental, 
     technically immature nature of the systems under 
     consideration; and
       (F) such additional measures the Commandant determines to 
     be necessary for appropriate evaluation of the asset.
       (2) Report.--As soon as possible after an alternatives 
     analysis pursuant to this subsection has been completed, the 
     Commandant shall transmit a report that provides a detailed 
     summary of the findings of the analysis, a plan for the 
     procurements addressed in the analysis, and the schedule and 
     costs for delivery of such procurements to the Senate 
     Committee on Commerce, Justice, and Transportation and the 
     House of Representatives Committee on Transportation and 
     Infrastructure.

       On page 22, line 7, strike ``deliver'' and insert 
     ``delivery''.
       On page 22, line 21, strike ``Guard--'' and insert ``Guard 
     after the date of enactment of this Act--''.
       On page 23, beginning in line 2, strike ``and any 
     subsequent Government Accountability Office recommendations 
     relevant to the contract terms issued before March 1, 
     2007,''.
       On page 23, between lines 7 and 8, insert the following:
       (2) addresses any subsequent Government Accountability 
     Office recommendations that are issued at least 30 days prior 
     to the execution of the contract, delivery order or task 
     order when such recommendations are relevant to the contract 
     terms;''.
       On page 23, line 8, strike ``(2)'' and insert ``(3)''.
       Beginning with line 13 on page 23, strike through line 9 on 
     page 24 and insert the following:
       (4) does not include--
       (A) provisions that commit the Coast Guard without express 
     written approval by the Coast Guard; or
       (B) any provision allowing for equitable adjustment that 
     differs from the Federal Acquisition Regulations;
       (5) meets the requirements of the Coast Guard Major Systems 
     Acquisition COMDTINST Manual 5000.10(series); and
       (6) for any contract, contract modification, or award term 
     extending the existing Integrated Deepwater Program contract 
     term--
       (A) is reviewed by, and addresses recommendations made by, 
     the Under Secretary of Defense for Acquisition, Technology, 
     and Logistics through the Defense Acquisition University in 
     its Quick Look Study dated February 5, 2007; and
       (B) does not include any minimum requirements for the 
     purchase of a given or determinable number of specific 
     assets.

       On page 26, between lines 5 and 6, insert the following:

     SEC. 7. DEPARTMENT OF DEFENSE CONSULTATION.

       (a) In General.--The Coast Guard shall make arrangements as 
     appropriate with the Department of Defense for support in 
     contracting and management of procurements under the 
     Integrated Deepwater Program. The Coast Guard shall also seek 
     opportunities to leverage off of Department of Defense 
     contracts, and contracts of other appropriate agencies, to 
     obtain the best possible price for Integrated Deepwater 
     Program assets. No later than one year after the date of 
     enactment of this Act, the Commandant of the Coast Guard 
     shall provide a report to the Senate Committee on Commerce, 
     Science, and Transportation and the House of Representatives 
     Committee on Transportation and Infrastructure on agreements 
     and other arrangements concluded pursuant to this subsection.
       (b) Assessment.--Within 180 days after the date of 
     enactment of this Act, the Comptroller General shall transmit 
     a report to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure that--
       (1) contains an assessment of current Coast Guard 
     acquisition and management capabilities to manage 
     procurements under or in support of the Integrated Deepwater 
     Program;
       (2) includes recommendations as to how the Coast Guard can 
     improve its acquisition management, either through internal 
     reforms or by seeking acquisition expertise from the 
     Department of Defense; and
       (3) addresses specifically the question of whether the 
     Coast Guard can better leverage Department of Defense or 
     other agencies' contracts that would meet the needs of the 
     Integrated Deepwater Program in order to obtain the best 
     possible price.

       Beginning with line 6 on page 26, strike through line 18 on 
     page 27, and insert the following:

     SEC. 8. PROCUREMENT AND REPORT REQUIREMENTS.

       (a) Procurement Schedules.--
       (1) Budget justification documents.--Each calendar year, 
     not later than 45 days after the President submits the budget 
     to Congress under section 1105 of title 31, United States 
     Code, the Commandant shall submit to Congress budget 
     justification documents regarding development and procurement 
     schedules for each asset of the Integrated Deepwater Program 
     for which any funds for procurement are requested in that 
     budget.
       (2) Required documents.--The budget justification documents 
     required to be submitted under paragraph (1) for each asset 
     for which funds for procurement are requested in the budget 
     include--
       (A) the development schedule for each asset and asset 
     class, including estimated annual costs until development is 
     completed;
       (B) the procurement schedule for each asset and asset 
     class, including estimated annual costs and units to be 
     procured until procurement is completed;
       (C) any variances in schedule or cost from the schedule and 
     costs described in the plan submitted under section 3(d); and
       (D) a projection of the remaining operational lifespan of 
     each legacy asset and projected costs for sustaining such 
     assets.
       (b) Quarterly Status Update.--The Commandant shall provide 
     an update on the status of the Integrated Deepwater Program 
     to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure at the beginning of the 
     first full fiscal year quarter after the date of enactment of 
     this Act, and at the beginning of each subsequent fiscal year 
     quarter.
       (c) Reporting on Cost Overruns and Delays.--

[[Page S16020]]

       (1) Report required.--The Commandant shall submit a report 
     to the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Transportation and Infrastructure as soon as possible, but 
     not later than 30 days after the Deepwater Program Executive 
     Officer becomes aware of--
       (A) a likely cost overrun greater than 10 percent of the 
     program acquisition unit cost, the procurement unit cost, or 
     the life cycle cost of an individual asset or a class of 
     assets under the Integrated Deepwater Program; or
       (B) a likely delay of more than 6 months in the delivery 
     schedule for any individual asset or class of assets under 
     the Integrated Deepwater Program.
       (2) Required content.--The report shall include--
       (A) a detailed explanation for the variance or delay;
       (B) the current program acquisition unit cost and the 
     complete history of changes to that cost from the schedule 
     and costs described in the plan submitted under section 3(d);
       (C) the current procurement unit cost and the complete 
     history of changes to that cost from the schedule and costs 
     described in the plan submitted under section 3(d); and
       (D) a full life-cycle cost analysis for each asset or class 
     of assets for which a report is being submitted under 
     paragraph (1).
       (3) Substantial variances in costs or schedule.--If a 
     likely cost overrun is greater than 20 percent or a likely 
     delay is greater than 12 months from the schedule and costs 
     described in the plan submitted under section 3(d) or, if the 
     plan has been revised, from the schedule and costs described 
     in the revised plan, the Commandant shall include in the 
     report required under paragraph (1) a written certification, 
     with a supporting explanation, that--
       (A) the asset or asset class is essential to the 
     accomplishment of Coast Guard missions;
       (B) there are no alternatives to such asset or asset class 
     which will provide equal or greater capability in a more 
     cost-effective and timely manner;
       (C) the new estimates of the program acquisition unit cost 
     or procurement unit cost are reasonable; and
       (D) the management structure for the acquisition program is 
     adequate to manage and control program acquisition unit cost 
     or procurement unit cost.
       (4) Certified assets and asset classes.--If the Commandant 
     certifies an asset or asset class under paragraph (3), the 
     requirements of this subsection shall be based on the new 
     estimates of cost and schedule contained in that 
     certification.
       (5) Definitions.--In this subsection:
       (A) Life-cycle cost.--The term ``life-cycle cost'' means 
     all costs for development, procurement, construction, and 
     operations and support for a particular asset, without regard 
     to funding source or management control.
       (B) Procurement unit cost.--The term ``procurement unit 
     cost'' means the amount equal to the total of all funds 
     programmed to be available for obligation for procurement of 
     a given asset class divided by the number of assets to be 
     procured.
       (C) Program acquisition unit cost.--The term ``program 
     acquisition unit cost'' means the amount equal to the total 
     cost for development, procurement, and construction for each 
     class of assets divided by the total number of assets in each 
     class.

       On page 28, between lines 20 and 21, insert the following:
       (e) Report on C4ISR.--Not later than 90 days after the date 
     of enactment of this Act, the Commandant shall submit to the 
     Senate Committee on Commerce, Science, and Transportation and 
     the House of Representatives Committee on Transportation and 
     Infrastructure a report on the manner in which the Coast 
     Guard is resolving the problems and responding to the 
     recommendations contained in the August 2006 Department of 
     Homeland Security Inspector General Report entitled 
     Improvements Needed in the Coast Guard's Acquisition and 
     Implementation of Deepwater Information Technology Systems.
       (f) Amendment of 2006 Act.--Section 408(a) of the Coast 
     Guard and Maritime Transportation Act of 2006 is amended--
       (1) by striking paragraphs (1) and (3); and
       (2) by redesignating paragraphs (2) and (4) through (8) as 
     paragraphs (1) through (6), respectively.

       On page 28, line 21, strike ``SEC. 8.'' and insert ``SEC. 
     9.''.
       On page 28, beginning in line 23, strike ``no later than 
     June 1, 2007''.
       On page 29, beginning in line 4, strike ``issued before 
     March 1, 2007,''.
       On page 29, beginning in line 16, strike ``Act. The 
     Commandant shall report to the Senate Committee on Commerce, 
     Science, and Transportation and the House of Representatives 
     Committee on Transportation and Infrastructure on the Coast 
     Guard's progress in implementing such recommendations.'' and 
     insert ``Act, and implement subsequent recommendations to the 
     maximum extent practicable as they arise.''.
       On page 30, line 9, strike ``SEC. 9.'' and insert ``SEC. 
     10.''.
       On page 31, line 8, strike ``SEC. 10.'' and insert ``SEC. 
     11.''.
                                 ______
                                 
  SA 3885. Mr. REID (for Mr. Kerry) proposed an amendment to the bill 
S. 1784, to amend the Small Business Act to improve programs for 
veterans, and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Military Reservist and 
     Veteran Small Business Reauthorization and Opportunity Act of 
     2007''.

     SEC. 2. TABLE OF CONTENTS.

  The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of Contents.
Sec. 3. Definitions.


                 TITLE I--VETERANS BUSINESS DEVELOPMENT

Sec. 101. Increased funding for the Office of Veterans Business 
              Development.
Sec. 102. Interagency task force.
Sec. 103. Permanent extension of SBA Advisory Committee on Veterans 
              Business Affairs.
Sec. 104. Office of Veterans Business Development.
Sec. 105. Increasing the number of outreach centers.
See. 106. Independent study on gaps in availability of outreach 
              centers.


 TITLE II--NATIONAL RESERVIST ENTERPRISE TRANSITION AND SUSTAINABILITY

Sec. 201. Short title.
Sec. 202. Purpose.
Sec. 203. National Guard and Reserve business assistance.
Sec. 204. Veterans Assistance and Services program.


                     TITLE III--RESERVIST PROGRAMS

Sec. 301. Reservist programs.
Sec. 302. Reservist loans.
Sec. 303. Noncollateralized loans.
Sec. 304. Loan priority.
Sec. 305. Relief from time limitations for veteran-owned small 
              businesses.
Sec. 306. Service-disabled veterans.
Sec. 307. Study on options for promoting positive working relations 
              between employers and their Reserve Component employees.
Sec. 308. Increased Veteran Participation Program.

     SEC. 3. DEFINITIONS.

       In this Act--
       (1) the term ``activated'' means receiving an order placing 
     a Reservist on active duty;
       (2) the term ``active duty'' has the meaning given that 
     term in section 101 of title 10, United States Code;
       (3) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (4) the term ``Reservist'' means a member of a reserve 
     component of the Armed Forces, as described in section 10101 
     of title 10, United States Code;
       (5) the term ``Service Corps of Retired Executives'' means 
     the Service Corps of Retired Executives authorized by section 
     8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1));
       (6) the terms ``service-disabled veteran'' and ``small 
     business concern'' have the meaning as in section 3 of the 
     Small Business Act (15 U.S.C. 632);
       (7) the term ``small business development center'' means a 
     small business development center described in section 21 of 
     the Small Business Act (15 U.S.C. 648); and
       (8) the term ``women's business center'' means a women's 
     business center described in section 29 of the Small Business 
     Act (15 U.S.C. 656).
                 TITLE I--VETERANS BUSINESS DEVELOPMENT

     SEC. 101. INCREASED FUNDING FOR THE OFFICE OF VETERANS 
                   BUSINESS DEVELOPMENT.

       (a) In General.--There are authorized to be appropriated to 
     the Office of Veterans Business Development of the 
     Administration, to remain available until expended--
       (1) $2,100,000 for fiscal year 2008; and
       (2) $2,300,000 for fiscal year 2009.
       (b) Funding Offset.--Amounts necessary to carry out 
     subsection (a) shall be offset and made available through the 
     reduction of the authorization of funding under section 
     20(e)(1)(B)(iv) of the Small Business Act (15 U.S.C. 631 
     note).
       (c) Sense of Congress.--It is the sense of Congress that 
     any amounts provided pursuant to this section that are in 
     excess of amounts provided to the Administration for the 
     Office of Veterans Business Development in fiscal year 2007, 
     should be used to support Veterans Business Outreach Centers.

     SEC. 102. INTERAGENCY TASK FORCE.

       Section 32 of the Small Business Act (15 U.S.C. 657b) is 
     amended--
       (1) by redesignating subsection (c) as (f); and
       (2) by inserting after subsection (b) the following:
       ``(c) Interagency Task Force.--
       ``(1) Establishment.--Not later than 90 days after the date 
     of enactment of this subsection, the President shall 
     establish an interagency task force to coordinate the efforts 
     of Federal agencies necessary to increase capital and 
     business development opportunities for, and increase the 
     award of Federal contracting and subcontracting opportunities 
     to, small business concerns owned and controlled by service-
     disabled veterans and small business concerns owned and 
     controlled by veterans (in this section referred to as the 
     `task force').
       ``(2) Membership.--The members of the task force shall 
     include--
       ``(A) the Administrator, who shall serve as chairperson of 
     the task force;

[[Page S16021]]

       ``(B) a senior level representative from--
       ``(i) the Department of Veterans Affairs;
       ``(ii) the Department of Defense;
       ``(iii) the Administration (in addition to the 
     Administrator);
       ``(iv) the Department of Labor;
       ``(v) ' the Department of the Treasury;
       ``(vi) the General Services Administration; and
       ``(vii) the Office of Management and Budget; and
       ``(C) 4 representatives from a veterans service 
     organization or military organization or association, 
     selected by the President.
       ``(3) Duties.--The task force shall coordinate 
     administrative and regulatory activities and develop 
     proposals relating to
       ``(A) increasing capital access and capacity of small 
     business concerns owned and controlled by service-disabled 
     veterans and small business concerns owned and controlled by 
     veterans through loans, surety bonding, and franchising;
       ``(B) increasing access to Federal con tracting and 
     subcontracting for small business concerns owned and 
     controlled by service-disabled veterans and small business 
     concerns owned and controlled by veterans through expanded 
     mentor-protege assistance and matching such small business 
     concerns with contracting opportunities;
       ``(C) increasing the integrity of certifications of status 
     as a small business concern owned and controlled by service-
     disabled veterans or a small business concern owned and 
     controlled by veterans;
       ``(D) reducing paperwork and administrative burdens on 
     veterans in accessing business development and 
     entrepreneurship opportunities;
       ``(E) increasing and improving training and counseling 
     services provided to small business concerns owned and 
     controlled by veterans; and
       ``(F) making other improvements relating to the support for 
     veterans business development by the Federal Government.
       ``(4) Reporting.--The task force shall submit an annual 
     report regarding its activities and proposals to--
       ``(A) the Committee on Small Business and Entrepreneurship 
     and the Committee on Veterans' Affairs of the Senate; and
       ``(B) the Committee on Small Business and the Committee on 
     Veterans' Affairs of the House of Representatives.''.

     SEC. 103. PERMANENT EXTENSION OF SBA ADVISORY COMMITTEE ON 
                   VETERANS BUSINESS AFFAIRS.

       (a) Assumption of Duties.--Section 33 of the Small Business 
     Act (15 U.S.C. 657c) is amended
       (1) by striping subsection (h); and
       (2) by redesignating subsections (1) through (k) as 
     subsections (h) through (j), respectively.
       (b) Permanent Extension of Authority.--Section 203 of the 
     Veterans Entrepreneurship and Small Business Development Act 
     of 1999 (15 U.S.C. 657b note) is amended by striking 
     subsection (h).

     SEC. 104. OFFICE OF VETERANS BUSINESS DEVELOPMENT.

       Section 32 of the Small Business Act (15 U.S.C. 657b) is 
     amended by inserting after subsection (c) (as added by 
     section 102) the following:
       ``(d) Participation in Tap Workshops.--
       ``(1) In general.--The Associate Administrator shall 
     increase veteran outreach by ensuring that Veteran Business 
     Outreach Centers regularly participate, on a nationwide 
     basis, in the workshops of the Transition Assistance Program 
     of the Department of Labor.
       ``(2) Presentations.--In carrying out paragraph (1), a 
     Veteran Business Outreach Center may provide grants to 
     entities located in Transition Assistance Program locations 
     to make presentations on the opportunities available from the 
     Administration for recently separating or separated veterans. 
     Each presentation under this paragraph shall include, at a 
     mininiuin, a description of the entrepreneurial and business 
     training resources available from the Administration.
       ``(3) Written materials.--The Associate Administrator 
     shall--
       ``(A) create written materials that provide comprehensive 
     information on self-employment and veterans entrepreneurship, 
     including information on resources available from the 
     Administration on such topics; and
       ``(B) make the materials created under subparagraph (A) 
     available to the Secretary of Labor for inclusion in the 
     Transition Assistance Program manual.
       ``(4) Reports.--The Associate Administrator shall submit to 
     Congress progress reports on the implementation of this 
     subsection.
       ``(e) Women Veterans Business Training Resource Program.--
       ``(1) In general.--The Associate Administrator shall 
     establish a Women Veterans Business Training Resource 
     Program.
       ``(2) Activities.--The Associate Administrator shall--
       ``(A) compile information on resources available to women 
     veterans for business training, including resources for--
       ``(i) vocational and technical education;
       ``(ii) general business skills, such as marketing and 
     accounting; and
       ``(iii) business assistance programs targeted to women 
     veterans; and
       ``(B) disseminate the information compiled under 
     subparagraph (A) through Veteran Business Outreach Centers 
     and women's business centers.''.

     SEC. 105. INCREASING THE NUMBER OF OUTREACH CENTERS.

       (a) In General.--The Administrator shall use the authority 
     in section 8(b)(17) of the Small Business Act (15 U.S.C. 
     637(b)(17)) to ensure that the number of Veterans Business 
     Outreach Centers throughout the United States increases--
       (1) subject to subsection (b), by at least 2, for each of 
     fiscal years 2008 and 2009; and
       (2) by the number that the Administrator considers 
     appropriate, based on need, for each fiscal year thereafter.
       (b) Limitation.--Subsection (a)(1) shall apply in a fiscal 
     year if, for that fiscal year, the amount made available for 
     the Office of Veterans Business Development is more than the 
     amount made available for the Office of Veterans Business 
     Development for fiscal year 2007.

     SEC. 106. INDEPENDENT STUDY ON GAPS IN AVAILABILITY OF 
                   OUTREACH CENTERS.

       The Administrator shall sponsor an independent study on 
     gaps in the availability of Veterans Business Outreach 
     Centers across the United States, to inform decisions on 
     funding and on the allocation and coordination of resources. 
     Not later than 6 months after the date of enactment of this 
     Act, the Administrator shall submit to Congress a report on 
     the results of the study.
 TITLE II--NATIONAL RESERVIST ENTERPRISE TRANSITION AND SUSTAINABILITY

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``National Reservist 
     Enterprise Transition and Sustainability Act of 2007''.

     SEC. 202. PURPOSE.

       The purpose of this title is to establish a program to--
       (1) provide managerial, financial, planning, development, 
     technical, and regulatory assistance to small business 
     concerns owned and operated by Reservists;
       (2) provide managerial, financial, planning, development, 
     technical, and regulatory assistance to the temporary heads 
     of small business concerns owned and operated by Reservists;
       (3) create a partnership between the Small Business 
     Administration, the Department of Defense, and the Department 
     of Veterans Affairs to assist small business concerns owned 
     and operated by Reservists;
       (4) utilize the service delivery network of small business 
     development centers, women's business centers, Veterans 
     Business Outreach Centers, and centers receiving funding from 
     the National Veterans Business Development Corporation, and 
     any other veterans small business assistance program which 
     receives Federal funding, to expand the access of small 
     business concerns owned and operated by Reservists to 
     programs providing business management, development, 
     financial, procurement, technical, regulatory, and marketing 
     assistance;
       (5) utilize the service delivery network of small business 
     development centers, women's business centers, Veterans 
     Business Outreach Centers, and centers receiving funding from 
     the National Veterans Business Development Corporation, and 
     any other veterans small business assistance program which 
     receives Federal funding, to quickly respond to an activation 
     of Reservists that own and operate small business concerns; 
     and
       (6) utilize the service delivery network of small business 
     development centers, women's business centers, Veterans 
     Business Outreach Centers, and centers receiving funding from 
     the National Veterans Business Development Corporation, and 
     any other veterans small business assistance program which 
     receives Federal funding, to assist Reservists that own and 
     operate small business concerns in preparing for future 
     military activations.

     SEC. 203. NATIONAL GUARD AND RESERVE BUSINESS ASSISTANCE.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 37 (15 U.S.C. 631 note) as 
     section 38; and
       (2) by inserting after section 36 the following:

     ``SEC. 37. RESERVIST ENTERPRISE TRANSITION AND 
                   SUSTAINABILITY.

       ``(a) In General.--The Administrator shall establish a 
     program to provide business planning assistance to small 
     business concerns owned and operated by Reservists.
       ``(b) Definitions.--In this section--
       ``(1) the terms `activated' and `activation' mean having 
     received an order placing a Reservists on active duty, as 
     defined by section 101(1) of title 10, United States Code;
       ``(2) the term `Administrator' means the Administrator of 
     the Small Business Administration, acting through the 
     Associate Administrator for Small Business Development 
     Centers;
       ``(3) the term `Association' means the association 
     established under section 21(a)(3)(A);
       ``(4) the term `eligible applicant' means--
       ``(A) a small business development center that is 
     accredited under section 21(k);
       ``(B) a women's business center;
       ``(C) a Veterans Business Outreach Center that receives 
     funds from the Office of Veterans Business Development;
       ``(D) an information and assistance center receiving 
     funding from the National Veterans Business Development 
     Corporation under section 33; or
       ``(E) any other veterans small business assistance program 
     which receives Federal funding;
       ``(5) the term `enterprise transition and sustainability 
     assistance' means assistance

[[Page S16022]]

     provided by an eligible applicant to a small business concern 
     owned and operated by a Reservist, who has been activated or 
     is likely to be activated in the next 12 months, to develop 
     and implement a business strategy for the period while the 
     owner is on active duty and 6 months after the date of the 
     return of the owner;
       ``(6) the term `Reservist' means any person who is--
       ``(A) a member of a reserve component of the Armed Forces, 
     as defined by section 10101 of title 10, United States Code; 
     and
       ``(B) on active status, as defined by section 101(d)(4) of 
     title 10, United States Code;
       ``(7) the term `small business development center' means a 
     small business development center as described in section 21 
     of the Small Business Act (15 U.S.C. 648);
       ``(8) the term `State' means each of the several States of 
     the United States, the District of Columbia, the Commonwealth 
     of Puerto Rico, the Virgin Islands, American Samoa, and Guam; 
     and
       ``(9) the term `women's business center' means a women's 
     business center described in section 29 of the Small Business 
     Act (15 U.S.C. 656).
       ``(c) Authority.--The Administrator may award grants, in 
     accordance with the regulations developed under subsection 
     (e), to eligible applicants to assist small business concerns 
     owned and operated by Reservists by--
       ``(1) providing management, development, financing, 
     procurement, technical, regulatory, and marketing assistance;
       ``(2) providing access to information and resources, 
     including Federal and State business assistance programs;
       ``(3) distributing contact information provided by the 
     Department of Defense regarding activated Reservists to 
     corresponding State directors;
       ``(4) offering free, one-on-one, in-depth counseling 
     regarding management, development, financing, procurement, 
     regulations, and marketing;
       ``(5) assisting in developing a long-term plan for possible 
     future activation; and
       ``(6) providing enterprise transition and sustainability 
     assistance.
       ``(d) Other Federal Departments and Agencies.--The 
     Administrator shall make available informational materials 
     relating to veteran business assistance practices developed 
     by eligible entities using grants under this section to other 
     Federal departments and agencies for use in programs operated 
     by such departments and agencies.
       ``(e) Rulemaking.--
       ``(1) In general.--The Administrator, in consultation with 
     the Association and after notice and an opportunity for 
     comment, shall promulgate regulations to carry out this 
     section.
       ``(2) Deadline.--The Administrator shall promulgate final 
     regulations not later than 180 days of the date of enactment 
     of the Military Reservist and Veteran Small Business 
     Reauthorization and Opportunity Act of 2007.
       ``(3) Contents.--The regulations developed by the 
     Administrator under this subsection shall establish--
       ``(A) procedures for identifying, in consultation with the 
     Secretary of Defense, States that have had a recent 
     activation of Reservists;
       ``(B) priorities for the types of assistance to be provided 
     under the program authorized by this section;
       ``(C) standards relating to educational, technical, and 
     support services to be provided by a grantee;
       ``(D) standards relating to any national service delivery 
     and support function to be provided by a grantee;
       ``(E) standards relating to any work plan that the 
     Administrator may require a grantee to develop; and
       ``(F) standards relating to the educational, technical, and 
     professional competency of any expert or other assistance 
     provider to whom a small business concern may be referred for 
     assistance by a grantee.
       ``(f) Application.--
       ``(1) In general.--Each eligible applicant desiring a grant 
     under this section shall submit an application to the 
     Administrator at such time, in such manner, and accompanied 
     by such information as the Administrator may reasonably 
     require.
       ``(2) Contents.--Each application submitted under paragraph 
     (1) shall describe
       ``(A) the activities for which the applicant seeks 
     assistance under this section; and
       ``(B) how the applicant plans to allocate funds within its 
     network.
       ``(g) Award of Grants.--
       ``(1) Deadline.--The Administrator shall award grants not 
     later than 60 days after the promulgation of final rules and 
     regulations under subsection (e).
       ``(2) Amount.--Each eligible applicant awarded a grant 
     under this section shall receive a grant in an amount not 
     greater than $300,000 per fiscal year.
       ``(h) Report.--
       ``(1) In general.--The Comptroller General of the United 
     States shall--
       ``(A) initiate an evaluation of the program not later than 
     30 months after the disbursement of the first grant under 
     this section; and
       ``(B) submit a report not later than 6 months after the 
     initiation of the evaluation under paragraph (1) to--
       ``(1) the Administrator;
       ``(ii) the Committee on Small Business and Entrepreneurship 
     of the Senate; and
       ``(iii) the Committee on Small Business of the House of 
     Representitives.
       ``(2) Contents.--The report under paragraph (1) shall--
       ``(A) address the results of the evaluation conducted under 
     paragraph (1); and
       ``(B) recommend changes to law, if any, that it believes 
     would be necessary or advisable to achieve the goals of this 
     section.
       ``(i) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section--
       ``(A) $5,000,000 for the first fiscal year beginning after 
     the date of enactment of the Military Reservist and Veteran 
     Small Business Reauthorization and Opportunity Act of 2007; 
     and
       ``(B) $5,000,000 for the fiscal year following the fiscal 
     year described in subparagraph (A).
       ``(2) Funding offset.--Amounts necessary to carry out this 
     section shall be offset and made available through the 
     reduction of the authorization of fielding under section 
     20(e)(1)(B)(iv) of the Small Business Act (15 U.S.C. 631 
     note).''.

     SEC. 204. VETERANS ASSISTANCE AND SERVICES PROGRAM.

        Section 21 of the Small Business Act (15 U.S.C. 648) is 
     amended by adding at the end the following:
       ``(n) Veterans Assistance and Services Program.--
       ``(1) In general.--A small business development center may 
     apply for a grant under this subsection to carry out a 
     veterans assistance and services program.
       ``(2) Elements of program.--Under a program carried out 
     with a grant under this subsection, a small business 
     development center shall--
       ``(A) create a marketing campaign to promote awareness and 
     education of the services of the center that are available to 
     veterans, and to target the campaign toward veterans, 
     servicedisabled veterans, military units, Federal agencies, 
     and veterans organizations;
       ``(B) use technology-assisted online counseling and 
     distance learning technology to overcome the impediments to 
     entrepreneurship faced by veterans and members of the Armed 
     Forces; and
       ``(C) increase coordination among organizations that assist 
     veterans, including by establishing virtual integration of 
     service providers and offerings for a one-stop point of 
     contact for veterans who are entrepreneurs or owners of small 
     business concerns.
       ``(3) Amount of grants.--A grant under this subsection 
     shall be for not less than $75,000 and not more than 
     $250,000.
       ``(4) Funding.--Subject to amounts approved in advance in 
     appropriations Acts, the Administration may make grants or 
     enter into cooperative agreements to carry out the provisions 
     of this subsection.''.
                     TITLE III--RESERVIST PROGRAMS

     SEC. 301. RESERVIST PROGRAMS.

       (a) Application Period.--Section 7(b)(3)(C) of the Small 
     Business Act (15 U.S.C. 636(b)(3)(C)) is amended--
       (1) by striking ``90 days'' and inserting ``1 year''; and
       (2) by adding at the end the following: ``The Administrator 
     may, when appropriate (as determined by the Administrator), 
     waive the ending date specified in the preceding sentence and 
     establish a later ending date.''.
       (b) Pre-Consideration Process.--
       (1) Definition.--In this subsection, the term ``eligible 
     Reservist'' means a Reservist who--
       (A) has not been ordered to active duty;
       (B) expects to be ordered to active duty during a period of 
     military conflict; and
       (C) can reasonably demonstrate that the small business 
     concern for which that Reservist is a key employee will 
     suffer economic injury in the absence of that Reservist.
       (2) Establishment.--Not later than 6 months after the date 
     of enactment of this Act, the Administrator shall establish a 
     pre-consideration process, under which the Administrator
       (A) may collect all relevant materials necessary for 
     processing a loan to a small business concern under section 
     7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3)) 
     before an eligible Reservist employed by that small business 
     concern is activated; and
       (B) shall distribute funds for any loan approved under 
     subparagraph (A) if that eligible Reservist is activated.
       (C) Outreach and Technical Assistance Program.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Secretary of Veterans Affairs and the Secretary of 
     Defense, shall develop a comprehensive outreach and technical 
     assistance program (in this subsection referred to as the 
     ``program'') to--
       (A) market the loans available under section 7(b)(3) of the 
     Small Business Act (15 U.S.C. 636(b)(3)) to Reservists, and 
     family members of Reservists, that are on active duty and 
     that are not on active duty; and
       (B) provide technical assistance to a small business 
     concern applying for a loan under that section.
       (2) Components.--The program shall
       (A) incorporate appropriate websites maintained by the 
     Administration, the Department of Veterans Affairs, and the 
     Department of Defense; and
       (B) require that information on the program is made 
     available to small business concerns directly through
       (i) the district offices and resource partners of the 
     Administration, including small business development centers, 
     women's business centers, and the Service Corps of Retired 
     Executives; and
       (ii) other Federal agencies, including the Department of 
     Veterans Affairs and the Department of Defense.

[[Page S16023]]

       (3) Report.--
       (A) In general.--Not later than 6 months after the date of 
     enactment of this Act, and every 6 months thereafter until 
     the date that is 30 months after such date of enactment, the 
     Administrator shall submit to Congress a report on the status 
     of the program.
       (B) Contents.--Each report submitted under subparagraph (A) 
     shall include--
       (i) for the 6-month period ending on the date of that 
     report--
       (I) the number of loans approved under section 7(b)(3) of 
     the Small Business Act (15 U.S.C. 636(b)(3));
       (II) the number of loans disbursed under that section; and
       (III) the total amount disbursed under that section; and
       (ii) recommendations, if any, to make the program more 
     effective in serving small business concerns that employ 
     Reservists.

     SEC. 302. RESERVIST LOANS.

       (a) In General.--Section 7(b)(3)(E) of the Small Business 
     Act (15 U.S.C. 636(b)(3)(E)) is amended by striking 
     ``$1,500,000'' each place such term appears and inserting 
     ``$2,000,000''.
       (b) Loan Information.--
       (1) In general.--The Administrator and the Secretary of 
     Defense shall develop a joint website and printed materials 
     providing information regarding any program for small 
     business concerns that is available to veterans or 
     Reservists.
       (2) Marketing.--The Administrator is authorized--
       (A) to advertise and promote the program under section 
     7(b)(3) of the Small Business Act jointly with the Secretary 
     of Defense and veterans' service organizations; and
       (B) to advertise and promote participation by lenders in 
     such program jointly with trade associations for banks or 
     other lending institutions.

     SEC. 303. NONCOLLATERALIZED LOANS.

       Section 7(b)(3) of the Small Business Act (15 U.S.C. 
     636(b)(3)) is amended by adding at the end the following:
       ``(G)(i) Notwithstanding any other provi sion of law, the 
     Administrator may make a loan under this paragraph of not 
     more than $50,000 without collateral.
       ``(ii) The Administrator may defer payment of principal and 
     interest on a loan described in clause (i) during the longer 
     of--
       ``(I) the 1-year period beginning on the date of the 
     initial disbursement of the loan; and
       ``(II) the period during which the relevant essential 
     employee is on active duty.''.

     SEC. 304. LOAN PRIORITY.

       Section 7(b)(3) of the Small Business Act (15 U.S.C. 
     636(b)(3)), as amended by this Act, is amended by adding at 
     the end the following:
       ``(H) The Administrator shall give priority to any 
     application for a loan under this paragraph and shall process 
     and make a determination regarding such applications prior to 
     processing or making a determination on other loan 
     applications under this subsection, on a rolling basis.''.

     SEC. 305. RELIEF FROM TIME LIMITATIONS FOR VETERAN-OWNED 
                   SMALL BUSINESSES.

       Section 3(q) of the Small Business Act (15 U.S.C. 632(q)) 
     is amended by adding at the end the following:
       ``(5) Relief from time limitations.--
       ``(A) In general.--Any time limitation on any 
     qualification, certification, or period of participation 
     imposed under this Act on any program that is available to 
     small business concerns shall be extended for a small 
     business concern that--
       ``(i) is owned and controlled by--
       ``(I) a veteran who was called or ordered to active duty 
     under a provision of law specified in section 101(a)(13)(B) 
     of title 10, United States Code, on or after September 11, 
     2001; or
       ``(II) a service-disabled veteran who became such a veteran 
     due to an injury or illness incurred or aggravated in the 
     active military, naval, or air service during a period of 
     active duty pursuant to a call or order to active duty under 
     a provision of law referred to in subclause (I) on or after 
     September 11, 2001; and
       ``(ii) was subject to the time limitation during such 
     period of active duty.
       ``(B) Duration.--Upon submission of proper documentation to 
     the Administrator, the extension of a time limitation under 
     subparagraph (A) shall be equal to the period of time that 
     such veteran who owned or controlled such a concern was on 
     active duty as described in that subparagraph.
       ``(C) Exception for programs subject to federal credit 
     reform act of 1990.--The provisions of subparagraphs (A) and 
     (B) shall not apply to any programs subject to the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).''.

     SEC. 306. SERVICE-DISABLED VETERANS.

       Not later than 180 days after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     submit to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a report describing
       (1) the types of assistance needed by service-disabled 
     veterans who wish to become entrepreneurs; and
       (2) any resources that would assist such service-disabled 
     veterans.

     SEC. 307. STUDY ON OPTIONS FOR PROMOTING POSITIVE WORKING 
                   RELATIONS BETWEEN EMPLOYERS AND THEIR RESERVE 
                   COMPONENT EMPLOYEES.

       (a) Study Required.--The Comptroller General of the United 
     States shall conduct a study on options for promoting 
     positive working relations between employers and Reserve 
     component employees of such employers, including assessing 
     options for improving the time in which employers of 
     Reservists are notified of the call or order of such members 
     to active duty other than for training.
       (b) Report.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of tliis Aet, the Comptroller General of the United 
     States shall submit to the appropriate committees of Congress 
     a report on the study conducted under subsection (a).
       (2) Contents.--The report submitted under paragraph (1) 
     shall--
       (A) provide a quantitative and qualitative assessment of--
       (i) what measures, if any, are being taken to inform 
     Reservists of the obligations and responsibilities of such 
     members to their employers;
       (ii) how effective such measures have been; and whether 
     there are additional measures that could be taken to promote 
     positive working relations between Reservists and their 
     employers, including any steps that could be taken to ensure 
     that employers are timely notified of a call to active duty; 
     and
       (B) assess whether there has been a reduction in the hiring 
     of Reservists by business concerns because of--
       (i) any increase in the use of Reservists after September 
     11, 2001; or
       (ii) any change in any policy of the Department of Defense 
     relating to Reservists after September 11, 2001.
       (c) Appropriate Committees of Congress Defined.--In this 
     section, the term ``appropriate committees of Congress'' 
     means--
       (1) the Committee on Armed Services and the Committee on 
     Small Business and Entrepreneurship of the Senate; and
       (2) the Committee on Armed Services and the Committee on 
     Small Business of the House of Representatives.

     SEC. 308. INCREASED VETERAN PARTICIPATION PROGRAM.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended by adding at the end the following:
       ``(32) Increased veteran participation program.--
       ``(A) Definitions.--In this paragraph--
       ``(1) the term `cost' has the meaning given that term in 
     section 502 of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661a);
       ``(ii) the term `pilot program' means the pilot program 
     established under subparagraph (B); and
       ``(iii) the term `veteran participation loan' means a loan 
     made under this subsection to a small business concern owned 
     and controlled by veterans of the Armed Forces or members of 
     the reserve components of the Armed Forces.
       ``(B) Establishment.--The Administrator shall establish and 
     carry out a pilot program under which the Administrator shall 
     reduce the fees for veteran participation loans.
       ``(C) Duration.--The pilot program shall terminate at the 
     end of the second full fiscal year after the date that the 
     Administrator establishes the pilot program.
       ``(D) Maximum participation.--A veteran participation loan 
     shall include the maximum participation levels by the 
     Administrator permitted for loans made under this subsection.
       ``(E) Fees.--
       ``(i) In general.--The fee on a veteran participation loan 
     shall be equal to 50 percent of the fee otherwise applicable 
     to that loan under paragraph (18).
       ``(ii) Waiver.--The Administrator may waive clause (i) for 
     a fiscal year if--
       (I) for the fiscal year before that fiscal year, the annual 
     estimated rate of default of veteran participation loans 
     exceeds that of loans made under this subsection that are not 
     veteran participation loans;
       ``(II) the cost to the Administration of making loans under 
     this subsection is greater than zero and such cost is 
     directly attributable to the cost of making veteran 
     participation loans; and
       ``(III) no additional sources of revenue authority are 
     available to reduce the cost of making loans under this 
     subsection to zero.
       ``(iii) Effect of waiver.--If the Administrator waives the 
     reduction of fees under clause (ii), the Administrator
       ``(I) shall not assess or collect fees in an amount greater 
     than necessary to ensure that the cost of the program under 
     this subsection is not greater than zero; and
       ``(II) shall reinstate the fee reductions under clause (i) 
     when the conditions in clause (ii) no longer apply.
       ``(iv) No increase of fees.--The Administrator shall not 
     increase the fees under paragraph (18) on loans made under 
     this subsection that are not veteran participation loans as a 
     direct result of the pilot program.
       ``(F) GAO Report.--
       ``(i) In general.--Not later than 1 year after the date 
     that the pilot program terminates, the Comptroller General of 
     the United States shall submit to the Committee on Small 
     Business of the House of Representatives and the Committee on 
     Small Business and Entrepreneurship of the Senate a report on 
     the pilot program.
       ``(ii) Contents.--The report submitted under clause (i) 
     shall include--
       ``(I) the number of veteran participation loans for which 
     fees were reduced under the pilot program;
       ``(II) a description of the impact of the pilot program on 
     the program under this subsection;

[[Page S16024]]

       ``(III) an evaluation of the efficacy and potential fraud 
     and abuse of the pilot program; and
       ``(IV) recommendations for improving the pilot program.''.
                                 ______
                                 
  SA 3886. Mr. REID (for Mr. Coburn) proposed an amendment to amendment 
SA 3885 proposed by Mr. Reid (for Mr. Kerry) to the bill S. 1784, to 
amend the Small Business Act to improve programs for veterans, and for 
other purposes; as follows:

       On page 4, line 25, strike ``increase'' and all that 
     follows through ``opportunities to'' on page 5, line 2, and 
     insert ``improve capital and business development 
     opportunities for, and ensure achievement of the pre-
     established Federal contracting goals for''.
       On page 5, line 10, after the semicolon, add ``and''.
       On page 5, line 22, strike ``; and'' and insert a period.
       On page 5, strike lines 23 through 25.
       On page 6, strike line 1 and all that follows through page 
     7, line 16, and insert the following:
       ``(3) Duties.--The task force shall--
       ``(A) consult regularly with veterans service organizations 
     and military organizations in performing the duties of the 
     task force; and
       ``(B) coordinate administrative and regulatory activities 
     and develop proposals relating to--
       ``(i) improving capital access and capacity of small 
     business concerns owned and controlled by service-disabled 
     veterans and small business concerns owned and controlled by 
     veterans through loans, surety bonding, and franchising;
       ``(ii) ensuring achievement of the pre-established Federal 
     contracting goals for small business concerns owned and 
     controlled by service-disabled veterans and small business 
     concerns owned and controlled by veterans through expanded 
     mentor-protege assistance and matching such small business 
     concerns with contracting opportunities;
       ``(iii) increasing the integrity of certifications of 
     status as a small business concern owned and controlled by 
     service-disabled veterans or a small business concern owned 
     and controlled by veterans;
       ``(iv) reducing paperwork and administrative burdens on 
     veterans in accessing business development and 
     entrepreneurship opportunities;
       ``(v) increasing and improving training and counseling 
     services provided to small business concerns owned and 
     controlled by veterans; and
       ``(vi) making other improvements relating to the support 
     for veterans business development by the Federal Government.
       On page 9, strike line 13 and all that follows through page 
     10, line 8, and insert the following:
       ``(e) Women Veterans Business Training.--The Associate 
     Administrator shall--
       ``(1) compile information on existing resources available 
     to women veterans for business training, including resources 
     for--
       ``(A) vocational and technical education;
       ``(B) general business skills, such as marketing and 
     accounting; and
       ``(C) business assistance programs targeted to women 
     veterans; and
       ``(2) disseminate the information compiled under paragraph 
     (1) through Veteran Business Outreach Centers and women's 
     business centers.''.
       On page 11, strike line 10 and all that follows through 
     page 20, line 23, and insert the following:

     SEC. 201. VETERANS ASSISTANCE AND SERVICES PROGRAM.

       On page 22, between lines 10 and 11, insert the following:

     SEC. 202. DISASTER LOANS.

       Section 7(b)(3) of the Small Business Act (15 U.S.C. 
     636(b)(3)) is amended--
       (1) in subparagraph (E), by striking ``unless'' and all 
     that follows and inserting a period; and
       (2) by inserting after subparagraph (I), the following:
       ``(J) There shall be reasonable assurance that a loan 
     recipient under this paragraph can repay the loan of personal 
     or business cash flow.''.
       On page 22, line 21, strike ``waive'' and all that follows 
     through ``date'' on line 23 and insert ``extend the ending 
     date specified in the preceding sentence by not more than 1 
     year''.
       On page 24, line 4, strike ``shall'' and insert ``may''.
       On page 32, between lines 9 and 10, insert the following:
       (d) Additional Study.--Not later than 180 days after the 
     date of enactment of this Act, the Office of Advocacy of the 
     Administration shall submit to Congress a report describing--
       (1) the barriers in place arising from Federal regulations 
     for veterans who wish to become entrepreneurs;
       (2) the barriers in place arising from the tax code for 
     veterans who wish to become entrepreneurs; and
       (3) any recommendations for how best to eliminate those 
     barriers to better assist current or prospective veteran 
     small business owners.
                                 ______
                                 
  SA 3887. Mr. SCHUMER (for Mr. Leahy (for himself and Mr. Schumer)) 
proposed an amendment to the bill H.R. 2640, to improve the National 
Instant Criminal Background Check System, and for other purposes; as 
follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Tile.--This Act may be cited as the ``NICS 
     Improvement Amendments Act of 2007''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.

                    TITLE I--TRANSMITTAL OF RECORDS

Sec. 101. Enhancement of requirement that Federal departments and 
              agencies provide relevant information to the National 
              Instant Criminal Background Check System.
Sec. 102. Requirements to obtain waiver.
Sec. 103. Implementation assistance to States.
Sec. 104. Penalties for noncompliance.
Sec. 105. Relief from disabilities program required as condition for 
              participation in grant programs.
Sec. 106. Illegal immigrant gun purchase notification.

 TITLE II--FOCUSING FEDERAL ASSISTANCE ON THE IMPROVEMENT OF RELEVANT 
                                RECORDS

Sec. 201. Continuing evaluations.

    TITLE III--GRANTS TO STATE COURT SYSTEMS FOR THE IMPROVEMENT IN 
           AUTOMATION AND TRANSMITTAL OF DISPOSITION RECORDS

Sec. 301. Disposition records automation and transmittal improvement 
              grants.

                          TITLE IV--GAO AUDIT

Sec. 401. GAO audit.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Approximately 916,000 individuals were prohibited from 
     purchasing a firearm for failing a background check between 
     November 30, 1998, (the date the National Instant Criminal 
     Background Check System (NICS) began operating) and December 
     31, 2004.
       (2) From November 30, 1998, through December 31, 2004, 
     nearly 49,000,000 Brady background checks were processed 
     through NICS.
       (3) Although most Brady background checks are processed 
     through NICS in seconds, many background checks are delayed 
     if the Federal Bureau of Investigation (FBI) does not have 
     automated access to complete information from the States 
     concerning persons prohibited from possessing or receiving a 
     firearm under Federal or State law.
       (4) Nearly 21,000,000 criminal records are not accessible 
     by NICS and millions of criminal records are missing critical 
     data, such as arrest dispositions, due to data backlogs.
       (5) The primary cause of delay in NICS background checks is 
     the lack of--
       (A) updates and available State criminal disposition 
     records; and
       (B) automated access to information concerning persons 
     prohibited from possessing or receiving a firearm because of 
     mental illness, restraining orders, or misdemeanor 
     convictions for domestic violence.
       (6) Automated access to this information can be improved 
     by--
       (A) computerizing information relating to criminal history, 
     criminal dispositions, mental illness, restraining orders, 
     and misdemeanor convictions for domestic violence; or
       (B) making such information available to NICS in a usable 
     format.
       (7) Helping States to automate these records will reduce 
     delays for law-abiding gun purchasers.
       (8) On March 12, 2002, the senseless shooting, which took 
     the lives of a priest and a parishioner at the Our Lady of 
     Peace Church in Lynbrook, New York, brought attention to the 
     need to improve information-sharing that would enable Federal 
     and State law enforcement agencies to conduct a complete 
     background check on a potential firearm purchaser. The man 
     who committed this double murder had a prior disqualifying 
     mental health commitment and a restraining order against him, 
     but passed a Brady

[[Page S16025]]

     background check because NICS did not have the necessary 
     information to determine that he was ineligible to purchase a 
     firearm under Federal or State law.
       (9) On April 16, 2007, a student with a history of mental 
     illness at the Virginia Polytechnic Institute and State 
     University shot to death 32 students and faculty members, 
     wounded 17 more, and then took his own life. The shooting, 
     the deadliest campus shooting in United States history, 
     renewed the need to improve information-sharing that would 
     enable Federal and State law enforcement agencies to conduct 
     complete background checks on potential firearms purchasers. 
     In spite of a proven history of mental illness, the shooter 
     was able to purchase the two firearms used in the shooting. 
     Improved coordination between State and Federal authorities 
     could have ensured that the shooter's disqualifying mental 
     health information was available to NICS.

     SEC. 3. DEFINITIONS.

       As used in this Act, the following definitions shall apply:
       (1) Court order.--The term ``court order'' includes a court 
     order (as described in section 922(g)(8) of title 18, United 
     States Code).
       (2) Mental health terms.--The terms ``adjudicated as a 
     mental defective'' and ``committed to a mental institution'' 
     have the same meanings as in section 922(g)(4) of title 18, 
     United States Code.
       (3) Misdemeanor crime of domestic violence.--The term 
     ``misdemeanor crime of domestic violence'' has the meaning 
     given the term in section 921(a)(33) of title 18, United 
     States Code.

                    TITLE I--TRANSMITTAL OF RECORDS

     SEC. 101. ENHANCEMENT OF REQUIREMENT THAT FEDERAL DEPARTMENTS 
                   AND AGENCIES PROVIDE RELEVANT INFORMATION TO 
                   THE NATIONAL INSTANT CRIMINAL BACKGROUND CHECK 
                   SYSTEM.

       (a) In General.--Section 103(e)(1) of the Brady Handgun 
     Violence Prevention Act (18 U.S.C. 922 note) is amended--
       (1) by striking ``Notwithstanding'' and inserting the 
     following:
       ``(A) In general.--Notwithstanding'';
       (2) by striking ``On request'' and inserting the following:
       ``(B) Request of attorney general.--On request'';
       (3) by striking ``furnish such information'' and inserting 
     ``furnish electronic versions of the information described 
     under subparagraph (A)''; and
       (4) by adding at the end the following:
       ``(C) Quarterly submission to attorney general.--If a 
     Federal department or agency under subparagraph (A) has any 
     record of any person demonstrating that the person falls 
     within one of the categories described in subsection (g) or 
     (n) of section 922 of title 18, United States Code, the head 
     of such department or agency shall, not less frequently than 
     quarterly, provide the pertinent information contained in 
     such record to the Attorney General.
       ``(D) Information updates.--The Federal department or 
     agency, on being made aware that the basis under which a 
     record was made available under subparagraph (A) does not 
     apply, or no longer applies, shall--
       ``(i) update, correct, modify, or remove the record from 
     any database that the agency maintains and makes available to 
     the Attorney General, in accordance with the rules pertaining 
     to that database; and
       ``(ii) notify the Attorney General that such basis no 
     longer applies so that the National Instant Criminal 
     Background Check System is kept up to date.

     The Attorney General upon receiving notice pursuant to clause 
     (ii) shall ensure that the record in the National Instant 
     Criminal Background Check System is updated, corrected, 
     modified, or removed within 30 days of receipt.
       ``(E) Annual report.--The Attorney General shall submit an 
     annual report to Congress that describes the compliance of 
     each department or agency with the provisions of this 
     paragraph.''.
       (b) Provision and Maintenance of NICS Records.--
       (1) Department of homeland security.--The Secretary of 
     Homeland Security shall make available to the Attorney 
     General--
       (A) records, updated not less than quarterly, which are 
     relevant to a determination of whether a person is 
     disqualified from possessing or receiving a firearm under 
     subsection (g) or (n) of section 922 of title 18, United 
     States Code, for use in background checks performed by the 
     National Instant Criminal Background Check System; and
       (B) information regarding all the persons described in 
     subparagraph (A) of this paragraph who have changed their 
     status to a category not identified under section 922(g)(5) 
     of title 18, United States Code, for removal, when 
     applicable, from the National Instant Criminal Background 
     Check System.
       (2) Department of justice.--The Attorney General shall--
       (A) ensure that any information submitted to, or maintained 
     by, the Attorney General under this section is kept accurate 
     and confidential, as required by the laws, regulations, 
     policies, or procedures governing the applicable record 
     system;
       (B) provide for the timely removal and destruction of 
     obsolete and erroneous names and information from the 
     National Instant Criminal Background Check System; and
       (C) work with States to encourage the development of 
     computer systems, which would permit electronic notification 
     to the Attorney General when--
       (i) a court order has been issued, lifted, or otherwise 
     removed by order of the court; or
       (ii) a person has been adjudicated as a mental defective or 
     committed to a mental institution.
       (c) Standard for Adjudications and Commitments Related to 
     Mental Health.--
       (1) In general.--No department or agency of the Federal 
     Government may provide to the Attorney General any record of 
     an adjudication related to the mental health of a person or 
     any commitment of a person to a mental institution if--
       (A) the adjudication or commitment, respectively, has been 
     set aside or expunged, or the person has otherwise been fully 
     released or discharged from all mandatory treatment, 
     supervision, or monitoring;
       (B) the person has been found by a court, board, 
     commission, or other lawful authority to no longer suffer 
     from the mental health condition that was the basis of the 
     adjudication or commitment, respectively, or has otherwise 
     been found to be rehabilitated through any procedure 
     available under law; or
       (C) the adjudication or commitment, respectively, is based 
     solely on a medical finding of disability, without an 
     opportunity for a hearing by a court, board, commission, or 
     other lawful authority, and the person has not been 
     adjudicated as a mental defective consistent with section 
     922(g)(4) of title 18, United States Code, except that 
     nothing in this section or any other provision of law shall 
     prevent a Federal department or agency from providing to the 
     Attorney General any record demonstrating that a person was 
     adjudicated to be not guilty by reason of insanity, or based 
     on lack of mental responsibility, or found incompetent to 
     stand trial, in any criminal case or under the Uniform Code 
     of Military Justice.
       (2) Treatment of certain adjudications and commitments.--
       (A) Program for relief from disabilities.--
       (i) In general.--Each department or agency of the United 
     States that makes any adjudication related to the mental 
     health of a person or imposes any commitment to a mental 
     institution, as described in subsection (d)(4) and (g)(4) of 
     section 922 of title 18, United States Code, shall establish, 
     not later than 120 days after the date of enactment of this 
     Act, a program that permits such a person to apply for relief 
     from the disabilities imposed by such subsections.
       (ii) Process.--Each application for relief submitted under 
     the program required by this subparagraph shall be processed 
     not later than 365 days after the receipt of the application. 
     If a Federal department or agency fails to resolve an 
     application for relief within 365 days for any reason, 
     including a lack of appropriated funds, the department or 
     agency shall be deemed for all purposes to have denied such 
     request for relief without cause. Judicial review of any 
     petitions brought under this clause shall be de novo.
       (iii) Judicial review.--Relief and judicial review with 
     respect to the program required by this subparagraph shall be 
     available according to the standards prescribed in section 
     925(c) of title 18, United States Code. If the denial of a 
     petition for relief has been reversed after such judicial 
     review, the court shall award the prevailing party, other 
     than the United States, a reasonable attorney's fee for any 
     and all proceedings in relation to attaining such relief, and 
     the United States shall be liable for such fee. Such fee 
     shall be based upon the prevailing rates awarded to public 
     interest legal aid organizations in the relevant community.
       (B) Relief from disabilities.--In the case of an 
     adjudication related to the mental health of a person or a 
     commitment of a person to a mental institution, a record of 
     which may not be provided to the Attorney General under 
     paragraph (1), including because of the absence of a finding 
     described in subparagraph (C) of such paragraph, or from 
     which a person has been granted relief under a program 
     established under subparagraph (A) or (B), or because of a 
     removal of a record under section 103(e)(1)(D) of the Brady 
     Handgun Violence Prevention Act, the adjudication or 
     commitment, respectively, shall be deemed not to have 
     occurred for purposes of subsections (d)(4) and (g)(4) of 
     section 922 of title 18, United States Code. Any Federal 
     agency that grants a person relief from disabilities under 
     this subparagraph shall notify such person that the person is 
     no longer prohibited under 922(d)(4) or 922(g)(4) of title 
     18, United States Code, on account of the relieved disability 
     for which relief was granted pursuant to a proceeding 
     conducted under this subparagraph, with respect to the 
     acquisition, receipt, transfer, shipment, transportation, or 
     possession of firearms.
       (3) Notice requirement.--Effective 30 days after the date 
     of enactment of this Act, any Federal department or agency 
     that conducts proceedings to adjudicate a person as a mental 
     defective under 922(d)(4) or 922(g)(4) of title 18, United 
     States Code, shall provide both oral and written notice to 
     the individual at the commencement of the adjudication 
     process including--
       (A) notice that should the agency adjudicate the person as 
     a mental defective, or should the person be committed to a 
     mental institution, such adjudication, when final, or such 
     commitment, will prohibit the individual from purchasing, 
     possessing, receiving, shipping or transporting a firearm or 
     ammunition under section 922(d)(4) or section 922(g)(4) of 
     title 18, United States Code;

[[Page S16026]]

       (B) information about the penalties imposed for unlawful 
     possession, receipt, shipment or transportation of a firearm 
     under section 924(a)(2) of title 18, United States Code; and
       (C) information about the availability of relief from the 
     disabilities imposed by Federal laws with respect to the 
     acquisition, receipt, transfer, shipment, transportation, or 
     possession of firearms.
       (4) Effective date.--Except for paragraph (3), this 
     subsection shall apply to names and other information 
     provided before, on, or after the date of enactment of this 
     Act. Any name or information provided in violation of this 
     subsection (other than in violation of paragraph (3)) before, 
     on, or after such date shall be removed from the National 
     Instant Criminal Background Check System.

     SEC. 102. REQUIREMENTS TO OBTAIN WAIVER.

       (a) In General.--Beginning 3 years after the date of the 
     enactment of this Act, a State shall be eligible to receive a 
     waiver of the 10 percent matching requirement for National 
     Criminal History Improvement Grants under the Crime 
     Identification Technology Act of 1988 (42 U.S.C. 14601) if 
     the State provides at least 90 percent of the information 
     described in subsection (c). The length of such a waiver 
     shall not exceed 2 years.
       (b) State Estimates.--
       (1) Initial state estimate.--
       (A) In general.--To assist the Attorney General in making a 
     determination under subsection (a) of this section, and under 
     section 104, concerning the compliance of the States in 
     providing information to the Attorney General for the purpose 
     of receiving a waiver under subsection (a) of this section, 
     or facing a loss of funds under section 104, by a date not 
     later than 180 days after the date of the enactment of this 
     Act, each State shall provide the Attorney General with a 
     reasonable estimate, as calculated by a method determined by 
     the Attorney General and in accordance with section 104(d), 
     of the number of the records described in subparagraph (C) 
     applicable to such State that concern persons who are 
     prohibited from possessing or receiving a firearm under 
     subsection (g) or (n) of section 922 of title 18, United 
     States Code.
       (B) Failure to provide initial estimate.--A State that 
     fails to provide an estimate described in subparagraph (A) by 
     the date required under such subparagraph shall be ineligible 
     to receive any funds under section 103, until such date as it 
     provides such estimate to the Attorney General.
       (C) Record defined.--For purposes of subparagraph (A), a 
     record is the following:
       (i) A record that identifies a person who has been 
     convicted in any court of a crime punishable by imprisonment 
     for a term exceeding 1 year.
       (ii) A record that identifies a person for whom an 
     indictment has been returned for a crime punishable by 
     imprisonment for a term exceeding 1 year that is valid under 
     the laws of the State involved or who is a fugitive from 
     justice, as of the date of the estimate, and for which a 
     record of final disposition is not available.
       (iii) A record that identifies a person who is an unlawful 
     user of, or addicted to a controlled substance (as such terms 
     ``unlawful user'' and ``addicted'' are respectively defined 
     in regulations implementing section 922(g)(3) of title 18, 
     United States Code, as in effect on the date of the enactment 
     of this Act) as demonstrated by arrests, convictions, and 
     adjudications, and whose record is not protected from 
     disclosure to the Attorney General under any provision of 
     State or Federal law.
       (iv) A record that identifies a person who has been 
     adjudicated as a mental defective or committed to a mental 
     institution, consistent with section 922(g)(4) of title 18, 
     United States Code, and whose record is not protected from 
     disclosure to the Attorney General under any provision of 
     State or Federal law.
       (v) A record that is electronically available and that 
     identifies a person who, as of the date of such estimate, is 
     subject to a court order described in section 922(g)(8) of 
     title 18, United States Code.
       (vi) A record that is electronically available and that 
     identifies a person convicted in any court of a misdemeanor 
     crime of domestic violence, as defined in section 921(a)(33) 
     of title 18, United States Code.
       (2) Scope.--The Attorney General, in determining the 
     compliance of a State under this section or section 104 for 
     the purpose of granting a waiver or imposing a loss of 
     Federal funds, shall assess the total percentage of records 
     provided by the State concerning any event occurring within 
     the prior 20 years, which would disqualify a person from 
     possessing a firearm under subsection (g) or (n) of section 
     922 of title 18, United States Code.
       (3) Clarification.--Notwithstanding paragraph (2), States 
     shall endeavor to provide the National Instant Criminal 
     Background Check System with all records concerning persons 
     who are prohibited from possessing or receiving a firearm 
     under subsection (g) or (n) of section 922 of title 18, 
     United States Code, regardless of the elapsed time since the 
     disqualifying event.
       (c) Eligibility of State Records for Submission to the 
     National Instant Criminal Background Check System.--
       (1) Requirements for eligibility.--
       (A) In general.--From the information collected by a State, 
     the State shall make electronically available to the Attorney 
     General records relevant to a determination of whether a 
     person is disqualified from possessing or receiving a firearm 
     under subsection (g) or (n) of section 922 of title 18, 
     United States Code, or applicable State law.
       (B) NICS updates.--The State, on being made aware that the 
     basis under which a record was made available under 
     subparagraph (A) does not apply, or no longer applies, shall, 
     as soon as practicable--
       (i) update, correct, modify, or remove the record from any 
     database that the Federal or State government maintains and 
     makes available to the National Instant Criminal Background 
     Check System, consistent with the rules pertaining to that 
     database; and
       (ii) notify the Attorney General that such basis no longer 
     applies so that the record system in which the record is 
     maintained is kept up to date.

     The Attorney General upon receiving notice pursuant to clause 
     (ii) shall ensure that the record in the National Instant 
     Criminal Background Check System is updated, corrected, 
     modified, or removed within 30 days of receipt.
       (C) Certification.--To remain eligible for a waiver under 
     subsection (a), a State shall certify to the Attorney 
     General, not less than once during each 2-year period, that 
     at least 90 percent of all records described in subparagraph 
     (A) has been made electronically available to the Attorney 
     General in accordance with subparagraph (A).
       (D) Inclusion of all records.--For purposes of this 
     paragraph, a State shall identify and include all of the 
     records described under subparagraph (A) without regard to 
     the age of the record.
       (2) Application to persons convicted of misdemeanor crimes 
     of domestic violence.--The State shall make available to the 
     Attorney General, for use by the National Instant Criminal 
     Background Check System, records relevant to a determination 
     of whether a person has been convicted in any court of a 
     misdemeanor crime of domestic violence. With respect to 
     records relating to such crimes, the State shall provide 
     information specifically describing the offense and the 
     specific section or subsection of the offense for which the 
     defendant has been convicted and the relationship of the 
     defendant to the victim in each case.
       (3) Application to persons who have been adjudicated as a 
     mental defective or committed to a mental institution.--The 
     State shall make available to the Attorney General, for use 
     by the National Instant Criminal Background Check System, the 
     name and other relevant identifying information of persons 
     adjudicated as a mental defective or those committed to 
     mental institutions to assist the Attorney General in 
     enforcing section 922(g)(4) of title 18, United States Code.
       (d) Privacy Protections.--For any information provided to 
     the Attorney General for use by the National Instant Criminal 
     Background Check System, relating to persons prohibited from 
     possessing or receiving a firearm under section 922(g)(4) of 
     title 18, United States Code, the Attorney General shall work 
     with States and local law enforcement and the mental health 
     community to establish regulations and protocols for 
     protecting the privacy of information provided to the system. 
     The Attorney General shall make every effort to meet with any 
     mental health group seeking to express its views concerning 
     these regulations and protocols and shall seek to develop 
     regulations as expeditiously as practicable.
       (e) Attorney General Report.--Not later than January 31 of 
     each year, the Attorney General shall submit to the Committee 
     on the Judiciary of the Senate and the Committee on the 
     Judiciary of the House of Representatives a report on the 
     progress of States in automating the databases containing the 
     information described in subsection (b) and in making that 
     information electronically available to the Attorney General 
     pursuant to the requirements of subsection (c).

     SEC. 103. IMPLEMENTATION ASSISTANCE TO STATES.

       (a) Authorization.--
       (1) In general.--From amounts made available to carry out 
     this section and subject to section 102(b)(1)(B), the 
     Attorney General shall make grants to States and Indian 
     tribal governments, in a manner consistent with the National 
     Criminal History Improvement Program, which shall be used by 
     the States and Indian tribal governments, in conjunction with 
     units of local government and State and local courts, to 
     establish or upgrade information and identification 
     technologies for firearms eligibility determinations. Not 
     less than 3 percent, and no more than 10 percent of each 
     grant under this paragraph shall be used to maintain the 
     relief from disabilities program in accordance with section 
     105.
       (2) Grants to indian tribes.--Up to 5 percent of the grant 
     funding available under this section may be reserved for 
     Indian tribal governments, including tribal judicial systems.
       (b) Use of Grant Amounts.--Grants awarded to States or 
     Indian tribes under this section may only be used to--
       (1) create electronic systems, which provide accurate and 
     up-to-date information which is directly related to checks 
     under the National Instant Criminal Background Check System 
     (referred to in this section as ``NICS''), including court 
     disposition and corrections records;
       (2) assist States in establishing or enhancing their own 
     capacities to perform NICS background checks;

[[Page S16027]]

       (3) supply accurate and timely information to the Attorney 
     General concerning final dispositions of criminal records to 
     databases accessed by NICS;
       (4) supply accurate and timely information to the Attorney 
     General concerning the identity of persons who are prohibited 
     from obtaining a firearm under section 922(g)(4) of title 18, 
     United States Code, to be used by the Federal Bureau of 
     Investigation solely to conduct NICS background checks;
       (5) supply accurate and timely court orders and records of 
     misdemeanor crimes of domestic violence for inclusion in 
     Federal and State law enforcement databases used to conduct 
     NICS background checks;
       (6) collect and analyze data needed to demonstrate levels 
     of State compliance with this Act; and
       (7) maintain the relief from disabilities program in 
     accordance with section 105, but not less than 3 percent, and 
     no more than 10 percent of each grant shall be used for this 
     purpose.
       (c) Eligibility.--To be eligible for a grant under this 
     section, a State shall certify, to the satisfaction of the 
     Attorney General, that the State has implemented a relief 
     from disabilities program in accordance with section 105.
       (d) Condition.--As a condition of receiving a grant under 
     this section, a State shall specify the projects for which 
     grant amounts will be used, and shall use such amounts only 
     as specified. A State that violates this subsection shall be 
     liable to the Attorney General for the full amount of the 
     grant received under this section.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out this section $125,000,000 for fiscal year 2009, 
     $250,000,000 for fiscal year 2010, $250,000,000 for fiscal 
     year 2011, $125,000,000 for fiscal year 2012, and 
     $125,000,000 for fiscal year 2013.
       (2) Allocations.--For fiscal years 2009 and 2010, the 
     Attorney General shall endeavor to allocate at least \1/2\ of 
     the authorized appropriations to those States providing more 
     than 50 percent of the records required to be provided under 
     sections 102 and 103. For fiscal years 2011, 2012, and 2013, 
     the Attorney General shall endeavor to allocate at least \1/
     2\ of the authorized appropriations to those States providing 
     more than 70 percent of the records required to be provided 
     under section 102 and 103. The allocations in this paragraph 
     shall be subject to the discretion of the Attorney General, 
     who shall have the authority to make adjustments to the 
     distribution of the authorized appropriations as necessary to 
     maximize incentives for State compliance.
       (f) User Fee.--The Federal Bureau of Investigation shall 
     not charge a user fee for background checks pursuant to 
     section 922(t) of title 18, United States Code.

     SEC. 104. PENALTIES FOR NONCOMPLIANCE.

       (a) Attorney General Report.--
       (1) In general.--Not later than January 31 of each year, 
     the Attorney General shall submit to the Committee on the 
     Judiciary of the Senate and the Committee on the Judiciary of 
     the House of Representatives a report on the progress of the 
     States in automating the databases containing information 
     described under sections 102 and 103, and in providing that 
     information pursuant to the requirements of sections 102 and 
     103.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to the Department of Justice, such funds 
     as may be necessary to carry out paragraph (1).
       (b) Penalties.--
       (1) Discretionary reduction.--
       (A) During the 2-year period beginning 3 years after the 
     date of enactment of this Act, the Attorney General may 
     withhold not more than 3 percent of the amount that would 
     otherwise be allocated to a State under section 505 of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3755) if the State provides less than 50 percent of the 
     records required to be provided under sections 102 and 103.
       (B) During the 5-year period after the expiration of the 
     period referred to in subparagraph (A), the Attorney General 
     may withhold not more than 4 percent of the amount that would 
     otherwise be allocated to a State under section 505 of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3755) if the State provides less than 70 percent of the 
     records required to be provided under sections 102 and 103.
       (2) Mandatory reduction.--After the expiration of the 
     periods referred to in paragraph (1), the Attorney General 
     shall withhold 5 percent of the amount that would otherwise 
     be allocated to a State under section 505 of the Omnibus 
     Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3755), 
     if the State provides less than 90 percent of the records 
     required to be provided under sections 102 and 103.
       (3) Waiver by attorney general.--The Attorney General may 
     waive the applicability of paragraph (2) to a State if the 
     State provides substantial evidence, as determined by the 
     Attorney General, that the State is making a reasonable 
     effort to comply with the requirements of sections 102 and 
     103, including an inability to comply due to court order or 
     other legal restriction.
       (c) Reallocation.--Any funds that are not allocated to a 
     State because of the failure of the State to comply with the 
     requirements of this Act shall be reallocated to States that 
     meet such requirements.
       (d) Methodology.--The method established to calculate the 
     number of records to be reported, as set forth in section 
     102(b)(1)(A), and State compliance with the required level of 
     reporting under sections 102 and 103 shall be determined by 
     the Attorney General. The Attorney General shall calculate 
     the methodology based on the total number of records to be 
     reported from all subcategories of records, as described in 
     section 102(b)(1)(C).

     SEC. 105. RELIEF FROM DISABILITIES PROGRAM REQUIRED AS 
                   CONDITION FOR PARTICIPATION IN GRANT PROGRAMS.

       (a) Program Described.--A relief from disabilities program 
     is implemented by a State in accordance with this section if 
     the program--
       (1) permits a person who, pursuant to State law, has been 
     adjudicated as described in subsection (g)(4) of section 922 
     of title 18, United States Code, or has been committed to a 
     mental institution, to apply to the State for relief from the 
     disabilities imposed by subsections (d)(4) and (g)(4) of such 
     section by reason of the adjudication or commitment;
       (2) provides that a State court, board, commission, or 
     other lawful authority shall grant the relief, pursuant to 
     State law and in accordance with the principles of due 
     process, if the circumstances regarding the disabilities 
     referred to in paragraph (1), and the person's record and 
     reputation, are such that the person will not be likely to 
     act in a manner dangerous to public safety and that the 
     granting of the relief would not be contrary to the public 
     interest; and
       (3) permits a person whose application for the relief is 
     denied to file a petition with the State court of appropriate 
     jurisdiction for a de novo judicial review of the denial.
       (b) Authority To Provide Relief From Certain Disabilities 
     With Respect to Firearms.--If, under a State relief from 
     disabilities program implemented in accordance with this 
     section, an application for relief referred to in subsection 
     (a)(1) of this section is granted with respect to an 
     adjudication or a commitment to a mental institution or based 
     upon a removal of a record under section 102(c)(1)(B), the 
     adjudication or commitment, as the case may be, is deemed not 
     to have occurred for purposes of subsections (d)(4) and 
     (g)(4) of section 922 of title 18, United States Code.

     SEC. 106. ILLEGAL IMMIGRANT GUN PURCHASE NOTIFICATION.

       (a) In General.--Notwithstanding any other provision of law 
     or of this Act, all records obtained by the National Instant 
     Criminal Background Check system relevant to whether an 
     individual is prohibited from possessing a firearm because 
     such person is an alien illegally or unlawfully in the United 
     States shall be made available to U.S. Immigration and 
     Customs Enforcement.
       (b) Regulations.--The Attorney General, at his or her 
     discretion, shall promulgate guidelines relevant to what 
     records relevant to illegal aliens shall be provided pursuant 
     to the provisions of this Act.

 TITLE II--FOCUSING FEDERAL ASSISTANCE ON THE IMPROVEMENT OF RELEVANT 
                                RECORDS

     SEC. 201. CONTINUING EVALUATIONS.

       (a) Evaluation Required.--The Director of the Bureau of 
     Justice Statistics (referred to in this section as the 
     ``Director'') shall study and evaluate the operations of the 
     National Instant Criminal Background Check System. Such study 
     and evaluation shall include compilations and analyses of the 
     operations and record systems of the agencies and 
     organizations necessary to support such System.
       (b) Report on Grants.--Not later than January 31 of each 
     year, the Director shall submit to Congress a report 
     containing the estimates submitted by the States under 
     section 102(b).
       (c) Report on Best Practices.--Not later than January 31 of 
     each year, the Director shall submit to Congress, and to each 
     State participating in the National Criminal History 
     Improvement Program, a report of the practices of the States 
     regarding the collection, maintenance, automation, and 
     transmittal of information relevant to determining whether a 
     person is prohibited from possessing or receiving a firearm 
     by Federal or State law, by the State or any other agency, or 
     any other records relevant to the National Instant Criminal 
     Background Check System, that the Director considers to be 
     best practices.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary for each of 
     the fiscal years 2009 through 2013 to complete the studies, 
     evaluations, and reports required under this section.

    TITLE III--GRANTS TO STATE COURT SYSTEMS FOR THE IMPROVEMENT IN 
           AUTOMATION AND TRANSMITTAL OF DISPOSITION RECORDS

     SEC. 301. DISPOSITION RECORDS AUTOMATION AND TRANSMITTAL 
                   IMPROVEMENT GRANTS.

       (a) Grants Authorized.--From amounts made available to 
     carry out this section, the Attorney General shall make 
     grants to each State, consistent with State plans for the 
     integration, automation, and accessibility of criminal 
     history records, for use by the State court system to improve 
     the automation and transmittal of criminal history 
     dispositions, records relevant to determining whether a 
     person has been convicted of a misdemeanor crime of domestic 
     violence, court orders, and mental health adjudications or 
     commitments, to Federal and State record repositories in 
     accordance with sections 102 and 103 and the National 
     Criminal History Improvement Program.

[[Page S16028]]

       (b) Grants to Indian Tribes.--Up to 5 percent of the grant 
     funding available under this section may be reserved for 
     Indian tribal governments for use by Indian tribal judicial 
     systems.
       (c) Use of Funds.--Amounts granted under this section shall 
     be used by the State court system only--
       (1) to carry out, as necessary, assessments of the 
     capabilities of the courts of the State for the automation 
     and transmission of arrest and conviction records, court 
     orders, and mental health adjudications or commitments to 
     Federal and State record repositories; and
       (2) to implement policies, systems, and procedures for the 
     automation and transmission of arrest and conviction records, 
     court orders, and mental health adjudications or commitments 
     to Federal and State record repositories.
       (d) Eligibility.--To be eligible to receive a grant under 
     this section, a State shall certify, to the satisfaction of 
     the Attorney General, that the State has implemented a relief 
     from disabilities program in accordance with section 105.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Attorney General to carry out this 
     section $62,500,000 for fiscal year 2009, $125,000,000 for 
     fiscal year 2010, $125,000,000 for fiscal year 2011, 
     $62,500,000 for fiscal year 2012, and $62,500,000 for fiscal 
     year 2013.

                          TITLE IV--GAO AUDIT

     SEC. 401. GAO AUDIT.

       (a) In General.--The Comptroller General of the United 
     States shall conduct an audit of the expenditure of all funds 
     appropriated for criminal records improvement pursuant to 
     section 106(b) of the Brady Handgun Violence Prevention Act 
     (Public Law 103-159) to determine if the funds were expended 
     for the purposes authorized by the Act and how those funds 
     were expended for those purposes or were otherwise expended.
       (b) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to Congress describing the findings of the audit 
     conducted pursuant to subsection (a).
                                 ______
                                 
  SA 3888. Mr. SCHUMER (for Mr. Biden (for himself and Mr. McConnell)) 
proposed an amendment to the bill H.R. 3890, of 2003 to impose import 
sanctions on Burmese gemstones, expand the number of individuals 
against whom the visa ban is applicable, expand the blocking of assets 
and other prohibited activities, and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Burma Democracy Promotion 
     Act of 2007''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Beginning on August 19, 2007, hundreds of thousands of 
     citizens of Burma, including thousands of Buddhist monks and 
     students, participated in peaceful demonstrations against 
     rapidly deteriorating living conditions and the violent and 
     repressive policies of the State Peace and Development 
     Council, the ruling military regime in Burma--
       (A) to demand the release of all political prisoners, 
     including 1991 Nobel Peace Prize winner Aung San Suu Kyi; and
       (B) to urge the SPDC to engage in meaningful dialogue to 
     pursue national reconciliation.
       (2) The SPDC violently confronted unarmed demonstrators, 
     killing, injuring, and imprisoning citizens, including 
     several thousand Buddhist monks, and continues to forcefully 
     restrict peaceful forms of public expression.
       (3) The Department of State's 2006 Country Reports on Human 
     Rights Practices found that the SPDC--
       (A) routinely restricts freedoms of speech, press, 
     assembly, association, religion, and movement;
       (B) traffics in persons;
       (C) discriminates against women and ethnic minorities;
       (D) forcibly recruits child soldiers and child labor; and
       (E) commits other serious violations of human rights, 
     including extrajudicial killings, custodial deaths, 
     disappearances, rape, torture, abuse of prisoners and 
     detainees, and the imprisonment of citizens arbitrarily for 
     political motives.
       (4) Aung San Suu Kyi has been arbitrarily imprisoned or 
     held under house arrest for more than 12 years.
       (5) On September 25, 2007, President Bush announced that 
     the United States would--
       (A) tighten economic sanctions against Burma, and block 
     property and interests in property of--
       (i) certain senior leaders of the SPDC;
       (ii) individuals who provide financial backing for the 
     SPDC; and
       (iii) individuals responsible for violations of human 
     rights and for impeding the transition to democracy in Burma; 
     and
       (B) impose an expanded visa ban on individuals--
       (i) responsible for violations of human rights; and
       (ii) who aid, abet, or benefit from the efforts of the SPDC 
     to impede the efforts of the people of Burma to transition to 
     democracy and ensure respect for human dignity.
       (6) The Burmese regime and its supporters finance their 
     ongoing violations of human rights, undemocratic policies, 
     and military activities through financial transactions, 
     travel, and trade involving the United States, including the 
     sale of gemstones and hardwoods.
       (7) The SPDC seeks to evade the sanctions imposed in the 
     Burmese Freedom and Democracy Act of 2003. Millions of 
     dollars in gemstones that are exported from Burma ultimately 
     enter the United States, but the Burmese regime attempts to 
     conceal the origin of the gemstones in an effort to evade 
     sanctions. For example, over 90 percent of the world's ruby 
     supply originates in Burma but only 3 percent of the rubies 
     entering the United States are claimed to be of Burmese 
     origin. The value of Burmese gemstones is predominantly based 
     on their original quality and geological origin, rather than 
     the labor involved in cutting and polishing the gemstones.
       (8) Burma is home to approximately 60 percent of the 
     world's native teak reserves. More than \1/4\ of the world's 
     internationally traded teak originates from Burma, and 
     hardwood sales, mainly of teak, represent more than 11 
     percent of Burma's official foreign exchange earnings.
       (9) Burma officially exports tens of millions of dollars 
     worth of rubies, sapphires, pearls, jade, and other precious 
     stones each year and the SPDC owns a majority stake in all 
     mining operations within the borders of Burma.
       (10) On October 11, 2007, the United Nations Security 
     Council, with the consent of the People's Republic of China, 
     issued a statement condemning the violence in Burma, urging 
     the release of all political prisoners, and calling on the 
     SPDC to enter into a United Nations-mediated dialogue with 
     its political opposition.
       (11) The United Nations special envoy Ibrahim Gambari 
     traveled to Burma from September 29, 2007, through October 2, 
     2007, holding meetings with SPDC leader General Than Shwe and 
     democracy advocate Aung San Suu Kyi in an effort to promote 
     dialogue between the SPDC and democracy advocates.
       (12) The leaders of the SPDC will have a greater incentive 
     to cooperate with diplomatic efforts by the United Nations, 
     the Association of Southeast Asian Nations, and the People's 
     Republic of China if they come under targeted economic 
     pressure that denies them access to personal wealth and 
     sources of revenue.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Account; correspondent account; payable-through 
     account.--The terms ``account'', ``correspondent account'', 
     and ``payable-through account'' have the meanings given the 
     terms in section 5318A(e)(1) of title 31, United States Code.
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Foreign Relations of the Senate;
       (B) the Committee on Finance of the Senate;
       (C) the Committee on Foreign Affairs of the House of 
     Representatives; and
       (D) the Committee on Ways and Means of the House of 
     Representatives.
       (3) ASEAN.--The term ``ASEAN'' means the Association of 
     Southeast Asian Nations.
       (4) Person.--The term ``person'' means--
       (A) an individual, corporation, company, business 
     association, partnership, society, trust, any other 
     nongovernmental entity, organization, or group; and
       (B) any successor, subunit, or subsidiary of any person 
     described in subparagraph (A).
       (5) SPDC.--The term ``SPDC'' means the State Peace and 
     Development Council, the ruling military regime in Burma.
       (6) United states person.--The term ``United States 
     person'' means any United States citizen, permanent resident 
     alien, juridical person organized under the laws of the 
     United States (including foreign branches), or any person in 
     the United States.

     SEC. 4. STATEMENT OF POLICY.

       It is the policy of the United States to--
       (1) condemn the continued repression carried out by the 
     SPDC;
       (2) work with the international community, especially the 
     People's Republic of China, India, Thailand, and ASEAN, to 
     foster support for the legitimate democratic aspirations of 
     the people of Burma and to coordinate efforts to impose 
     sanctions on those directly responsible for human rights 
     abuses in Burma;
       (3) provide all appropriate support and assistance to aid a 
     peaceful transition to constitutional democracy in Burma;
       (4) support international efforts to alleviate the 
     suffering of Burmese refugees and address the urgent 
     humanitarian needs of the Burmese people; and
       (5) identify individuals responsible for the repression of 
     peaceful political activity in Burma and hold them 
     accountable for their actions.

     SEC. 5. SANCTIONS.

       (a) List of Officials of the SPDC.--
       (1) In general.--Not later than 30 days after the date of 
     the enactment of this Act, the President shall submit to the 
     appropriate congressional committees a list of--
       (A) officials of the SPDC who have played a direct and 
     substantial role in the repression of peaceful political 
     activity in Burma or in the commission of other human rights

[[Page S16029]]

     abuses, including any current or former officials of the 
     security services and judicial institutions of the SPDC; and
       (B) any other Burmese persons who provide substantial 
     economic and political support for the SPDC.
       (2) Updates.--The President shall regularly submit updated 
     versions of the list required under paragraph (1).
       (b) Sanctions.--
       (1) Visa ban.--A person included on the list required under 
     subsection (a) shall be ineligible for a visa to enter the 
     United States.
       (2) Financial sanctions.--
       (A) Blocked property.--No property or interest in property 
     belonging to a person described in subparagraph (C) may be 
     transferred, paid, exported, withdrawn, or otherwise dealt 
     with if--
       (i) the property is located in the United States or within 
     the possession or control of a United States person, 
     including the overseas branch of a United States person; or
       (ii) the property comes into the possession or control of a 
     United States person after the date of the enactment of this 
     Act.
       (B) Financial transactions.--Except with respect to 
     transactions authorized under Executive Orders 13047 (May 20, 
     1997) and 13310 (July 28, 2003), no United States person may 
     engage in a financial transaction with the SPDC or with a 
     person described in subparagraph (C).
       (C) Person described.--A person is described in this 
     subparagraph if the person is--
       (i) an official of the SPDC;
       (ii) included on the list required under subsection (a); or
       (iii) an immediate family member of a person included on 
     the list required under subsection (a), if the President 
     determines that the person included on the list--

       (I) effectively controls the property, for purposes of 
     subparagraph (A); or
       (II) would benefit from a financial transaction, for 
     purposes of subparagraph (B).

       (c) Authority for Additional Banking Sanctions.--
       (1) In general.--The Secretary of the Treasury, in 
     consultation with the Secretary of State, the Attorney 
     General of the United States, and the Chairman of the Board 
     of Governors of the Federal Reserve System, may prohibit or 
     impose conditions on the opening or maintaining in the United 
     States of a correspondent account or payable-through account 
     by any financial institution (as that term is defined in 
     section 5312 of title 31, United States Code) or financial 
     agency that is organized under the laws of a State, 
     territory, or possession of the United States, for or on 
     behalf of a foreign banking institution, if the Secretary 
     determines that the account might be used--
       (A) by a foreign banking institution that holds property or 
     an interest in property belonging to a person on the list 
     required under subsection (a); or
       (B) to conduct a transaction on behalf of a person on the 
     list required under subsection (a).
       (2) Authority to define terms.--The Secretary of the 
     Treasury may, by regulation, further define the terms used in 
     paragraph (1) for purposes of this section, as the Secretary 
     considers appropriate.
       (d) Rule of Construction.--Nothing in this section may be 
     construed to prohibit any contract or other financial 
     transaction with any nongovernmental humanitarian 
     organization in Burma.
       (e) Exceptions.--
       (1) In general.--The prohibitions and restrictions 
     described in subsections (b) and (c) shall not apply to 
     medicine, medical equipment or supplies, food or feed, or any 
     other form of humanitarian assistance provided to Burma as 
     relief in response to a humanitarian crisis.
       (2) Additional exceptions.--The Secretary of the Treasury 
     may, by regulation, authorize exceptions to the prohibitions 
     and restrictions described in subsection (b) and (c)--
       (A) to permit the United States to operate its diplomatic 
     mission;
       (B) to permit United States citizens to visit Burma; and
       (C) for such other purposes as the Secretary determines to 
     be necessary.
       (f) Penalties.--Any person who violates any prohibition or 
     restriction described in subsection (b) or (c) shall be 
     subject to the penalties under section 6 of the International 
     Emergency Economic Powers Act (50 U.S.C. 1705) to the same 
     extent as for a violation under that Act.
       (g) Termination of Sanctions.--The sanctions imposed under 
     subsection (b) or (c) shall apply until the President 
     determines and certifies to the appropriate congressional 
     committees that the SPDC has--
       (1) unconditionally released all political prisoners, 
     including Aung San Suu Kyi and other members of the National 
     League for Democracy;
       (2) entered into a substantive dialogue with democratic 
     forces led by the National League for Democracy and the 
     ethnic minorities of Burma on transitioning to democratic 
     government under the rule of law; and
       (3) allowed humanitarian access to populations affected by 
     armed conflict in all regions of Burma.
       (h) Waiver.--The sanctions described in subsection (b) or 
     (c) may be waived if the President determines and certifies 
     to the appropriate congressional committees that such waiver 
     is in the national interest of the United States.

     SEC. 6. PROHIBITION ON IMPORTATION OF BURMESE GEMS, 
                   HARDWOODS, AND OTHER ITEMS.

       Section 3(a)(1) of the Burmese Freedom and Democracy Act of 
     2003 (50 U.S.C. 1701 note) is amended by striking ``a product 
     of Burma.'' and inserting ``produced, mined, manufactured, 
     grown, or assembled in Burma, including--
       ``(A) any gemstone or rough unfinished geological material 
     mined or extracted from Burma, whether imported as a loose 
     item or as a component of a finished piece of jewelry; and
       ``(B) any teak or other hardwood timber, regardless of the 
     country in which such hardwood timber is milled, sawn, or 
     otherwise processed, whether imported in unprocessed form or 
     as a part or component of finished furniture or another wood 
     item.''.

     SEC. 7. SPECIAL REPRESENTATIVE AND POLICY COORDINATOR FOR 
                   BURMA.

       (a) United States Special Representative and Policy 
     Coordinator for Burma.--The President shall appoint a Special 
     Representative and Policy Coordinator for Burma, by and with 
     the advice and consent of the Senate.
       (b) Rank.--The Special Representative and Policy 
     Coordinator for Burma appointed under subsection (a) shall 
     have the rank of ambassador and shall hold the office at the 
     pleasure of the President.
       (c) Duties and Responsibilities.--The Special 
     Representative and Policy Coordinator for Burma shall--
       (1) promote a comprehensive international effort, including 
     multilateral sanctions, direct dialogue with the SPDC and 
     democracy advocates, and support for nongovernmental 
     organizations operating in Burma and neighboring countries, 
     designed to restore civilian democratic rule to Burma and 
     address the urgent humanitarian needs of the Burmese people;
       (2) consult broadly, including with the Governments of the 
     People's Republic of China, India, Thailand, and Japan, and 
     the members of ASEAN and the European Union to coordinate 
     policies toward Burma;
       (3) assist efforts by the United Nations Special Envoy to 
     secure the release of all political prisoners in Burma and to 
     promote dialogue between the SPDC and leaders of Burma's 
     democracy movement, including Aung San Suu Kyi;
       (4) consult with Congress on policies relevant to Burma and 
     the future and welfare of all the Burmese people, including 
     refugees; and
       (5) coordinate the imposition of Burma sanctions within the 
     United States Government and with the relevant international 
     financial institutions.

     SEC. 8. SENSE OF CONGRESS ON COORDINATION WITH THE 
                   ASSOCIATION OF SOUTHEAST ASIAN NATIONS.

       It is the sense of Congress that the United States--
       (1) joins the foreign ministers of member nations of ASEAN 
     that have expressed concern over the human rights situation 
     in Burma;
       (2) encourages ASEAN to take more substantial steps to 
     ensure a peaceful transition to democracy in Burma;
       (3) welcomes steps by ASEAN to strengthen its internal 
     governance through the adoption of a formal ASEAN charter;
       (4) urges ASEAN to ensure that all members live up to their 
     membership obligations and adhere to the core principles of 
     ASEAN, including respect for, and commitment to, human 
     rights; and
       (5) would welcome a decision by ASEAN, consistent with its 
     core documents and its new charter, to review Burma's 
     membership in ASEAN and consider appropriate disciplinary 
     measures, including suspension, until such time as the 
     Government of Burma has demonstrated an improved respect for, 
     and commitment to, human rights.

     SEC. 9. SUPPORT FOR CONSTITUTIONAL DEMOCRACY IN BURMA.

       (a) In General.--The President is authorized to assist 
     Burmese democracy activists who are dedicated to nonviolent 
     opposition to the SPDC in their efforts to promote freedom, 
     democracy, and human rights in Burma.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated $5,000,000 to the Secretary of State for 
     fiscal year 2008 to--
       (1) provide aid to democracy activists in Burma;
       (2) provide aid to individuals and groups conducting 
     democracy programming outside of Burma targeted at a peaceful 
     transition to constitutional democracy inside Burma; and
       (3) expand radio and television broadcasting into Burma.

     SEC. 10. SUPPORT FOR NONGOVERNMENTAL ORGANIZATIONS ADDRESSING 
                   THE HUMANITARIAN NEEDS OF THE BURMESE PEOPLE.

       (a) Sense of Congress.--It is the sense of Congress that 
     the international community should increase support for 
     nongovernmental organizations attempting to meet the urgent 
     humanitarian needs of the Burmese people.
       (b) Licenses for Humanitarian or Religious Activities in 
     Burma.--Section 5 of the Burmese Freedom and Democracy Act of 
     2003 (50 U.S.C. 1701) is amended--
       (1) by inserting ``(a) Opposition to Assistance to Burma'' 
     before ``The Secretary''; and
       (2) by adding at the end the following:
       ``(b) Licenses for Humanitarian or Religious Activities in 
     Burma.--Notwithstanding any other provision of law, the 
     Secretary of the Treasury is authorized to issue

[[Page S16030]]

     multi-year licenses for humanitarian or religious activities 
     in Burma. Licenses issued pursuant to this section shall be 
     subject to annual review.''.
       (c) Authorization of Appropriations.--
       (1) In general.--Subject to paragraph (2), there are 
     authorized to be appropriated $11,000,000 to the Secretary of 
     State for fiscal year 2008 to support operations by 
     nongovernmental organizations designed to address the 
     humanitarian needs of the Burmese people inside Burma and in 
     refugee camps in neighboring countries.
       (2) Limitation.--
       (A) In general.--Except as provided under subparagraph (B), 
     amounts appropriated pursuant to paragraph (1) may not be 
     provided to--
       (i) SPDC-controlled entities;
       (ii) entities run by members of the SPDC or their families; 
     or
       (iii) entities providing cash or resources to the SPDC, 
     including organizations affiliated with the United Nations.
       (B) Waiver.--The President may waive the funding 
     restriction described in subparagraph (A) if--
       (i) the President determines and certifies to the 
     appropriate congressional committees that such waiver is in 
     the national security interests of the United States;
       (ii) a description of the national security need for the 
     waiver is submitted to the appropriate congressional 
     committees; and
       (iii) the description submitted under clause (ii) is posted 
     on a publicly accessible Internet Web site of the Department 
     of State.

     SEC. 11. REPORT ON MILITARY AID TO BURMA.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary of State shall 
     submit a report to the appropriate congressional committees 
     that--
       (1) contains a list of countries that provide military aid 
     to Burma; and
       (2) describes the military aid provided by each of the 
     countries described in paragraph (1).
       (b) Military Aid Defined.--In this section, the term 
     ``military aid'' includes--
       (1) the provision of weapons, military vehicles, and 
     military aircraft;
       (2) the provision of military training; and
       (3) conducting joint military exercises.
       (c) Form.--The report required under subsection (a) shall 
     be submitted in unclassified form and may include a 
     classified annex.

     SEC. 12. SENSE OF CONGRESS ON INTERNATIONAL ARMS SALES TO 
                   BURMA.

       It is the sense of Congress that the United States should 
     lead efforts in the United Nations Security Council to impose 
     a mandatory international arms embargo on Burma, curtailing 
     all sales of weapons, ammunition, military vehicles, and 
     military aircraft to Burma until the SPDC releases all 
     political prisoners, restores constitutional rule, and holds 
     free and fair elections to establish a new government.
                                 ______
                                 
  SA 3889. Mr. SCHUMER (for Mr. Biden (for himself and Mr. McConnell)) 
proposed an amendment to the bill H.R. 3890, of 2003 to impose import 
sanctions on Burmese gemstones, expand the number of individuals 
against whom the visa ban is applicable, expand the blocking of assets 
and other prohibited activities, and for other purposes; as follows:

       The title is amended to read as follows:
         ``An Act to impose sanctions on officials of the State 
     Peace and Development Council in Burma, to amend the Burmese 
     Freedom and Democracy Act of 2003 to prohibit the importation 
     of gemstones and hardwoods from Burma, to promote a 
     coordinated international effort to restore civilian 
     democratic rule to Burma, and for other purposes.''.
                                 ______
                                 
  SA 3890. Mr. REID (for Mr. Baucus) proposed an amendment to the bill 
H.R. 3997, to amend the Internal Revenue Code of 1986 to provide tax 
relief and protections for military personnel, and for other purposes; 
as follows:

       In lieu of the matter proposed to be inserted by the 
     amendment of the House to the amendment of the Senate, insert 
     the following:

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Defenders 
     of Freedom Tax Relief 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

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. Special period of limitation when uniformed services retired 
              pay is reduced as a result of award of disability 
              compensation.
Sec. 106. Distributions from retirement plans to individuals called to 
              active duty.
Sec. 107. Disclosure of return information relating to veterans 
              programs made permanent.
Sec. 108. Contributions of military death gratuities to Roth IRAs and 
              Education Savings Accounts.
Sec. 109. Suspension of 5-year period during service with the Peace 
              Corps.
Sec. 110. Credit for employer differential wage payments to employees 
              who are active duty members of the uniformed services.
Sec. 111. State payments to service members treated as qualified 
              military benefits.
Sec. 112. Permanent exclusion of gain from sale of a principal 
              residence by certain employees of the intelligence 
              community.
Sec. 113. Special disposition rules for unused benefits in health 
              flexible spending arrangements of individuals called to 
              active duty.
Sec. 114. Option to exclude military basic housing allowance for 
              purposes of determining income eligibility under low-
              income housing credit and bond-financed residential 
              rental projects.

                      TITLE II--REVENUE PROVISIONS

Sec. 201. Increase in penalty for failure to file partnership returns.
Sec. 202. Increase in penalty for failure to file S corporation 
              returns.
Sec. 203. Increase in minimum penalty on failure to file a return of 
              tax.
Sec. 204. Revision of tax rules on expatriation.
Sec. 205. Special enrollment option by employer health plans for 
              members of uniform services who lose health care 
              coverage.

                  TITLE III--TAX TECHNICAL CORRECTIONS

Sec. 301. Short title.
Sec. 302. Amendment related to the Tax Relief and Health Care Act of 
              2006.
Sec. 303. Amendments related to title XII of the Pension Protection Act 
              of 2006.
Sec. 304. Amendments related to the Tax Increase Prevention and 
              Reconciliation Act of 2005.
Sec. 305. Amendments related to the Safe, Accountable, Flexible, 
              Efficient Transportation Equity Act: A Legacy for Users.
Sec. 306. Amendments related to the Energy Policy Act of 2005.
Sec. 307. Amendments related to the American Jobs Creation Act of 2004.
Sec. 308. Amendments related to the Economic Growth and Tax Relief 
              Reconciliation Act of 2001.
Sec. 309. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 310. Amendment related to the Internal Revenue Service 
              Restructuring and Reform Act of 1998.
Sec. 311. Clerical corrections.

  TITLE IV--PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH 
                                BENEFITS

Sec. 401. Parity in application of certain limits to mental health 
              benefits.

                     TITLE I--BENEFITS FOR MILITARY

     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

[[Page S16031]]

     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.''.
       (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.


[[Page S16032]]


     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. 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 ``the date of the 
     enactment of the Defenders of Freedom Tax Relief Act of 
     2007'' for ``the date of such determination'' in subparagraph 
     (A) thereof.

     SEC. 106. 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. 107. 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. 108. 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--
       ``(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

[[Page S16033]]

     of 1986 (as in effect after the amendments made by subsection 
     (b)) shall apply to taxable years beginning after December 
     31, 2007.

     SEC. 109. 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. 110. 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. 111. 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 made before, on, or after the date of 
     the enactment of this Act.

     SEC. 112. PERMANENT EXCLUSION OF GAIN FROM SALE OF A 
                   PRINCIPAL RESIDENCE BY CERTAIN EMPLOYEES OF THE 
                   INTELLIGENCE COMMUNITY.

       (a) Permanent Exclusion.--
       (1) 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''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to sales or exchanges after December 31, 2010.
       (b) Duty Station May Be Inside United States.--
       (1) In general.--Section 121(d)(9)(C) (defining qualified 
     official extended duty) is amended by striking clause (vi).
       (2) Effective date.--The amendment made by this subsection 
     shall apply to sales or exchanges after the date of the 
     enactment of this Act.

     SEC. 113. 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.

     SEC. 114. OPTION TO EXCLUDE MILITARY BASIC HOUSING ALLOWANCE 
                   FOR PURPOSES OF DETERMINING INCOME ELIGIBILITY 
                   UNDER LOW-INCOME HOUSING CREDIT AND BOND-
                   FINANCED RESIDENTIAL RENTAL PROJECTS.

       (a) In General.--The last sentence of 142(d)(2)(B) 
     (relating to income of individuals; area median gross income) 
     is amended to read as follows: ``For purposes of determining 
     income under this subparagraph--
       ``(i) subsections (g) and (h) of section 7872 shall not 
     apply, and
       ``(ii) in the case of determinations made before January 1, 
     2015, payments under section 403 of title 37, United States 
     Code, as a basic pay allowance for housing shall be 
     disregarded if the project is located in a census tract which 
     is designated by the Governor (of the State in which such 
     tract is located) as being in need of housing for members of 
     the Armed Forces of the United States.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect with respect to determinations made after 
     the date of the enactment of this Act.

                      TITLE II--REVENUE PROVISIONS

     SEC. 201. 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. 202. 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

[[Page S16034]]

     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. 203. 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. 204. 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--
       ``(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.

[[Page S16035]]

       ``(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.
       ``(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--

[[Page S16036]]

       ``(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 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.

     SEC. 205. SPECIAL ENROLLMENT OPTION BY EMPLOYER HEALTH PLANS 
                   FOR MEMBERS OF UNIFORM SERVICES WHO LOSE HEALTH 
                   CARE COVERAGE.

       (a) In General.--Section 9801(f) (relating to special 
     enrollment periods) is amended by adding at the end the 
     following new paragraph:
       ``(3) Loss of military health coverage.--
       ``(A) In general.--Notwithstanding paragraphs (1) and (2), 
     a group health plan shall permit an employee who is eligible, 
     but not enrolled, for coverage under the terms of the plan 
     (or a dependent of such an employee if the dependent is 
     eligible, but not enrolled, for coverage under such terms) to 
     enroll for coverage under the terms of the plan if each of 
     the following conditions is met:
       ``(i) The employee or dependent, by reason of service in 
     the uniformed services (within the meaning of section 4303 of 
     title 38, United States Code), was covered under a Federal 
     health care benefit program (including coverage under the 
     TRICARE program (as that term is defined in section 1072 of 
     title 10, United States Code) or by reason of entitlement to 
     health care benefits under the laws administered by the 
     Secretary of Veterans Affairs or as a member of the uniformed 
     services on active duty), and the employee or dependent loses 
     eligibility for such coverage.
       ``(ii) The employee or dependent is otherwise eligible to 
     enroll for coverage under the terms of the plan.
       ``(iii) The employee requests such coverage not later than 
     90 days after the date on which the coverage described in 
     clause (i) terminated.
       ``(B) Effective date of coverage.--Coverage requested under 
     subparagraph (A)(iii) shall become effective not later than 
     the first day of the first month after the date of such 
     request.''.
       (b) Employee Retirement Income Security Act of 1974.--
     Section 701(f) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1181(f)) is amended by adding at the end 
     the following:
       ``(3) Loss of military health coverage.--
       ``(A) In general.--Notwithstanding paragraphs (1) and (2), 
     a group health plan, and a health insurance issuer offering 
     group health insurance coverage in connection with a group 
     health plan, shall permit an employee who is eligible, but 
     not enrolled, for coverage under the terms of the plan (or a 
     dependent of such an employee if the dependent is eligible, 
     but not enrolled, for coverage under such terms) to enroll 
     for coverage under the terms of the plan if each of the 
     following conditions is met:
       ``(i) The employee or dependent, by reason of service in 
     the uniformed services (within the meaning of section 4303 of 
     title 38, United States Code), was covered under a Federal 
     health care benefit program (including coverage under the 
     TRICARE program (as that term is defined in section 1072 of 
     title 10, United States Code) or by reason of entitlement to 
     health care benefits under the laws administered by the 
     Secretary of Veterans Affairs or as a member of the uniformed 
     services on active duty), and the employee or dependent loses 
     eligibility for such coverage.
       ``(ii) The employee or dependent is otherwise eligible to 
     enroll for coverage under the terms of the plan.
       ``(iii) The employee requests such coverage not later than 
     90 days after the date on which the coverage described in 
     clause (i) terminated.
       ``(B) Effective date of coverage.--Coverage requested under 
     subparagraph (A)(iii) shall become effective not later than 
     the first day of the first month after the date of such 
     request.''.
       (c) Public Health Service Act.--Section 2701(f) of the 
     Public Health Service Act (42 U.S.C. 300gg(f)) is amended by 
     adding at the end the following:
       ``(3) Loss of military health coverage.--
       ``(A) In general.--Notwithstanding paragraphs (1) and (2), 
     a group health plan, and a health insurance issuer offering 
     group health insurance coverage in connection with a group 
     health plan, shall permit an employee who is eligible, but 
     not enrolled, for coverage under the terms of the plan (or a 
     dependent of such an employee if the dependent is eligible, 
     but not enrolled, for coverage under such terms) to enroll 
     for coverage under the terms of the plan if each of the 
     following conditions is met:
       ``(i) The employee or dependent, by reason of service in 
     the uniformed services (within the meaning of section 4303 of 
     title 38, United States Code), was covered under a Federal 
     health care benefit program (including coverage under the 
     TRICARE program (as that term is defined in section 1072 of 
     title 10, United States Code) or by reason of entitlement to 
     health care benefits under the laws administered by the 
     Secretary of Veterans Affairs or as a member of the uniformed 
     services on active duty), and the employee or dependent loses 
     eligibility for such coverage.
       ``(ii) The employee or dependent is otherwise eligible to 
     enroll for coverage under the terms of the plan.
       ``(iii) The employee requests such coverage not later than 
     90 days after the date on which the coverage described in 
     clause (i) terminated.
       ``(B) Effective date of coverage.--Coverage requested under 
     subparagraph (A)(iii) shall become effective not later than 
     the first day of the first month after the date of such 
     request.''.
       (d) Regulations.--The Secretary of the Treasury, the 
     Secretary of Labor, and the Secretary of Health and Human 
     Services, consistent with section 104 of the Health Insurance 
     Portability and Accountability Act of 1996 (42 U.S.C. 300gg-
     92 note), may promulgate such regulations as may be necessary 
     or appropriate to require the notification of individuals (or 
     their dependents) of their rights under the amendment made by 
     this Act.
       (e) Effective Date.--The amendments made by this section 
     shall take effect 90 days after the date of the enactment of 
     this Act.

                  TITLE III--TAX TECHNICAL CORRECTIONS

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``''.

[[Page S16037]]

     SEC. 302. 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. 303. 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. 304. 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.''.
       (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

[[Page S16038]]

     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. 305. 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. 306. 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):
       ``(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.''.

[[Page S16039]]

       (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. 307. 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''.
       (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. 308. 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. 309. 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. 310. 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. 311. CLERICAL CORRECTIONS.

       (a) In General.--
       (1) Paragraph (5) of section 21(e) is amended by striking 
     ``section 152(e)(3)(A)'' in the

[[Page S16040]]

     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
       (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)''.

[[Page S16041]]

       (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).
       (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 IV--PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH 
                                BENEFITS

     SEC. 401. 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''.

[[Page S16042]]

       (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.
                                 ______
                                 
  SA 3891. Mr. REID (for Mr. Kennedy (for himself, Mr. Baucus, Mr. 
Grassley, and Mr. Enzi)) proposed an amendment to the bill S. 1974, to 
make technical corrections related to the Pension Protection Act of 
2006; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; REFERENCES TO ACTS.

       (a) In General.--This Act may be cited as the ``Pension 
     Protection Technical Corrections Act of 2007''.
       (b) References to Acts.--For purposes of this Act--
       (1) Amendment of 1986 code.--The term ``1986 Code'' means 
     the Internal Revenue Code of 1986.
       (2) Amendment of erisa.--The term ``ERISA'' means the 
     Employee Retirement Income Security Act of 1974.
       (3) 2006 act.--The term ``2006 Act'' means the Pension 
     Protection Act of 2006.

     SEC. 2. AMENDMENTS RELATED TO TITLE I.

       (a) Amendments Related to Sections 101 and 111.--
       (1) Amendments to erisa.--
       (A) Clause (i) of section 302(c)(1)(A) of ERISA is amended 
     by striking ``the plan is'' and inserting ``the plan are''.
       (B) Section 302(c)(7) of ERISA is amended by inserting 
     ``which reduces the accrued benefit of any participant'' 
     after ``subsection (d)(2)'' in subparagraph (A).
       (C) Section 302(d)(1) of ERISA is amended by striking ``, 
     the valuation date,''.
       (2) Amendments to 1986 code.--
       (A) Clause (i) of section 412(c)(1)(A) of the 1986 Code is 
     amended by striking ``the plan is'' and inserting ``the plan 
     are''.
       (B) Section 412(c)(7) of the 1986 Code is amended by 
     inserting ``which reduces the accrued benefit of any 
     participant'' after ``subsection (d)(2)'' in subparagraph 
     (A).
       (C) Section 412(d)(1) of the 1986 Code is amended by 
     striking ``, the valuation date,''.
       (b) Amendments Related to Sections 102 and 112.--
       (1) Amendments to erisa.--
       (A) Section 303(b) of ERISA is amended to read as follows:
       ``(b) Target Normal Cost.--For purposes of this section--
       ``(1) In general.--Except as provided in subsection (i)(2) 
     with respect to plans in at-risk status, the term `target 
     normal cost' means, for any plan year, the excess of--
       ``(A) the sum of--
       ``(i) the present value of all benefits which are expected 
     to accrue or to be earned under the plan during the plan 
     year, plus
       ``(ii) the amount of plan-related expenses expected to be 
     paid from plan assets during the plan year, over
       ``(B) the amount of mandatory employee contributions 
     expected to be made during the plan year.
       ``(2) Special rule for increase in compensation.--For 
     purposes of this subsection, if any benefit attributable to 
     services performed in a preceding plan year is increased by 
     reason of any increase in compensation during the current 
     plan year, the increase in such benefit shall be treated as 
     having accrued during the current plan year.''.
       (B) Section 303(c)(5)(B)(iii) of ERISA is amended by 
     inserting ``beginning'' before ``after 2008''.
       (C) Section 303(c)(5)(B)(iv)(II) of ERISA is amended by 
     inserting ``for such year'' after ``beginning in 2007)''.
       (D) Section 303(f)(4)(A) of ERISA is amended by striking 
     ``paragraph (2)'' and inserting ``paragraph (3)''.
       (E) Section 303(h)(2)(F) of ERISA is amended--
       (i) by striking ``section 205(g)(3)(B)(iii)(I)) for such 
     month'' and inserting ``section 205(g)(3)(B)(iii)(I) for such 
     month)'', and
       (ii) by striking ``subparagraph (B)'' and inserting 
     ``subparagraph (C)''.
       (F) Section 303(i) of ERISA is amended--
       (i) in paragraph (2)--

       (I) by striking subparagraph (A) and inserting the 
     following new subparagraph:

       ``(A) the excess of--
       ``(i) the sum of--

       ``(I) the present value of all benefits which are expected 
     to accrue or to be earned under the plan during the plan 
     year, determined using the additional actuarial assumptions 
     described in paragraph (1)(B), plus
       ``(II) the amount of plan-related expenses expected to be 
     paid from plan assets during the plan year, over

       ``(ii) the amount of mandatory employee contributions 
     expected to be made during the plan year, plus'', and

       (II) in subparagraph (B), by striking ``the target normal 
     cost (determined without regard to this paragraph) of the 
     plan for the plan year'' and inserting ``the amount 
     determined under subsection (b)(1)(A)(i) with respect to the 
     plan for the plan year'', and

       (ii) by striking ``subparagraph (A)(ii)'' in the last 
     sentence of paragraph (4)(B) and inserting ``subparagraph 
     (A)''.
       (G) Section 303(j)(3) of ERISA--
       (i) is amended by adding at the end of subparagraph (A) the 
     following new sentence: ``In the case of plan years beginning 
     in 2008, the funding shortfall for the preceding plan year 
     may be determined using such methods of estimation as the 
     Secretary of the Treasury may provide.'',
       (ii) by adding at the end of subparagraph (E) the following 
     new clause:
       ``(iii) Plan with alternate valuation date.--The Secretary 
     of the Treasury shall prescribe regulations for the 
     application of this paragraph in the case of a plan which has 
     a valuation date other than the first day of the plan 
     year.'', and
       (iii) by striking ``and short years'' in the heading of 
     subparagraph (E) and inserting ``, short years, and years 
     with alternate valuation date''.
       (H) Section 303(k)(6)(B) of ERISA is amended by striking 
     ``, except'' and all that follows and inserting a period.
       (2) Amendments to 1986 code.--
       (A) Section 430(b) of the 1986 Code is amended to read as 
     follows:
       ``(b) Target Normal Cost.--For purposes of this section--
       ``(1) In general.--Except as provided in subsection (i)(2) 
     with respect to plans in at-risk status, the term `target 
     normal cost' means, for any plan year, the excess of--
       ``(A) the sum of--
       ``(i) the present value of all benefits which are expected 
     to accrue or to be earned under the plan during the plan 
     year, plus
       ``(ii) the amount of plan-related expenses expected to be 
     paid from plan assets during the plan year, over
       ``(B) the amount of mandatory employee contributions 
     expected to be made during the plan year.
       ``(2) Special rule for increase in compensation.--For 
     purposes of this subsection, if any benefit attributable to 
     services performed in a preceding plan year is increased by 
     reason of any increase in compensation during the current 
     plan year, the increase in such benefit shall be treated as 
     having accrued during the current plan year.''.
       (B) Section 430(c)(5)(B)(iii) of the 1986 Code is amended 
     by inserting ``beginning'' before ``after 2008''.
       (C) Section 430(c)(5)(B)(iv)(II) of the 1986 Code is 
     amended by inserting ``for such year'' after ``beginning in 
     2007)''.
       (D) Section 430(f) of the 1986 Code is amended--
       (i) by striking ``as of the first day of the plan year'' 
     the second place it appears in the first sentence of 
     paragraph (3)(A),
       (ii) by striking ``paragraph (2)'' in paragraph (4)(A) and 
     inserting ``paragraph (3)'',
       (iii) by striking ``paragraph (1), (2), or (4) of section 
     206(g)'' in paragraph (6)(B)(iii) and inserting ``subsection 
     (b), (c), or (e) of section 436'',
       (iv) by striking ``the sum of'' in paragraph (6)(C), and
       (v) by striking ``of the Treasury'' in paragraph (8).
       (E) Section 430(h)(2) of the 1986 Code is amended--
       (i) by inserting ``and target normal cost'' after ``funding 
     target'' in subparagraph (B),
       (ii) by striking ``liabilities'' and inserting ``benefits'' 
     in subparagraph (B),
       (iii) by striking ``section 417(e)(3)(D)(i)) for such 
     month'' in subparagraph (F) and inserting ``section 
     417(e)(3)(D)(i) for such month)'', and
       (iv) by striking ``subparagraph (B)'' in subparagraph (F) 
     and inserting ``subparagraph (C)''.
       (F) Section 430(i) of the 1986 Code is amended--
       (i) in paragraph (2)--

       (I) by striking subparagraph (A) and inserting the 
     following new subparagraph:

       ``(A) the excess of--
       ``(i) the sum of--

       ``(I) the present value of all benefits which are expected 
     to accrue or to be earned under the plan during the plan 
     year, determined using the additional actuarial assumptions 
     described in paragraph (1)(B), plus
       ``(II) the amount of plan-related expenses expected to be 
     paid from plan assets during the plan year, over

       ``(ii) the amount of mandatory employee contributions 
     expected to be made during the plan year, plus'', and

       (II) in subparagraph (B), by striking ``the target normal 
     cost (determined without regard to this paragraph) of the 
     plan for the plan year'' and inserting ``the amount 
     determined under subsection (b)(1)(A)(i) with respect to the 
     plan for the plan year'', and

       (ii) by striking ``subparagraph (A)(ii)'' in the last 
     sentence of paragraph (4)(B) and inserting ``subparagraph 
     (A)''.
       (G) Section 430(j)(3) of the 1986 Code is amended--
       (i) by adding at the end of subparagraph (A) the following 
     new sentence: ``In the case of plan years beginning in 2008, 
     the funding shortfall for the preceding plan year may be 
     determined using such methods of estimation as the Secretary 
     may provide.'',
       (ii) by striking ``section 302(c)'' in subparagraph 
     (D)(ii)(II) and inserting ``section 412(c)'',
       (iii) by adding at the end of subparagraph (E) the 
     following new clause:
       ``(iii) Plan with alternate valuation date.--The Secretary 
     shall prescribe regulations for the application of this 
     paragraph in the case of a plan which has a valuation date 
     other than the first day of the plan year.'', and
       (iv) by striking ``and short years'' in the heading of 
     subparagraph (E) and inserting ``, short years, and years 
     with alternate valuation date''.
       (H) Section 430(k) of the 1986 Code is amended--

[[Page S16043]]

       (i) by inserting ``(as provided under paragraph (2))'' 
     after ``applies'' in paragraph (1), and
       (ii) by striking ``, except'' and all that follows in 
     paragraph (6)(B) and inserting a period.
       (c) Amendments Related to Sections 103 and 113.--
       (1) Amendments to erisa.--
       (A) Section 101(j) of ERISA is amended--
       (i) in paragraph (2), by striking ``section 206(g)(4)(B)'' 
     and inserting ``section 206(g)(4)(A)''; and
       (ii) by adding at the end the following: ``The Secretary of 
     the Treasury, in consultation with the Secretary, shall have 
     the authority to prescribe rules applicable to the notices 
     required under this subsection.''.
       (B) Section 206(g)(1)(B)(ii) of ERISA is amended by 
     striking ``a funding'' and inserting ``an adjusted funding''.
       (C) The heading for section 206(g)(1)(C) of ERISA is 
     amended by inserting ``benefit'' after ``event''.
       (D) Section 206(g)(3)(E) of ERISA is amended by adding at 
     the end the following new flush sentence:

     ``Such term shall not include the payment of a benefit which 
     under section 203(e) may be immediately distributed without 
     the consent of the participant.''.
       (E) Section 206(g)(5)(A)(iv) of ERISA is amended by 
     inserting ``adjusted'' before ``funding''.
       (F) Section 206(g)(9)(C) of ERISA is amended--
       (i) by striking ``without regard to this subparagraph and'' 
     in clause (i), and
       (ii) in clause (iii)--

       (I) by striking ``without regard to this subparagraph'' and 
     inserting ``without regard to the reduction in the value of 
     assets under section 303(f)(4)'', and
       (II) by inserting ``beginning'' before ``after'' each place 
     it appears.

       (G) Section 206(g) of ERISA is amended by redesignating 
     paragraph (10) as paragraph (11) and by inserting after 
     paragraph (9) the following new paragraph:
       ``(10) Secretarial authority for plans with alternate 
     valuation date.--In the case of a plan which has designated a 
     valuation date other than the first day of the plan year, the 
     Secretary of the Treasury may prescribe rules for the 
     application of this subsection which are necessary to reflect 
     the alternate valuation date.''.
       (H) Section 502(c)(4) of ERISA is amended by striking ``by 
     any person'' and all that follows through the period and 
     inserting ``by any person of subsection (j), (k), or (l) of 
     section 101 or section 514(e)(3).''.
       (2) Amendments to 1986 code.--
       (A) Section 436(b)(2) of the 1986 Code is amended--
       (i) by striking ``section 303'' and inserting ``section 
     430'' in the matter preceding subparagraph (A), and
       (ii) by striking ``a funding'' and inserting ``an adjusted 
     funding'' in subparagraph (B).
       (B) Section 436(b)(3) of the 1986 Code is amended--
       (i) by inserting ``benefit'' after ``event'' in the 
     heading, and
       (ii) by striking ``any event'' in subparagraph (B) and 
     inserting ``an event''.
       (C) Section 436(d)(5) of the 1986 Code is amended by adding 
     at the end the following new flush sentence:

     ``Such term shall not include the payment of a benefit which 
     under section 411(a)(11) may be immediately distributed 
     without the consent of the participant.''.
       (D) Section 436(f) of the 1986 Code is amended--
       (i) by inserting ``adjusted'' before ``funding'' in 
     paragraph (1)(D), and
       (ii) by striking ``prefunding balance under section 430(f) 
     or funding standard carryover balance'' in paragraph (2) and 
     inserting ``prefunding balance or funding standard carryover 
     balance under section 430(f)''.
       (E) Section 436(j)(3) of the 1986 Code is amended--
       (i) in subparagraph (A)--

       (I) by striking ``without regard to this paragraph and'',
       (II) by striking ``section 430(f)(4)(A)'' and inserting 
     ``section 430(f)(4)'', and
       (III) by striking ``paragraph (1)'' and inserting 
     ``paragraphs (1) and (2)'', and

       (ii) in subparagraph (C)--

       (I) by striking ``without regard to this paragraph'' and 
     inserting ``without regard to the reduction in the value of 
     assets under section 430(f)(4)'', and
       (II) by inserting ``beginning'' before ``after'' each place 
     it appears.

       (F) Section 436 of the 1986 Code is amended by 
     redesignating subsection (k) as subsection (m) and by 
     inserting after subsection (j) the following new subsections:
       ``(k) Secretarial Authority for Plans With Alternate 
     Valuation Date.--In the case of a plan which has designated a 
     valuation date other than the first day of the plan year, the 
     Secretary may prescribe rules for the application of this 
     section which are necessary to reflect the alternate 
     valuation date.
       ``(l) Single-Employer Plan.--For purposes of this section, 
     the term `single-employer plan' means a plan which is not a 
     multiemployer plan.''.
       (3) Amendments to 2006 act.--Sections 103(c)(2)(A)(ii) and 
     113(b)(2)(A)(ii) of the 2006 Act are each amended--
       (A) by striking ``subsection'' and inserting ``section'', 
     and
       (B) by striking ``subparagraph'' and inserting 
     ``paragraph''.
       (d) Amendments Related to Sections 107 and 114.--
       (1) Amendments to erisa.--
       (A) Section 103(d) of ERISA is amended--
       (i) in paragraph (3), by striking ``the normal costs, the 
     accrued liabilities'' and inserting ``the normal costs or 
     target normal costs, the accrued liabilities or funding 
     target'', and
       (ii) by striking paragraph (7) and inserting the following 
     new paragraph:
       ``(7) A certification of the contribution necessary to 
     reduce the minimum required contribution determined under 
     section 303, or the accumulated funding deficiency determined 
     under section 304, to zero.''.
       (B) Section 4071 of ERISA is amended by striking ``as 
     section 303(k)(4) or 307(e)'' and inserting ``or section 
     303(k)(4),''.
       (2) Amendments to 1986 code.--
       (A) Section 401(a)(29) of the 1986 Code is amended by 
     striking ``on plans in at-risk status'' in the heading.
       (B) Section 401(a)(32)(C) of the 1986 Code is amended--
       (i) by striking ``section 430(j)'' and inserting ``section 
     430(j)(3)'', and
       (ii) by striking ``paragraph (5)(A)'' and inserting 
     ``section 430(j)(4)(A)''.
       (C) Section 401(a)(33) of the 1986 Code is amended--
       (i) by striking ``section 412(c)(2)'' in subparagraph 
     (B)(iii) and inserting ``section 412(d)(2)'', and
       (ii) by striking ``section 412(b)(2) (without regard to 
     subparagraph (B) thereof)'' in subparagraph (D) and inserting 
     ``section 412(b)(1), without regard to section 412(b)(2)''.
       (D) Section 411 of the 1986 Code is amended--
       (i) by striking ``section 412(c)(2)'' in subsection 
     (a)(3)(C) and inserting ``section 412(d)(2)'', and
       (ii) by striking ``section 412(e)(2)'' in subsection 
     (d)(6)(A) and inserting ``section 412(d)(2)''.
       (E) Section 414(l)(2)(B)(i)(I) of the 1986 Code is amended 
     to read as follows:

       ``(I) the sum of the funding target and target normal cost 
     determined under section 430, over''.

       (F) Section 4971 of the 1986 Code is amended--
       (i) by striking ``required minimum'' in subsection (b)(1) 
     and inserting ``minimum required'',
       (ii) by inserting ``or unpaid minimum required 
     contribution, whichever is applicable'' after ``accumulated 
     funding deficiency'' each place it appears in subsections 
     (c)(3) and (d)(1), and
       (iii) by striking ``section 412(a)(1)(A)'' in subsection 
     (e)(1) and inserting ``section 412(a)(2)''.
       (3) Amendment to 2006 act.--Section 114 of the 2006 Act is 
     amended by adding at the end the following new subsection:
       ``(g) Effective Dates.--
       ``(1) In general.--The amendments made by this section 
     shall apply to plan years beginning after 2007.
       ``(2) Excise tax.--The amendments made by subsection (e) 
     shall apply to taxable years beginning after 2007, but only 
     with respect to plan years described in paragraph (1) which 
     end with or within any such taxable year.''.
       (e) Amendment Related to Section 116.--Section 
     409A(b)(3)(A)(ii) of the 1986 Code is amended by inserting 
     ``to an applicable covered employee'' after ``under the 
     plan''.

     SEC. 3. AMENDMENTS RELATED TO TITLE II.

       (a) Amendment Related to Sections 201 and 211.--Section 
     201(b)(2)(A) of the 2006 Act is amended by striking ``has not 
     used'' and inserting ``has not adopted, or ceased using,''.
       (b) Amendments Related to Sections 202 and 212.--
       (1) Amendments to erisa.--
       (A) Section 305(b)(3)(C) of ERISA is amended by striking 
     ``section 101(b)(4)'' and inserting ``section 101(b)(1)''.
       (B) Section 305(b)(3)(D) of ERISA is amended by striking 
     ``The Secretary'' in clause (iii) and inserting ``The 
     Secretary of the Treasury, in consultation with the 
     Secretary''.
       (C) Section 305(c)(7) of ERISA is amended--
       (i) by striking ``to agree on'' and all that follows in 
     subparagraph (A)(ii) and inserting ``to adopt a contribution 
     schedule with terms consistent with the funding improvement 
     plan and a schedule from the plan sponsor,'', and
       (ii) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Date of implementation.--The date specified in this 
     subparagraph is the date which is 180 days after the date on 
     which the collective bargaining agreement described in 
     subparagraph (A) expires.'', and
       (iii) by adding at the end the following new subparagraph:
       ``(C) Failure to make scheduled contributions.--Any failure 
     to make a contribution under a schedule of contribution rates 
     provided under this paragraph shall be treated as a 
     delinquent contribution under section 515 and shall be 
     enforceable as such.''.
       (D) Section 305(e) of ERISA is amended--
       (i) in paragraph (3)(C)--

       (I) by striking all that follows ``to adopt a'' in clause 
     (i)(II) and inserting ``to adopt a contribution schedule with 
     terms consistent with the rehabilitation plan and a schedule 
     from the plan sponsor under paragraph (1)(B)(i),'',
       (II) by striking clause (ii) and inserting the following 
     new clause:

       ``(ii) Date of implementation.--The date specified in this 
     clause is the date which is

[[Page S16044]]

     180 days after the date on which the collective bargaining 
     agreement described in clause (i) expires.'', and

       (III) by adding at the end the following new clause:

       ``(iii) Failure to make scheduled contributions.--Any 
     failure to make a contribution under a schedule of 
     contribution rates provided under this subsection shall be 
     treated as a delinquent contribution under section 515 and 
     shall be enforceable as such.'',
       (ii) in paragraph (4)--

       (I) by striking ``the date of'' in subparagraph (A)(ii), 
     and
       (II) by striking ``and taking'' in subparagraph (B) and 
     inserting ``but taking'',

       (iii) in paragraph (6)--

       (I) by striking ``paragraph (1)(B)(i)'' and inserting ``the 
     last sentence of paragraph (1)'', and
       (II) by striking ``established'' and inserting 
     ``establish'',

       (iv) in paragraph (8)(C)(iii)--

       (I) by striking ``the Secretary'' in subclause (I) and 
     inserting ``the Secretary of the Treasury, in consultation 
     with the Secretary'', and
       (II) by striking ``Secretary'' in the last sentence and 
     inserting ``Secretary of the Treasury'', and

       (v) by striking ``an employer's withdrawal liability'' in 
     paragraph (9)(B) and inserting ``the allocation of unfunded 
     vested benefits to an employer''.
       (E) Section 305(g) of ERISA is amended by inserting ``under 
     subsection (c)'' after ``funding improvement plan'' the first 
     place it appears.
       (F) Section 302(b)(3) of ERISA is amended by striking ``the 
     plan adopts'' and inserting ``the plan sponsor adopts''.
       (G) Section 502(c)(2) of ERISA is amended by striking 
     ``101(b)(4)'' and inserting ``101(b)(1)''.
       (H) Section 502(c)(8)(A) of ERISA is amended by inserting 
     ``plan'' after ``multiemployer''.
       (2) Amendments to 1986 code.--
       (A) Section 432(b)(3)(C) of the 1986 Code is amended by 
     striking ``section 101(b)(4)'' and inserting ``section 
     101(b)(1)''.
       (B) Section 432(b)(3)(D)(iii) of the 1986 Code is amended 
     by striking ``The Secretary of Labor'' and inserting ``The 
     Secretary, in consultation with the Secretary of Labor''.
       (C) Section 432(c) of the 1986 Code is amended--
       (i) in paragraph (3), by striking ``section 304(d)'' in 
     subparagraph (A)(ii) and inserting ``section 431(d)'', and
       (ii) in paragraph (7)--

       (I) by striking ``to agree on'' and all that follows in 
     subparagraph (A)(ii) and inserting ``to adopt a contribution 
     schedule with terms consistent with the funding improvement 
     plan and a schedule from the plan sponsor,'', and
       (II) by striking subparagraph (B) and inserting the 
     following new subparagraph:

       ``(B) Date of implementation.--The date specified in this 
     subparagraph is the date which is 180 days after the date on 
     which the collective bargaining agreement described in 
     subparagraph (A) expires.''.
       (D) Section 432(e) of the 1986 Code is amended--
       (i) in paragraph (3)(C)--

       (I) by striking all that follows ``to adopt a'' in clause 
     (i)(II) and inserting ``to adopt a contribution schedule with 
     terms consistent with the rehabilitation plan and a schedule 
     from the plan sponsor under paragraph (1)(B)(i),'', and
       (II) by striking clause (ii) and inserting the following 
     new clause:

       ``(ii) Date of implementation.--The date specified in this 
     clause is the date which is 180 days after the date on which 
     the collective bargaining agreement described in clause (i) 
     expires.'',
       (ii) in paragraph (4)--

       (I) by striking ``the date of'' in subparagraph (A)(ii), 
     and
       (II) by striking ``and taking'' in subparagraph (B) and 
     inserting ``but taking'',

       (iii) in paragraph (6)--

       (I) by striking ``paragraph (1)(B)(i)'' and inserting ``the 
     last sentence of paragraph (1)'', and
       (II) by striking ``established'' and inserting 
     ``establish'',

       (iv) in paragraph (8)--

       (I) by striking ``section 204(g)'' in subparagraph (A)(i) 
     and inserting ``section 411(d)(6)'',
       (II) by inserting ``of the Employee Retirement Income 
     Security Act of 1974'' after ``4212(a)'' in subparagraph 
     (C)(i)(II),
       (III) by striking ``the Secretary of Labor'' in 
     subparagraph (C)(iii)(I) and inserting ``the Secretary, in 
     consultation with the Secretary of Labor'', and
       (IV) by striking ``the Secretary of Labor'' in the last 
     sentence of subparagraph (C)(iii) and inserting ``the 
     Secretary'', and

       (v) by striking ``an employer's withdrawal liability'' in 
     paragraph (9)(B) and inserting ``the allocation of unfunded 
     vested benefits to an employer''.
       (E) Section 432(f)(2)(A)(i) of the 1986 Code is amended by 
     striking ``section 411(b)(1)(A)'' and inserting ``section 
     411(a)(9)''.
       (F) Section 432(g) of the 1986 Code is amended by inserting 
     ``under subsection (c)'' after ``funding improvement plan'' 
     the first place it appears.
       (G) Section 432(i) of the 1986 Code is amended--
       (i) by striking ``section 412(a)'' in paragraph (3) and 
     inserting ``section 431(a)'', and
       (ii) by striking paragraph (9) and inserting the following 
     new paragraph:
       ``(9) Plan sponsor.--For purposes of this section, section 
     431, and section 4971(g)--
       ``(A) In general.--The term `plan sponsor' means, with 
     respect to any multiemployer plan, the association, 
     committee, joint board of trustees, or other similar group of 
     representatives of the parties who establish or maintain the 
     plan.
       ``(B) Special rule for section 404(c) plans.--In the case 
     of a plan described in section 404(c) (or a continuation of 
     such plan), such term means the bargaining parties described 
     in paragraph (1).''.
       (H) Section 412(b)(3) of the 1986 Code is amended by 
     striking ``the plan adopts'' and inserting ``the plan sponsor 
     adopts''.
       (I) Section 4971(g)(4) of the 1986 Code is amended--
       (i) in subparagraph (B)(ii), by striking ``first day of'' 
     and inserting ``day following the close of'', and
       (ii) by striking clause (ii) of subparagraph (C) and 
     inserting the following new clause:
       ``(ii) Plan sponsor.--For purposes of clause (i), the term 
     `plan sponsor' has the meaning given such term by section 
     432(i)(9).''.
       (3) Amendments to 2006 act.--
       (A) Section 212(b)(2) of the 2006 Act is amended by 
     striking ``Section 4971(c)(2) of such Code'' and inserting 
     ``Section 4971(e)(2) of such Code''.
       (B) Section 212(e)(1) of the 2006 Act is amended by 
     inserting ``, except that the amendments made by subsection 
     (b) shall apply to taxable years beginning after 2007, but 
     only with respect to plan years beginning after 2007 which 
     end with or within any such taxable year'' before the period 
     at the end.
       (C) Section 212(e)(2) of the 2006 Act is amended by 
     striking ``section 305(b)(3) of the Employee Retirement 
     Income Security Act of 1974'' and inserting ``section 
     432(b)(3) of the Internal Revenue Code of 1986''.

     SEC. 4. AMENDMENTS RELATED TO TITLE III.

       (a) Amendment Related to Section 301.--Clause (ii) of 
     section 101(c)(2)(A) of the Pension Funding Equity Act of 
     2004, as amended by section 301(c) of the 2006 Act, is 
     amended by striking ``2008'' and inserting ``2009''.
       (b) Amendments Related to Section 302.--
       (1) Amendment to erisa.--Section 205(g)(3)(B)(iii)(II) of 
     ERISA is amended by striking ``section 
     205(g)(3)(B)(iii)(II)'' and inserting ``section 
     205(g)(3)(A)(ii)(II)''.
       (2) Amendments to 1986 code.--
       (A) Section 417(e)(3)(D)(i) of the 1986 Code is amended by 
     striking ``clause (ii)'' and inserting ``subparagraph (C)''.
       (B) Section 415(b)(2)(E)(v) of the 1986 Code is amended to 
     read as follows:
       ``(v) For purposes of adjusting any benefit or limitation 
     under subparagraph (B), (C), or (D), the mortality table used 
     shall be the applicable mortality table (within the meaning 
     of section 417(e)(3)(B)).''.

     SEC. 5. AMENDMENTS RELATED TO TITLE IV.

       (a) Amendment Related to Section 401.--Section 
     4006(a)(3)(A)(i) of ERISA is amended by striking ``1990'' and 
     inserting ``2005''.
       (b) Amendment Related to Section 402.--Section 402(c)(1)(A) 
     of the 2006 Act is amended by striking ``commercial airline'' 
     and inserting ``commercial''.
       (c) Amendment Related to Section 408.--Section 4044(e) of 
     ERISA, as added by section 408(b)(2) of the 2006 Act, is 
     redesignated as subsection (f).
       (d) Amendments Related to Section 409.--Section 
     4041(b)(5)(A) of ERISA is amended by striking ``subparagraph 
     (B)'' and inserting ``subparagraphs (B) and (D)''.
       (e) Amendments Related to Section 410.--Section 
     4050(d)(4)(A) of ERISA is amended--
       (1) by striking ``and'' at the end of clause (i), and
       (2) by striking clause (ii) and inserting the following new 
     clauses:
       ``(ii) which is not a plan described in paragraph (2), (3), 
     (4), (6), (7), (8), (9), (10), or (11) of section 4021(b), 
     and
       ``(iii) which, was a plan described in section 401(a) of 
     the Internal Revenue Code of 1986 which includes a trust 
     exempt from tax under section 501(a) of such Code, and''.

     SEC. 6. AMENDMENTS RELATED TO TITLE V.

       (a) Amendment Related to Section 501.--Section 
     101(f)(2)(B)(ii) of ERISA is amended--
       (1) by striking ``for which the latest annual report filed 
     under section 104(a) was filed'' in subclause (I)(aa) and 
     inserting ``to which the notice relates'', and
       (2) by striking subclause (II) and inserting the following 
     new subclause:

       ``(II) in the case of a multiemployer plan, a statement, 
     for the plan year to which the notice relates and the 
     preceding 2 plan years, of the value of the plan assets 
     (determined both in the same manner as under section 304 and 
     under the rules of subclause (I)(bb)) and the value of the 
     plan liabilities (determined in the same manner as under 
     section 304 except that the method specified in section 
     305(i)(8) shall be used),''.

       (b) Amendments Related to Section 502.--
       (1) Section 101(k)(2) of ERISA is amended by filing at the 
     end the following new flush sentence:
     ``Subparagraph (C)(i) shall not apply to individually 
     identifiable information with respect to any plan investment 
     manager or adviser, or with respect to any other person 
     (other than an employee of the plan) preparing a financial 
     report required to be included under paragraph (1)(B).''.
       (2) Section 4221 of ERISA is amended by striking subsection 
     (e) and by redesignating subsections (f) and (g) as 
     subsections (e) and (f), respectively.

[[Page S16045]]

       (c) Amendments Related to Section 503.--
       (1) Amendments to erisa.--
       (A) Section 104(b)(3) of ERISA is amended by--
       (i) striking ``section 103(f)'' and inserting ``section 
     101(f)'', and
       (ii) striking ``the administrators'' and inserting ``the 
     administrator''.
       (B) Section 104(d)(1)(E)(ii) of ERISA is amended by 
     inserting ``funding'' after ``plan's''.
       (2) Amendments to 2006 act.--Section 503(e) of the 2006 Act 
     is amended by striking ``section 101(f)'' and inserting 
     ``section 104(d)''.
       (d) Amendment Related to Section 505.--Section 
     4010(d)(2)(B) of ERISA is amended by striking ``section 
     302(d)(2)'' and inserting ``section 303(d)(2)''.
       (e) Amendments Related to Section 506.--
       (1) Section 4041(c)(2)(D)(i) of ERISA is amended by 
     striking ``subsection (a)(2)'' the second place it appears 
     and inserting ``subparagraph (A) or the regulations under 
     subsection (a)(2)''.
       (2) Section 4042(c)(3)(C)(i) of ERISA is amended--
       (A) by striking ``and plan sponsor'' and inserting ``, the 
     plan sponsor, or the corporation'', and
       (B) by striking ``subparagraph (A)(i)'' and inserting 
     ``subparagraph (A)''.
       (f) Amendments Related to Section 508.--Section 209(a) of 
     ERISA is amended--
       (1) in paragraph (1)--
       (A) by striking ``regulations prescribed by the Secretary'' 
     and inserting ``such regulations as the Secretary may 
     prescribe'', and
       (B) by striking the last sentence and inserting ``The 
     report required under this paragraph shall be in the same 
     form, and contain the same information, as periodic benefit 
     statements under section 105(a).'', and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) If more than one employer adopts a plan, each such 
     employer shall furnish to the plan administrator the 
     information necessary for the administrator to maintain the 
     records, and make the reports, required by paragraph (1). 
     Such administrator shall maintain the records, and make the 
     reports, required by paragraph (1).''
       (g) Amendment Related to Section 509.--Section 101(i)(8)(B) 
     of ERISA is amended to read as follows:
       ``(B) One-participant retirement plan.--For purposes of 
     subparagraph (A), the term `one-participant retirement plan' 
     means a retirement plan that on the first day of the plan 
     year--
       ``(i) covered only one individual (or the individual and 
     the individual's spouse) and the individual (or the 
     individual and the individual's spouse) owned 100 percent of 
     the plan sponsor (whether or not incorporated), or
       ``(ii) covered only one or more partners (or partners and 
     their spouses) in the plan sponsor.''.

     SEC. 7. AMENDMENTS RELATED TO TITLE VI.

       (a) Amendments Related to Section 601.--
       (1) Amendments to erisa.--
       (A) Section 408(g)(3)(D)(ii) of ERISA is amended by 
     striking ``subsection (b)(14)(B)(ii)'' and inserting 
     ``subsection (b)(14)(A)(ii)''.
       (B) Section 408(g)(6)(A)(i) of ERISA is amended by striking 
     ``financial adviser'' and inserting ``fiduciary adviser''.
       (C) Section 408(g)(11)(A) of ERISA is amended--
       (i) by striking ``the participant'' each place it appears 
     and inserting ``a participant'', and
       (ii) by striking ``section 408(b)(4)'' in clause (ii) and 
     inserting ``subsection (b)(4)''.
       (2) Amendments to 1986 code.--
       (A) Section 4975(d)(17) of the 1986 Code, in the matter 
     preceding subparagraph (A), is amended by striking ``and that 
     permits'' and inserting ``that permits''.
       (B) Section 4975(f)(8) of the 1986 Code is amended--
       (i) in subparagraph (A), by striking ``subsection (b)(14)'' 
     and inserting ``subsection (d)(17)'',
       (ii) in subparagraph (C)(iv)(II), by striking ``subsection 
     (b)(14)(B)(ii)'' and inserting ``(d)(17)(A)(ii)'',
       (iii) in subparagraph (F)(i)(I), by striking ``financial 
     adviser'' and inserting ``fiduciary adviser,'',
       (iv) in subparagraph (I), by striking ``section 406'' and 
     inserting ``subsection (c)'', and
       (v) in subparagraph (J)(i)--

       (I) by striking ``the participant'' each place it appears 
     and inserting ``a participant'',
       (II) in the matter preceding subclause (I), by inserting 
     ``referred to in subsection (e)(3)(B)'' after ``investment 
     advice'', and
       (III) in subclause (II), by striking ``section 408(b)(4)'' 
     and inserting ``subsection (d)(4)''.

       (3) Amendment to 2006 act.--Section 601(b)(4) of the 2006 
     Act is amended by striking ``section 4975(c)(3)(B)'' and 
     inserting ``section 4975(e)(3)(B)''.
       (b) Amendments Related to Section 611.--
       (1) Amendment to erisa.--Section 408(b)(18)(C) of ERISA is 
     amended by striking ``or less''.
       (2) Amendments to 1986 code.--Section 4975(d) of the 1986 
     Code is amended--
       (A) in the matter preceding subparagraph (A) of paragraph 
     (18)--
       (i) by striking ``party in interest'' and inserting 
     ``disqualified person'', and
       (ii) by striking ``subsection (e)(3)(B)'' and inserting 
     ``subsection (e)(3)'',
       (B) in paragraphs (19), (20), and (21), by striking ``party 
     in interest'' each place it appears and inserting 
     ``disqualified person'', and
       (C) by striking ``or less'' in paragraph (21)(C).
       (c) Amendments Related to Section 612.--Section 
     4975(f)(11)(B)(i) of the 1986 Code is amended by--
       (1) inserting ``of the Employee Retirement Income Security 
     Act of 1974'' after ``section 407(d)(1)'', and
       (2) inserting ``of such Act'' after ``section 407(d)(2)''.
       (d) Amendments Related to Section 621.--Section 404(c)(1) 
     of ERISA is amended--
       (1) by inserting ``(or any period that would be a blackout 
     period but for the fact that it is a period of 3 consecutive 
     business days or less)'' after ``blackout period'' in 
     subparagraph (A)(ii), and
       (2) by inserting the following new sentence at the end of 
     subparagraph (B): ``In the case of any period that would be a 
     blackout period but for the fact that it is a period of 3 
     consecutive business days or less, the preceding sentence 
     shall apply to such period if the person referred to in 
     subparagraph (A)(ii) meets the requirements described in the 
     preceding sentence with respect to such period in the same 
     manner as if it were a blackout period.''
       (e) Amendments Related to Section 624.--Section 404(c)(5) 
     of ERISA is amended by striking ``participant'' each place it 
     appears and inserting ``participant or beneficiary''.

     SEC. 8. AMENDMENTS RELATED TO TITLE VII.

       (1) Amendments to erisa.--
       (A) Section 203(f)(1)(B) of ERISA is amended to read as 
     follows:
       ``(B) the requirements of section 204(c) or 205(g), or the 
     requirements of subsection (e), with respect to accrued 
     benefits derived from employer contributions,''.
       (B) Section 204(b)(5) of ERISA is amended--
       (i) by striking ``clause'' in subparagraph (A)(iii) and 
     inserting ``subparagraph'', and
       (ii) by inserting ``otherwise'' before ``allowable'' in 
     subparagraph (C).
       (C) Subclause (II) of section 204(b)(5)(B)(i) of ERISA is 
     amended to read as follows:

       ``(II) Preservation of capital.--An applicable defined 
     benefit plan shall be treated as failing to meet the 
     requirements of paragraph (1)(H) unless the plan provides 
     that an interest credit (or equivalent amount) of less than 
     zero shall in no event result in the account balance or 
     similar amount being less than the aggregate amount of 
     contributions credited to the account.''.

       (2) Amendments to 1986 code.--
       (A) Section 411(b)(5) of the 1986 Code is amended--
       (i) by striking ``clause'' in subparagraph (A)(iii) and 
     inserting ``subparagraph'', and
       (ii) by inserting ``otherwise'' before ``allowable'' in 
     subparagraph (C).
       (B) Section 411(a)(13)(A) of the 1986 Code is amended--
       (i) by striking ``paragraph (2)'' in clause (i) and 
     inserting ``subparagraph (B)'',
       (ii) by striking clause (ii) and inserting the following 
     new clause:
       ``(ii) the requirements of subsection (a)(11) or (c), or 
     the requirements of section 417(e), with respect to accrued 
     benefits derived from employer contributions,'', and
       (iii) by striking ``paragraph (3)'' in the matter following 
     clause (ii) and inserting ``subparagraph (C)''.
       (C) Subclause (II) of section 411(b)(5)(B)(i) of the 1986 
     Code is amended to read as follows:

       ``(II) Preservation of capital.--An applicable defined 
     benefit plan shall be treated as failing to meet the 
     requirements of paragraph (1)(H) unless the plan provides 
     that an interest credit (or equivalent amount) of less than 
     zero shall in no event result in the account balance or 
     similar amount being less than the aggregate amount of 
     contributions credited to the account.''.

       (3) Amendments to 2006 act.--
       (A) Section 701(d)(2) of the 2006 Act is amended by 
     striking ``204(g)'' and inserting ``205(g)''.
       (B) Section 701(e) of the 2006 Act is amended--
       (i) by inserting ``on or'' after ``period'' in paragraph 
     (3),
       (ii) in paragraph (4)--

       (I) by inserting ``the earlier of'' after ``before'' in the 
     matter preceding subparagraph (A), and
       (II) by striking ``earlier'' and inserting ``later'' in 
     subparagraph (A),

       (iii) by inserting ``on or'' before ``after'' each place it 
     appears in paragraph (5), and
       (iv) by adding at the end the following new paragraph:
       ``(6) Special rule for vesting requirements.--The 
     requirements of section 203(f)(2) of the Employee Retirement 
     Income Security Act of 1974 and section 411(a)(13)(B) of the 
     Internal Revenue Code of 1986 (as added by this Act)--
       ``(A) shall not apply to a participant who does not have an 
     hour of service after the effective date of such requirements 
     (as otherwise determined under this subsection); and
       ``(B) in the case of a plan other than a plan described in 
     paragraph (3) or (4), shall apply to plan years ending on or 
     after June 29, 2005.''.

     SEC. 9. AMENDMENTS RELATED TO TITLE VIII.

       (a) Amendments Related to Section 801.--
       (1) Section 404(o) of the 1986 Code is amended--
       (A) by striking ``430(g)(2)'' in paragraph (2)(A)(ii) and 
     inserting ``430(g)(3)'', and
       (B) by striking ``412(f)(4)'' in paragraph (4)(B) and 
     inserting ``412(d)(3)''.
       (2) Section 404(a)(7)(A) of the 1986 Code is amended--
       (A) by striking the next to last sentence, and

[[Page S16046]]

       (B) by striking ``the plan's funding shortfall determined 
     under section 430'' in the last sentence and inserting ``the 
     excess (if any) of the plan's funding target (as defined in 
     section 430(d)(1)) over the value of the plan's assets (as 
     determined under section 430(g)(3))''.
       (b) Amendment Related to Section 803.--Clause (iii) of 
     section 404(a)(7)(C) of the 1986 Code is amended to read as 
     follows:
       ``(iii) Limitation.--In the case of employer contributions 
     to 1 or more defined contribution plans--

       ``(I) if such contributions do not exceed 6 percent of the 
     compensation otherwise paid or accrued during the taxable 
     year to the beneficiaries under such plans, this paragraph 
     shall not apply to such contributions or to employer 
     contributions to the defined benefit plans to which this 
     paragraph would otherwise apply by reason of contributions to 
     the defined contribution plans, and
       ``(II) if such contributions exceed 6 percent of such 
     compensation, this paragraph shall be applied by only taking 
     into account such contributions to the extent of such excess.

     For purposes of this clause, amounts carried over from 
     preceding taxable years under subparagraph (B) shall be 
     treated as employer contributions to 1 or more defined 
     contributions plans to the extent attributable to employer 
     contributions to such plans in such preceding taxable 
     years.''.
       (c) Amendments Related to Section 824.--
       (1) Section 408A(c)(3)(B) of the 1986 Code, as in effect 
     after the amendments made by section 824(b)(1) of the 2006 
     Act, is amended--
       (A) by striking the second ``an'' before ``eligible'',
       (B) by striking ``other than a Roth IRA'', and
       (C) by adding at the end the following new flush sentence:
     ``This subparagraph shall not apply to a qualified rollover 
     contribution from a Roth IRA or to a qualified rollover 
     contribution from a designated Roth account which is a 
     rollover contribution described in section 402A(c)(3)(A).''
       (2) Section 408A(d)(3)(B), as in effect after the 
     amendments made by section 824(b)(2)(B) of the 2006 Act, is 
     amended by striking ``(other than a Roth IRA)'' and by 
     inserting at the end the following new sentence: ``This 
     paragraph shall not apply to a distribution which is a 
     qualified rollover contribution from a Roth IRA or a 
     qualified rollover contribution from a designated Roth 
     account which is a rollover contribution described in section 
     402A(c)(3)(A)''.
       (d) Amendment to Section 827.--The first sentence of 
     section 72(t)(2)(G)(iv) of the 1986 Code is amended by 
     inserting ``on or'' before ``before''.
       (e) Amendments Related to Section 829.--
       (1) Section 402(c)(11) of the 1986 Code is amended--
       (A) by inserting ``described in paragraph (8)(B)(iii)'' 
     after ``eligible retirement plan'' in subparagraph (A), and
       (B) by striking ``trust'' before ``designated beneficiary'' 
     in subparagraph (B).
       (2)(A) Section 402(f)(2)(A) of the 1986 Code is amended by 
     adding at the end the following new sentence: ``Such term 
     shall include any distribution which is treated as an 
     eligible rollover distribution by reason of section 
     403(a)(4)(B), 403(b)(8)(B), or 457(e)(16)(B).''
       (B) Clause (i) of section 402(c)(11) of the 1986 Code is 
     amended by striking ``for purposes of this subsection''.
       (C) The amendments made by this paragraph shall apply with 
     respect to plan years beginning after December 31, 2008.
       (f) Amendment Related to Section 832.--Section 415(f) of 
     the 1986 Code is amended by striking paragraph (2) and by 
     redesignating paragraph (3) as paragraph (2).
       (g) Amendments Related to Section 833.--
       (1) Section 408A(c)(3)(C) of the 1986 Code, as added by 
     section 833(c) of the 2006 Act, is redesignated as 
     subparagraph (E).
       (2) In the case of taxable years beginning after December 
     31, 2009, section 408A(c)(3)(E) of the 1986 Code (as 
     redesignated by paragraph (1))--
       (A) is redesignated as subparagraph (D), and
       (B) is amended by striking ``subparagraph (C)(ii)'' and 
     inserting ``subparagraph (B)(ii)''.
       (h) Amendments Related to Section 841.--
       (1) Section 420(c)(1)(A) of the 1986 Code is amended by 
     adding at the end the following new sentence: ``In the case 
     of a qualified future transfer or collectively bargained 
     transfer to which subsection (f) applies, any assets so 
     transferred may also be used to pay liabilities described in 
     subsection (f)(2)(C).''
       (2) Section 420(f)(2) of the 1986 Code is amended by 
     striking ``such'' before ``the applicable'' in subparagraph 
     (D)(i)(I).
       (3) Section 4980(c)(2)(B) of the 1986 Code is amended by 
     striking ``or'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, or'', and 
     by adding at the end the following new clause:
       ``(iii) any transfer described in section 
     420(f)(2)(B)(ii)(II).''.
       (i) Amendments Related to Section 845.--
       (1) Subsection (l) of section 402 of the 1986 Code is 
     amended--
       (A) in paragraph (1)--
       (i) by inserting ``maintained by the employer described in 
     paragraph (4)(B)'' after ``an eligible retirement plan'', and
       (ii) by striking ``of the employee, his spouse, or 
     dependents (as defined in section 152)'' ,
       (B) in paragraph (4)(D), by--
       (i) inserting ``(as defined in section 152)'' after 
     ``dependents'', and
       (ii) striking ``health insurance plan'' and inserting 
     ``health plan'', and
       (C) in paragraph (5)(A), by striking ``health insurance 
     plan'' and inserting ``health plan''.
       (2) Subparagraph (B) of section 402(l)(3) of the 1986 Code 
     is amended by striking ``all amounts distributed from all 
     eligible retirement plans were treated as 1 contract for 
     purposes of determining the inclusion of such distribution 
     under section 72'' and inserting ``all amounts to the credit 
     of the eligible public safety officer in all eligible 
     retirement plans maintained by the employer described in 
     paragraph (4)(B) 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''.
       (j) Amendments Related to Section 854.--
       (1) Section 3121(b)(5)(E) of the 1986 Code is amended by 
     striking ``or special trial judge''.
       (2) Section 210(a)(5)(E) of the Social Security Act is 
     amended by striking ``or special trial judge''.
       (k) Amendments Related to Section 856.--Section 856 of the 
     2006 Act, and the amendments made by such section, are hereby 
     repealed, and the Internal Revenue Code of 1986 shall be 
     applied and administered as if such sections and amendments 
     had not been enacted.
       (l) Amendment Related to Section 864.--Section 864(a) of 
     the 2006 Act is amended by striking ``Reconciliation''.

     SEC. 10. AMENDMENTS RELATED TO TITLE IX.

       (a) Amendment Related to Section 901.--Section 
     401(a)(35)(E)(iv) of the 1986 Code is amended to read as 
     follows:
       ``(iv) One-participant retirement plan.--For purposes of 
     clause (iii), the term `one-participant retirement plan' 
     means a retirement plan that on the first day of the plan 
     year--

       ``(I) covered only one individual (or the individual and 
     the individual's spouse) and the individual (or the 
     individual and the individual's spouse) owned 100 percent of 
     the plan sponsor (whether or not incorporated), or
       ``(II) covered only one or more partners (or partners and 
     their spouses) in the plan sponsor.''.

       (b) Amendments Related to Section 902.--
       (1) Section 401(k)(13)(D)(i)(I) of the 1986 Code is amended 
     by striking ``such compensation as exceeds 1 percent but does 
     not'' and inserting ``such contributions as exceed 1 percent 
     but do not''.
       (2) Sections 401(k)(8)(E) and 411(a)(3)(G) of the 1986 Code 
     are each amended--
       (A) by striking ``an erroneous automatic contribution'' and 
     inserting ``a permissible withdrawal'', and
       (B) by striking ``erroneous automatic contribution'' in the 
     heading and inserting ``permissible withdrawal''.
       (3) Section 402(g)(2)(A)(ii) of the 1986 Code is amended by 
     inserting ``through the end of such taxable year'' after 
     ``such amount''.
       (4) Section 414(w)(3) of the 1986 Code is amended--
       (A) in subparagraph (B), by inserting ``and'' after the 
     comma at the end,
       (B) by striking subparagraph (C), and
       (C) by redesignating subparagraph (D) as subparagraph (C).
       (5) Section 414(w)(5) of the 1986 Code is amended by 
     striking ``and'' at the end of subparagraph (B), by striking 
     the period at the end of subparagraph (C) and inserting a 
     comma, and by adding at the end the following:
       ``(D) a simplified employee pension the terms of which 
     provide for a salary reduction arrangement described in 
     section 408(k)(6), and
       ``(E) a simple retirement account (as defined in section 
     408(p)).''.
       (6) Section 414(w)(6) of the 1986 Code is amended by 
     inserting ``or for purposes of applying the limitation under 
     section 402(g)(1)'' before the period at the end.
       (c) Amendments Related to Section 903.--
       (1) Amendment of 1986 code.--Section 414(x)(1) of the 1986 
     Code is amended by adding at the end of paragraph (1) the 
     following new sentence: ``In the case of a termination of the 
     defined benefit plan and the applicable defined contribution 
     plan forming part of an eligible combined plan, the plan 
     administrator shall terminate each such plan separately.''
       (2) Amendments of erisa.--Section 210(e) of ERISA is 
     amended--
       (A) by adding at the end of paragraph (1) the following new 
     sentence: ``In the case of a termination of the defined 
     benefit plan and the applicable defined contribution plan 
     forming part of an eligible combined plan, the plan 
     administrator shall terminate each such plan separately.'', 
     and
       (B) by striking paragraph (3) and by redesignating 
     paragraphs (4), (5), and (6) as paragraphs (3), (4), and (5), 
     respectively.
       (d) Amendments Related to Section 906.--
       (1) Section 906(b)(1)(B)(ii) of the 2006 Act is amended by 
     striking ``paragraph (1)'' and inserting ``paragraph (10)''.
       (2) Section 4021(b) of ERISA is amended by inserting ``or'' 
     at the end of paragraph (12), by striking ``; or'' at the end 
     of paragraph (13) and inserting a period, and by striking 
     paragraph (14).

     SEC. 11. AMENDMENTS RELATED TO TITLE X.

       (a) Amendments to Railroad Retirement Act.--
       (1) Section 14(b) of the Railroad Retirement Act of 1974 
     (45 U.S.C. 231m(b)) is amended by adding at the end the 
     following:
       ``(3)(i) Payments made pursuant to paragraph (2) of this 
     subsection shall not require that the employee be entitled to 
     an annuity under section 2(a)(1) of this Act: Provided,

[[Page S16047]]

     however, That where an employee is not entitled to such an 
     annuity, payments made pursuant to paragraph (2) may not 
     begin before the month in which the following three 
     conditions are satisfied:
       ``(A) The employee has completed ten years of service in 
     the railroad industry or, five years of service all of which 
     accrues after December 31, 1995.
       ``(B) The spouse or former spouse attains age 62.
       ``(C) The employee attains age 62 (or if deceased, would 
     have attained age 62).
       ``(ii) Payments made pursuant to paragraph (2) of this 
     subsection shall terminate upon the death of the spouse or 
     former spouse, unless the court document provides for 
     termination at an earlier date. Notwithstanding the language 
     in a court order, that portion of payments made pursuant to 
     paragraph (2) which represents payments computed pursuant to 
     section 3(f)(2) of this Act shall not be paid after the death 
     of the employee.
       ``(iii) If the employee is not entitled to an annuity under 
     section 2(a)(1) of this Act, payments made pursuant to 
     paragraph (2) of this subsection shall be computed as though 
     the employee were entitled to an annuity.''.
       (2) Subsection (d) of section 5 of the Railroad Retirement 
     Act (45 U.S.C. 231d) is repealed.
       (b) Effective Dates.--
       (1) Subsection (a)(1).--The amendment made by subsection 
     (a)(1) shall apply with respect to payments due for months 
     after August 2007. If, prior to the effective date of such 
     amendment, payment pursuant to paragraph (2) of section 14(b) 
     of the Railroad Retirement Act of 1974 (45 U.S.C. 231m(b)) 
     was terminated because of the employee's death, payment to 
     the former spouse may be reinstated for months after August 
     2007.
       (2) Subsection (a)(2).--The amendment made by subsection 
     (a)(2) shall take effect upon the date of the enactment of 
     this Act.

     SEC. 12. AMENDMENTS RELATED TO TITLE XI.

       (a) Amendment Related to Section 1104.--Section 1104(d)(1) 
     of the 2006 Act is amended by striking ``Act'' the first 
     place it appears and inserting ``section''.
       (b) Amendments Related to Section 1105.--Section 3304(a) of 
     the 1986 Code is amended--
       (1) in paragraph (15)--
       (A) by redesignating clauses (i) and (ii) of subparagraph 
     (A) as subclauses (I) and (II),
       (B) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii),
       (C) by striking the semicolon at the end of clause (ii) (as 
     so redesignated) and inserting ``, and'',
       (D) by striking ``(15)'' and inserting ``(15)(A) subject to 
     subparagraph (B),'', and
       (E) by adding at the end the following:
       ``(B) the amount of compensation shall not be reduced on 
     account of any payments of governmental or other pensions, 
     retirement or retired pay, annuity, or other similar payments 
     which are not includible in the gross income of the 
     individual for the taxable year in which it was paid because 
     it was part of a rollover distribution;'', and
       (2) by striking the last sentence.
       (c) Amendments Related to Section 1106.--Section 3(37)(G) 
     of ERISA is amended by--
       (1) striking ``paragraph'' each place it appears in clauses 
     (ii), (iii), and (v)(I) and inserting ``subparagraph'',
       (2) striking ``subclause (i)(II)'' in clause (iii) and 
     inserting ``clause (i)(II)'',
       (3) striking ``subparagraph'' in clause (v)(II) and 
     inserting ``clause'', and
       (4) by striking ``section 101(b)(4)'' in clause (v)(III) 
     and inserting ``section 101(b)(1)''.

     SEC. 13. AMENDMENT RELATED TO TITLE XII.

       Section 408(d)(8)(D) of the 1986 Code 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''.

     SEC. 14. OTHER PROVISIONS.

       (a) Amendments Related to Sections 102 and 112.--
       (1) Amendment of erisa.--The last sentence of section 
     303(g)(3)(B) of ERISA is amended to read as follows: ``Any 
     such averaging shall be adjusted for contributions, 
     distributions, and expected earnings (as determined by the 
     plan's actuary on the basis of an assumed earnings rate 
     specified by the actuary but not in excess of the third 
     segment rate applicable under subsection (h)(2)(C)(iii)), as 
     specified by the Secretary of the Treasury.''.
       (2) Amendment of 1986 code.--The last sentence of section 
     430(g)(3)(B) of the 1986 Code is amended to read as follows: 
     ``Any such averaging shall be adjusted for contributions, 
     distributions, and expected earnings (as determined by the 
     plan's actuary on the basis of an assumed earnings rate 
     specified by the actuary but not in excess of the third 
     segment rate applicable under subsection (h)(2)(C)(iii)), as 
     specified by the Secretary.''.
       (b) Amendments Related to Section 1004.--
       (1) Amendment of erisa.--Paragraph (2) of section 205(d) of 
     ERISA is amended by adding at the end the following:
       ``(C) Notwithstanding subparagraph (B), the applicable 
     percentage is any percentage greater than or equal to 66\2/3\ 
     percent but not more than 75 percent if--
       ``(i) the plan is a defined contribution plan maintained 
     for its employees by an employer which is either exempt from 
     tax under section 501(a) of the Internal Revenue Code of 1986 
     or aggregated under subsection (b), (c), (m), or (o) of 
     section 414 of such Code with an organization that is exempt 
     from tax under section 501(a) of such Code,
       ``(ii) the survivor annuity percentage for the plan's 
     qualified joint and survivor annuity is 50 percent, and
       ``(iii) each participant may elect (subject to the 
     requirements of subsection (a)) an annuity for the life of 
     the participant with a survivor annuity for the life of the 
     spouse which is equal to 100 percent of the amount of the 
     annuity which is payable during the joint lives of the 
     participant and spouse and which is the actuarial equivalent 
     of a single annuity for the life of the participant.''.
       (2) Amendment of 1986 code.--Subsection (g) of section 417 
     of the 1986 Code is amended by adding at the end the 
     following:
       ``(3) Alternative method of compliance.--Notwithstanding 
     paragraph (2), the applicable percentage is any percentage 
     greater than or equal to 66\2/3\ percent but not more than 75 
     percent if--
       ``(A) the plan is a defined contribution plan maintained 
     for its employees by an employer which is either exempt from 
     tax under section 501(a) or aggregated under subsection (b), 
     (c), (m), or (o) of section 414 with an organization that is 
     exempt from tax under section 501(a),
       ``(B) the survivor annuity percentage for the plan's 
     qualified joint and survivor annuity is 50 percent, and
       ``(C) each participant may elect (subject to the 
     requirements of subsection (a)) an annuity for the life of 
     the participant with a survivor annuity for the life of the 
     spouse which is equal to 100 percent of the amount of the 
     annuity which is payable during the joint lives of the 
     participant and spouse and which is the actuarial equivalent 
     of a single annuity for the life of the participant.''.

     SEC. 15. EFFECTIVE DATE.

       Except as otherwise provided in this Act, the amendments 
     made by this Act shall take effect as if included in the 
     provisions of the 2006 Act to which the amendments relate.
                                 ______
                                 
  SA 3892. Mr. REID (for Mr. Lautenberg) proposed an amendment to the 
bill H.R. 3432, to establish the Commission on the Abolition of the 
Transatlantic Slave Trade; as follows:

       On page 15, strike lines 3 through 5.

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