[Congressional Record (Bound Edition), Volume 152 (2006), Part 12]
[House]
[Pages 16452-16503]
[From the U.S. Government Publishing Office, www.gpo.gov]




           ESTATE TAX AND EXTENSION OF TAX RELIEF ACT OF 2006

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 966, I call up 
the bill (H.R. 5970) to amend the Internal Revenue Code of 1986 to 
increase the unified credit against the estate tax to an exclusion 
equivalent of $5,000,000, to repeal the sunset provision for the estate 
and generation-skipping taxes, and to extend expiring provisions, and 
for other purposes, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The text of H.R. 5970 is as follows:

                               H.R. 5970

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

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Estate Tax 
     and Extension of Tax Relief Act of 2006''.
       (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--REFORM AND EXTENSION OF ESTATE TAX AFTER 2009

Sec. 101. Reform and extension of estate tax after 2009.
Sec. 102. Unified credit increased by unused unified credit of deceased 
              spouse.

   TITLE II--EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS

      Subtitle A--Extension and Modification of Certain Provisions

Sec. 201. Deduction for qualified tuition and related expenses.
Sec. 202. Extension and modification of new markets tax credit.
Sec. 203. Election to deduct State and local general sales taxes.
Sec. 204. Extension and modification of research credit.
Sec. 205. Work opportunity tax credit and welfare-to-work credit.
Sec. 206. Election to include combat pay as earned income for purposes 
              of earned income credit.
Sec. 207. Extension and modification of qualified zone academy bonds.
Sec. 208. Above-the-line deduction for certain expenses of elementary 
              and secondary school teachers.
Sec. 209. Extension and expansion of expensing of brownfields 
              remediation costs.
Sec. 210. Tax incentives for investment in the District of Columbia.
Sec. 211. Indian employment tax credit.
Sec. 212. Accelerated depreciation for business property on Indian 
              reservations.
Sec. 213. Fifteen-year straight-line cost recovery for qualified 
              leasehold improvements and qualified restaurant property.
Sec. 214. Cover over of tax on distilled spirits.
Sec. 215. Parity in application of certain limits to mental health 
              benefits.
Sec. 216. Corporate donations of scientific property used for research 
              and of computer technology and equipment.
Sec. 217. Availability of medical savings accounts.
Sec. 218. Taxable income limit on percentage depletion for oil and 
              natural gas produced from marginal properties.
Sec. 219. American Samoa economic development credit.
Sec. 220. Restructuring of New York Liberty Zone tax credits.
Sec. 221. Extension of bonus depreciation for certain qualified Gulf 
              Opportunity Zone property.
Sec. 222. Authority for undercover operations.
Sec. 223. Disclosures of certain tax return information.

                      Subtitle B--Other Provisions

Sec. 231. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 232. Credit for prior year minimum tax liability made refundable 
              after period of years.
Sec. 233. Returns required in connection with certain options.
Sec. 234. Partial expensing for advanced mine safety equipment.
Sec. 235. Mine rescue team training tax credit.
Sec. 236. Whistleblower reforms.
Sec. 237. Frivolous tax submissions.
Sec. 238. Addition of meningococcal and human papillomavirus vaccines 
              to list of taxable vaccines.
Sec. 239. Clarification of taxation of certain settlement funds made 
              permanent.
Sec. 240. Modification of active business definition under section 355 
              made permanent.
Sec. 241. Revision of State veterans limit made permanent.
Sec. 242. Capital gains treatment for certain self-created musical 
              works made permanent.
Sec. 243. Reduction in minimum vessel tonnage which qualifies for 
              tonnage tax made permanent.
Sec. 244. Modification of special arbitrage rule for certain funds made 
              permanent.
Sec. 245. Great Lakes domestic shipping to not disqualify vessel from 
              tonnage tax.
Sec. 246. Use of qualified mortgage bonds to finance residences for 
              veterans without regard to first-time homebuyer 
              requirement.
Sec. 247. Exclusion of gain from sale of a principal residence by 
              certain employees of the intelligence community.
Sec. 248. Treatment of coke and coke gas.
Sec. 249. Sale of property by judicial officers.
Sec. 250. Premiums for mortgage insurance.
Sec. 251. Modification of refunds for kerosene used in aviation.
Sec. 252. Deduction for qualified timber gain.
Sec. 253. Credit to holders of rural renaissance bonds.
Sec. 254. Restoration of deduction for travel expenses of spouse, etc. 
              accompanying taxpayer on business travel.
Sec. 255. Technical corrections.

  TITLE III--SURFACE MINING CONTROL AND RECLAMATION ACT AMENDMENTS OF 
                                  2006

Sec. 301. Short title.

               Subtitle A--Mining Control and Reclamation

Sec. 311. Abandoned Mine Reclamation Fund and purposes.
Sec. 312. Reclamation fee.
Sec. 313. Objectives of Fund.
Sec. 314. Reclamation of rural land.
Sec. 315. Liens.
Sec. 316. Certification.
Sec. 317. Remining incentives.
Sec. 318. Extension of limitation on application of prohibition on 
              issuance of permit.
Sec. 319. Tribal regulation of surface coal mining and reclamation 
              operations.

          Subtitle B--Coal Industry Retiree Health Benefit Act

Sec. 321. Certain related persons and successors in interest relieved 
              of liability if premiums prepaid.
Sec. 322. Transfers to funds; premium relief.
Sec. 323. Other provisions.

[[Page 16453]]

                   TITLE IV--INCREASE IN MINIMUM WAGE

Sec. 401. Minimum Wage.
Sec. 402. Tipped Wage Fairness.

         TITLE I--REFORM AND EXTENSION OF ESTATE TAX AFTER 2009

     SEC. 101. REFORM AND EXTENSION OF ESTATE TAX AFTER 2009.

       (a) Restoration of Unified Credit Against Gift Tax.--
     Paragraph (1) of section 2505(a) (relating to general rule 
     for unified credit against gift tax), after the application 
     of subsection (g), is amended by striking ``(determined as if 
     the applicable exclusion amount were $1,000,000)''.
       (b) Exclusion Equivalent of Unified Credit Increased to 
     $5,000,000.--Subsection (c) of section 2010 (relating to 
     unified credit against estate tax) is amended to read as 
     follows:
       ``(c) Applicable Credit Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable credit amount is the amount of the tentative tax 
     which would be determined under the rate schedule set forth 
     in section 2001(c) if the amount with respect to which such 
     tentative tax is to be computed were the applicable exclusion 
     amount.
       ``(2) Applicable exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable exclusion amount is as follows:
       ``(i) For calendar year 2010, $3,750,000.
       ``(ii) For calendar year 2011, $4,000,000.
       ``(iii) For calendar year 2012, $4,250,000.
       ``(iv) For calendar year 2013, $4,500,000.
       ``(v) For calendar year 2014, $4,750,000.
       ``(vi) For calendar year 2015 and thereafter, $5,000,000.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2015, the $5,000,000 amount in 
     subparagraph (A)(vi) 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 such calendar year by substituting 
     `calendar year 2014' for `calendar year 1992' in subparagraph 
     (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $100,000, such amount shall be rounded to the 
     nearest multiple of $100,000.''.
       (c) Rate Schedule.--
       (1) In general.--Subsection (c) of section 2001 (relating 
     to rate schedule) is amended to read as follows:
       ``(c) Rate Schedule.--
       ``(1) In general.--The tentative tax is equal to the sum 
     of--
       ``(A) the product of the rate specified in section 
     1(h)(1)(C) in effect on the date of the decedent's death 
     multiplied by so much of the sum described in subsection 
     (b)(1) as does not exceed $25,000,000, and
       ``(B) the applicable percentage effective on the date of 
     the decedent's death of so much of the sum described in 
     subsection (b)(1) as exceeds $25,000,000.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1)(B), the applicable percentage is--
       ``(A) in the case the decedent's death is in 2010, 40 
     percent,
       ``(B) in the case the decedent's death is in 2011, 38 
     percent,
       ``(C) in the case the decedent's death is in 2012, 36 
     percent,
       ``(D) in the case the decedent's death is in 2013, 34 
     percent,
       ``(E) in the case the decedent's death is in 2014, 32 
     percent, and
       ``(F) in the case the decedent's death is in 2015 or 
     thereafter, 30 percent.
       ``(3) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2015, each $25,000,000 amount 
     in subparagraphs (A) and (B) of paragraph (1) shall be 
     increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2014' for `calendar year 1992' in subparagraph 
     (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $100,000, such amount shall be rounded to the 
     nearest multiple of $100,000.''.
       (2) Conforming amendment.--Section 2502(a) (relating to 
     computation of tax), after the application of subsection (g), 
     is amended by adding at the end the following flush sentence:

     ``In computing the tentative tax under section 2001(c) for 
     purposes of this subsection, `the last day of the calendar 
     year in which the gift was made' shall be substituted for 
     `the date of the decedent's death' each place it appears in 
     such section.''.
       (d) Modifications of Estate and Gift Taxes to Reflect 
     Differences in Unified Credit Resulting From Different Tax 
     Rates.--
       (1) Estate tax.--
       (A) In general.--Section 2001(b)(2) (relating to 
     computation of tax) is amended by striking ``if the 
     provisions of subsection (c) (as in effect at the decedent's 
     death)'' and inserting ``if the modifications described in 
     subsection (g)''.
       (B) Modifications.--Section 2001 is amended by adding at 
     the end the following new subsection:
       ``(g) Modifications to Gift Tax Payable to Reflect 
     Different Tax Rates.--For purposes of applying subsection 
     (b)(2) with respect to 1 or more gifts, the rates of tax 
     under subsection (c) in effect on the date of the decedent's 
     death shall, in lieu of the rates of tax in effect at the 
     time of such gifts, be used both to compute--
       ``(1) the tax imposed by chapter 12 with respect to such 
     gifts, and
       ``(2) the credit allowed against such tax under section 
     2505, including in computing--
       ``(A) the applicable credit amount under section 
     2505(a)(1), and
       ``(B) the sum of the amounts allowed as a credit for all 
     preceding periods under section 2505(a)(2).

     For purposes of paragraph (2)(A), the applicable credit 
     amount for any calendar year before 1998 is the amount which 
     would be determined under section 2010(c) if the applicable 
     exclusion amount were the dollar amount under section 
     6018(a)(1) for such year.''.
       (2) Gift tax.--Section 2505(a) (relating to unified credit 
     against gift tax), after the application of subsection (g), 
     is amended by adding at the end the following new flush 
     sentence:

     ``For purposes of applying paragraph (2) for any calendar 
     year, the rate schedule under section 2001(c) used in 
     computing the applicable credit amount under paragraph (1) 
     for such calendar year shall, in lieu of the rates of tax in 
     effect for preceding calendar periods, be used in determining 
     the amounts allowable as a credit under this section for all 
     preceding calendar periods.''.
       (e) Repeal of Deduction for State Death Taxes.--
       (1) In general.--Section 2058 (relating to State death 
     taxes) is amended by adding at the end the following:
       ``(c) Termination.--This section shall not apply to the 
     estates of decedents dying after December 31, 2009.''.
       (2) Conforming amendment.--Section 2106(a)(4) is amended by 
     adding at the end the following new sentence: ``This 
     paragraph shall not apply to the estates of decedents dying 
     after December 31, 2009.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.
       (g) Additional Modifications to Estate Tax.--
       (1) In general.--The following provisions of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001, and the 
     amendments made by such provisions, are hereby repealed:
       (A) Subtitles A and E of title V.
       (B) Subsection (d), and so much of subsection (f)(3) as 
     relates to subsection (d), of section 511.
       (C) Paragraph (2) of subsection (b), and paragraph (2) of 
     subsection (e), of section 521.
     The Internal Revenue Code of 1986 shall be applied as if such 
     provisions and amendments had never been enacted.
       (2) Sunset not to apply.--Section 901 of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 shall not 
     apply to title V (other than subtitles F, G, and H thereof) 
     of such Act.
       (3) Repeal of deadwood.--
       (A) Sections 2011, 2057, and 2604 of the Internal Revenue 
     Code of 1986 are hereby repealed.
       (B) The table of sections for part II of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2011.
       (C) The table of sections for part IV of subchapter A of 
     chapter 11 of such Code is amended by striking the item 
     relating to section 2057.
       (D) The table of sections for subchapter A of chapter 13 of 
     such Code is amended by striking the item relating to section 
     2604.

     SEC. 102. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED CREDIT 
                   OF DECEASED SPOUSE.

       (a) In General.--Subsection (c) of section 2010 (defining 
     applicable credit amount), as amended by section 101(b), is 
     amended by striking paragraph (2) and inserting the following 
     new paragraphs:
       ``(2) Applicable exclusion amount.--For purposes of this 
     subsection, the applicable exclusion amount is the sum of--
       ``(A) the basic exclusion amount, and
       ``(B) in the case of a surviving spouse, the aggregate 
     deceased spousal unused exclusion amount.
       ``(3) Basic exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     basic exclusion amount is as follows:
       ``(i) For calendar year 2010, $3,750,000.
       ``(ii) For calendar year 2011, $4,000,000.
       ``(iii) For calendar year 2012, $4,250,000.
       ``(iv) For calendar year 2013, $4,500,000.
       ``(v) For calendar year 2014, $4,750,000.
       ``(vi) For calendar year 2015 and thereafter, $5,000,000.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2015, the $5,000,000 amount in 
     subparagraph (A)(vi) 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 such calendar year by substituting 
     `calendar year 2014' for `calendar year 1992' in subparagraph 
     (B) thereof.


[[Page 16454]]


     If any amount as adjusted under the preceding sentence is not 
     a multiple of $100,000, such amount shall be rounded to the 
     nearest multiple of $100,000.
       ``(4) Aggregate deceased spousal unused exclusion amount.--
     For purposes of this subsection, the term `aggregate deceased 
     spousal unused exclusion amount' means the lesser of--
       ``(A) the basic exclusion amount, or
       ``(B) the sum of the deceased spousal unused exclusion 
     amounts of the surviving spouse.
       ``(5) Deceased spousal unused exclusion amount.--For 
     purposes of this subsection, the term `deceased spousal 
     unused exclusion amount' means, with respect to the surviving 
     spouse of any deceased spouse dying after December 31, 2009, 
     the excess (if any) of--
       ``(A) the applicable exclusion amount of the deceased 
     spouse, over
       ``(B) the amount with respect to which the tentative tax is 
     determined under section 2001(b)(1) on the estate of such 
     deceased spouse.
       ``(6) Special rules.--
       ``(A) Election required.--A deceased spousal unused 
     exclusion amount may not be taken into account by a surviving 
     spouse under paragraph (5) unless the executor of the estate 
     of the deceased spouse files an estate tax return on which 
     such amount is computed and makes an election on such return 
     that such amount may be so taken into account. Such election, 
     once made, shall be irrevocable. No election may be made 
     under this subparagraph if such return is filed after the 
     time prescribed by law (including extensions) for filing such 
     return.
       ``(B) Examination of prior returns after expiration of 
     period of limitations with respect to deceased spousal unused 
     exclusion amount.--Notwithstanding any period of limitation 
     in section 6501, after the time has expired under section 
     6501 within which a tax may be assessed under chapter 11 or 
     12 with respect to a deceased spousal unused exclusion 
     amount, the Secretary may examine a return of the deceased 
     spouse to make determinations with respect to such amount for 
     purposes of carrying out this subsection.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this subsection.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 2505(a), as amended by section 
     101, is amended to read as follows:
       ``(1) the applicable credit amount under section 2010(c) 
     which would apply if the donor died as of the end of the 
     calendar year, reduced by''.
       (2) Section 2631(c) is amended by striking ``the applicable 
     exclusion amount'' and inserting ``the basic exclusion 
     amount''.
       (3) Section 6018(a)(1), after the application of section 
     101(g), is amended by striking ``applicable exclusion 
     amount'' and inserting ``basic exclusion amount''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.

   TITLE II--EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS

      Subtitle A--Extension and Modification of Certain Provisions

     SEC. 201. DEDUCTION FOR QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Section 222(e) is amended by striking 
     ``2005''and inserting ``2007''.
       (b) Conforming Amendments.--Section 222(b)(2)(B) is 
     amended--
       (1) by striking ``a taxable year beginning in 2004 or 
     2005'' and inserting ``any taxable year beginning after 
     2003'', and
       (2) by striking ``2004 and 2005'' in the heading and 
     inserting ``After 2003''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 202. EXTENSION AND MODIFICATION OF NEW MARKETS TAX 
                   CREDIT.

       (a) Extension.--Section 45D(f)(1)(D) is amended by striking 
     ``and 2007'' and inserting ``, 2007, and 2008''.
       (b) Regulations Regarding Non-Metropolitan Counties.--
     Section 45D(i) is amended by striking ``and'' at the end of 
     paragraph (4), by striking the period at the end of paragraph 
     (5) and inserting ``, and'', and by adding at the end the 
     following new paragraph:
       ``(6) which ensure that non-metropolitan counties receive a 
     proportional allocation of qualified equity investments.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 203. ELECTION TO DEDUCT STATE AND LOCAL GENERAL SALES 
                   TAXES.

       (a) In General.--Section 164(b)(5)(I) is amended by 
     striking ``2006'' and inserting ``2008''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 204. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.

       (a) Extension.--
       (1) In general.--Section 41(h)(1)(B) is amended by striking 
     ``2005'' and inserting ``2007''.
       (2) Conforming amendment.--Section 45C(b)(1)(D) is amended 
     by striking ``2005'' and inserting ``2007''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after December 31, 
     2005.
       (b) Increase in Rates of Alternative Incremental Credit.--
       (1) In general.--Subparagraph (A) of section 41(c)(4) 
     (relating to election of alternative incremental credit) is 
     amended--
       (A) by striking ``2.65 percent'' and inserting ``3 
     percent'',
       (B) by striking ``3.2 percent'' and inserting ``4 
     percent'', and
       (C) by striking ``3.75 percent'' and inserting ``5 
     percent''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after December 31, 
     2006.
       (c) Alternative Simplified Credit for Qualified Research 
     Expenses.--
       (1) In general.--Subsection (c) of section 41 (relating to 
     base amount) is amended by redesignating paragraphs (5) and 
     (6) as paragraphs (6) and (7), respectively, and by inserting 
     after paragraph (4) the following new paragraph:
       ``(5) Election of alternative simplified credit.--
       ``(A) In general.--At the election of the taxpayer, the 
     credit determined under subsection (a)(1) shall be equal to 
     12 percent of so much of the qualified research expenses for 
     the taxable year as exceeds 50 percent of the average 
     qualified research expenses for the 3 taxable years preceding 
     the taxable year for which the credit is being determined.
       ``(B) Special rule in case of no qualified research 
     expenses in any of 3 preceding taxable years.--
       ``(i) Taxpayers to which subparagraph applies.--The credit 
     under this paragraph shall be determined under this 
     subparagraph if the taxpayer has no qualified research 
     expenses in any one of the 3 taxable years preceding the 
     taxable year for which the credit is being determined.
       ``(ii) Credit rate.--The credit determined under this 
     subparagraph shall be equal to 6 percent of the qualified 
     research expenses for the taxable year.
       ``(C) Election.--An election under this paragraph shall 
     apply to the taxable year for which made and all succeeding 
     taxable years unless revoked with the consent of the 
     Secretary. An election under this paragraph may not be made 
     for any taxable year to which an election under paragraph (4) 
     applies.''.
       (2) Coordination with election of alternative incremental 
     credit.--
       (A) In general.--Section 41(c)(4)(B) (relating to election) 
     is amended by adding at the end the following: ``An election 
     under this paragraph may not be made for any taxable year to 
     which an election under paragraph (5) applies.''.
       (B) Transition rule.--In the case of an election under 
     section 41(c)(4) of the Internal Revenue Code of 1986 which 
     applies to the taxable year which includes the date of the 
     enactment of this Act, such election shall be treated as 
     revoked with the consent of the Secretary of the Treasury if 
     the taxpayer makes an election under section 41(c)(5) of such 
     Code (as added by subsection (c)) for such year.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after December 31, 
     2006.

     SEC. 205. WORK OPPORTUNITY TAX CREDIT AND WELFARE-TO-WORK 
                   CREDIT.

       (a) In General.--Sections 51(c)(4)(B) and 51A(f) are each 
     amended by striking ``2005'' and inserting ``2007''.
       (b) Eligibility of Ex-Felons Determined Without Regard to 
     Family Income.--Paragraph (4) of section 51(d) is amended by 
     adding ``and'' at the end of subparagraph (A), by striking 
     ``, and'' at the end of subparagraph (B) and inserting a 
     period, and by striking all that follows subparagraph (B).
       (c) Increase in Maximum Age for Eligibility of Food Stamp 
     Recipients.--Clause (i) of section 51(d)(8)(A) is amended by 
     striking ``25'' and inserting ``40''.
       (d) Extension of Paperwork Filing Deadline.--Section 
     51(d)(12)(A)(ii)(II) is amended by striking ``21st day'' and 
     inserting ``28th day''.
       (e) Consolidation of Work Opportunity Credit With Welfare-
     to-Work Credit.--
       (1) In general.--Paragraph (1) of section 51(d) is amended 
     by striking ``or'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, or'', and by adding at the end the following 
     new subparagraph:
       ``(I) a long-term family assistance recipient.''.
       (2) Long-term family assistance recipient.--Subsection (d) 
     of section 51 is amended by redesignating paragraphs (10) 
     through (12) as paragraphs (11) through (13), respectively, 
     and by inserting after paragraph (9) the following new 
     paragraph:
       ``(10) Long-term family assistance recipient.--The term 
     `long-term family assistance recipient' means any individual 
     who is certified by the designated local agency--
       ``(A) as being a member of a family receiving assistance 
     under a IV-A program (as defined in paragraph (2)(B)) for at 
     least the 18-month period ending on the hiring date,

[[Page 16455]]

       ``(B)(i) as being a member of a family receiving such 
     assistance for 18 months beginning after August 5, 1997, and
       ``(ii) as having a hiring date which is not more than 2 
     years after the end of the earliest such 18-month period, or
       ``(C)(i) as being a member of a family which ceased to be 
     eligible for such assistance by reason of any limitation 
     imposed by Federal or State law on the maximum period such 
     assistance is payable to a family, and
       ``(ii) as having a hiring date which is not more than 2 
     years after the date of such cessation.''.
       (3) Increased credit for employment of long-term family 
     assistance recipients.--Section 51 is amended by inserting 
     after subsection (d) the following new subsection:
       ``(e) Credit for Second-Year Wages for Employment of Long-
     Term Family Assistance Recipients.--
       ``(1) In general.--With respect to the employment of a 
     long-term family assistance recipient--
       ``(A) the amount of the work opportunity credit determined 
     under this section for the taxable year shall include 50 
     percent of the qualified second-year wages for such year, and
       ``(B) in lieu of applying subsection (b)(3), the amount of 
     the qualified first-year wages, and the amount of qualified 
     second-year wages, which may be taken into account with 
     respect to such a recipient shall not exceed $10,000 per 
     year.
       ``(2) Qualified second-year wages.--For purposes of this 
     subsection, the term `qualified second-year wages' means 
     qualified wages--
       ``(A) which are paid to a long-term family assistance 
     recipient, and
       ``(B) which are attributable to service rendered during the 
     1-year period beginning on the day after the last day of the 
     1-year period with respect to such recipient determined under 
     subsection (b)(2).
       ``(3) Special rules for agricultural and railway labor.--If 
     such recipient is an employee to whom subparagraph (A) or (B) 
     of subsection (h)(1) applies, rules similar to the rules of 
     such subparagraphs shall apply except that--
       ``(A) such subparagraph (A) shall be applied by 
     substituting `$10,000' for `$6,000', and
       ``(B) such subparagraph (B) shall be applied by 
     substituting `$833.33' for `$500'.''.
       (4) Repeal of separate welfare-to-work credit.--
       (A) In general.--Section 51A is hereby repealed.
       (B) Clerical amendment.--The table of sections for subpart 
     F of part IV of subchapter A of chapter 1 is amended by 
     striking the item relating to section 51A.
       (f) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to individuals 
     who begin work for the employer after December 31, 2005.
       (2) Consolidation.--The amendments made by subsections (b), 
     (c), (d), and (e) shall apply to individuals who begin work 
     for the employer after December 31, 2006.

     SEC. 206. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF EARNED INCOME CREDIT.

       (a) In General.--Section 32(c)(2)(B)(vi)(II) is amended by 
     striking ``2007'' and inserting ``2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 207. EXTENSION AND MODIFICATION OF QUALIFIED ZONE 
                   ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``and 2005'' and inserting ``2005, 2006, 
     and 2007''.
       (b) Special Rules Relating to Expenditures, Arbitrage, and 
     Reporting.--
       (1) In general.--Section 1397E is amended--
       (A) in subsection (d)(1), by striking ``and'' at the end of 
     subparagraph (C)(iii), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) the issue meets the requirements of subsections (f), 
     (g), and (h).'', and
       (B) by redesignating subsections (f), (g), (h), and (i) as 
     subsection (i), (j), (k), and (l), respectively, and by 
     inserting after subsection (e) the following new subsections:
       ``(f) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds from the sale of 
     the issue are to be spent for 1 or more qualified purposes 
     with respect to qualified zone academies within the 5-year 
     period beginning on the date of issuance of the qualified 
     zone academy bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds from the sale of the issue 
     will be incurred within the 6-month period beginning on the 
     date of issuance of the qualified zone academy bond, and
       ``(C) such purposes will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the issuer 
     establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     purposes will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the issuer shall redeem all of the 
     nonqualified bonds within 90 days after the end of such 
     period. For purposes of this paragraph, the amount of the 
     nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(g) Special Rules Relating to Arbitrage.--An issue shall 
     be treated as meeting the requirements of this subsection if 
     the issuer satisfies the arbitrage requirements of section 
     148 with respect to proceeds of the issue.
       ``(h) Reporting.--Issuers of qualified academy zone bonds 
     shall submit reports similar to the reports required under 
     section 149(e).''.
       (2) Conforming amendments.--Sections 54(l)(3)(B) and 
     1400N(l)(7)(B)(ii) are each amended by striking ``section 
     1397E(i)'' and inserting ``section 1397E(l)''.
       (c) Effective Dates.--
       (1) Extension.--The amendment made by subsection (a) shall 
     apply to obligations issued after December 31, 2005.
       (2) Special rules.--The amendments made by subsection (b) 
     shall apply to obligations issued after the date of the 
     enactment of this Act pursuant to allocations of the national 
     zone academy bond limitation for calendar years after 2005.

     SEC. 208. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EXPENSES OF 
                   ELEMENTARY AND SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) is 
     amended by striking ``or 2005'' and inserting ``2005, 2006, 
     or 2007''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 209. EXTENSION AND EXPANSION OF EXPENSING OF BROWNFIELDS 
                   REMEDIATION COSTS.

       (a) Extension.--Subsection (h) of section 198 is amended by 
     striking ``2005'' and inserting ``2007''.
       (b) Expansion.--Section 198(d)(1) (defining hazardous 
     substance) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) any petroleum product (as defined in section 
     4612(a)(3)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2005.

     SEC. 210. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of Zone.--
       (1) In general.--Subsection (f) of section 1400 is amended 
     by striking ``2005'' both places it appears and inserting 
     ``2007''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2005.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2005'' and inserting ``2007''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2005.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2006'' each place it appears and inserting 
     ``2008''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2010'' and inserting ``2012'', and
       (ii) by striking ``2010'' in the heading thereof and 
     inserting ``2012''.
       (B) Section 1400B(g)(2) is amended by striking ``2010'' and 
     inserting ``2012''.
       (C) Section 1400F(d) is amended by striking ``2010'' and 
     inserting ``2012''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2005.
       (B) Conforming amendments.--The amendments made by 
     paragraph (2) shall take effect on the date of the enactment 
     of this Act.
       (d) First-Time Homebuyer Credit.--
       (1) In general.--Subsection (i) of section 1400C is amended 
     by striking ``2006'' and inserting ``2008''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2005.

     SEC. 211. INDIAN EMPLOYMENT TAX CREDIT.

       (a) In General.--Section 45A(f) is amended by striking 
     ``2005'' and inserting ``2007''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

[[Page 16456]]



     SEC. 212. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATIONS.

       (a) In General.--Section 168(j)(8) is amended by striking 
     ``2005'' and inserting ``2007''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2005.

     SEC. 213. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR 
                   QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED 
                   RESTAURANT PROPERTY.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) are each amended by striking ``2006'' and 
     inserting ``2008''.
       (b) Treatment of Restaurant Property to Include New 
     Construction.--Paragraph (7) of section 168(e) (relating to 
     classification of property) is amended to read as follows:
       ``(7) Qualified restaurant property.--The term `qualified 
     restaurant property' means any section 1250 property which is 
     a building or an improvement to a building if more than 50 
     percent of the building's square footage is devoted to 
     preparation of, and seating for on-premises consumption of, 
     prepared meals.''.
       (c) Effective Dates.--
       (1) Subsection (a).--The amendments made by subsection (a) 
     shall apply to property placed in service after December 31, 
     2005.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 214. COVER OVER OF TAX ON DISTILLED SPIRITS.

       (a) In General.--Section 7652(f)(1) is amended by striking 
     ``2006'' and inserting ``2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to articles brought into the United States after 
     December 31, 2005.

     SEC. 215. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL 
                   HEALTH BENEFITS.

       (a) Amendment to the Internal Revenue Code of 1986.--
     Section 9812(f)(3) is amended by striking ``2006'' and 
     inserting ``2007''.
       (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 ``2006'' and inserting ``2007''.
       (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 ``2006''and inserting ``2007''.

     SEC. 216. CORPORATE DONATIONS OF SCIENTIFIC PROPERTY USED FOR 
                   RESEARCH AND OF COMPUTER TECHNOLOGY AND 
                   EQUIPMENT.

       (a) Extension of Computer Technology and Equipment 
     Donation.--
       (1) In general.--Section 170(e)(6)(G) is amended by 
     striking ``2005'' and inserting ``2007''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2005.
       (b) Expansion of Charitable Contribution Allowed for 
     Scientific Property Used for Research and for Computer 
     Technology and Equipment Used for Educational Purposes.--
       (1) Scientific property used for research.--
       (A) In general.--Clause (ii) of section 170(e)(4)(B) 
     (defining qualified research contributions) is amended by 
     inserting ``or assembled'' after ``constructed''.
       (B) Conforming amendment.--Clause (iii) of section 
     170(e)(4)(B) is amended by inserting ``or assembly'' after 
     ``construction''.
       (2) Computer technology and equipment for educational 
     purposes.--
       (A) In general.--Clause (ii) of section 170(e)(6)(B) is 
     amended by inserting ``or assembled'' after ``constructed'' 
     and ``or assembling'' after ``construction''.
       (B) Conforming amendment.--Subparagraph (D) of section 
     170(e)(6) is amended by inserting ``or assembled'' after 
     ``constructed'' and ``or assembly'' after ``construction''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 217. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

       (a) In General.--Paragraphs (2) and (3)(B) of section 
     220(i) are each amended by striking ``2005'' each place it 
     appears in the text and headings and inserting ``2007''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 220(j) is amended--
       (A) in the text by striking ``or 2004'' each place it 
     appears and inserting ``2004, 2005, or 2006'', and
       (B) in the heading by striking ``or 2004'' and inserting 
     ``2004, 2005, or 2006'' .
       (2) Subparagraph (A) of section 220(j)(4) is amended by 
     striking ``and 2004'' and inserting ``2004, 2005, and 2006''.
       (c) Time for Filing Reports, etc.--
       (1) The report required by section 220(j)(4) of the 
     Internal Revenue Code of 1986 to be made on August 1, 2005, 
     shall be treated as timely if made before the close of the 
     90-day period beginning on the date of the enactment of this 
     Act.
       (2) The determination and publication required by section 
     220(j)(5) of such Code with respect to calendar year 2005 
     shall be treated as timely if made before the close of the 
     120-day period beginning on the date of the enactment of this 
     Act. If the determination under the preceding sentence is 
     that 2005 is a cut-off year under section 220(i) of such 
     Code, the cut-off date under such section 220(i) shall be the 
     last day of such 120-day period.

     SEC. 218. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 
                   OIL AND NATURAL GAS PRODUCED FROM MARGINAL 
                   PROPERTIES.

       (a) In General.--Section 613A(c)(6)(H) is amended by 
     striking ``2006'' and inserting ``2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 219. AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT.

       (a) In General.--For purposes of section 30A of the 
     Internal Revenue Code of 1986, a domestic corporation shall 
     be treated as a qualified domestic corporation to which such 
     section applies if such corporation--
       (1) is an existing credit claimant with respect to American 
     Samoa, and
       (2) elected the application of section 936 of the Internal 
     Revenue Code of 1986 for its last taxable year beginning 
     before January 1, 2006.
       (b) Special Rules for Application of Section.--The 
     following rules shall apply in applying section 30A of the 
     Internal Revenue Code of 1986 for purposes of this section:
       (1) Amount of credit.--Notwithstanding section 30A(a)(1) of 
     such Code, the amount of the credit determined under section 
     30A(a)(1) of such Code for any taxable year shall be the 
     amount determined under section 30A(d) of such Code, except 
     that section 30A(d) shall be applied without regard to 
     paragraph (3) thereof.
       (2) Separate application.--In applying section 30A(a)(3) of 
     such Code in the case of a corporation treated as a qualified 
     domestic corporation by reason of this section, section 30A 
     of such Code (and so much of section 936 of such Code as 
     relates to such section 30A) shall be applied separately with 
     respect to American Samoa.
       (3) Foreign tax credit allowed.--Notwithstanding section 
     30A(e) of such Code, the provisions of section 936(c) of such 
     Code shall not apply with respect to the credit allowed by 
     reason of this section.
       (c) Definitions.--For purposes of this section, any term 
     which is used in this section which is also used in section 
     30A or 936 of such Code shall have the same meaning given 
     such term by such section 30A or 936.
       (d) Application of Section.--Notwithstanding section 30A(h) 
     or section 936(j) of such Code, this section (and so much of 
     section 30A and section 936 of such Code as relates to this 
     section) shall apply to the first two taxable years of a 
     corporation to which subsection (a) applies which begin after 
     December 31, 2005, and before January 1, 2008.

     SEC. 220. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

       (a) In General.--Part I of subchapter Y of chapter 1 is 
     amended by redesignating section 1400L as 1400K and by adding 
     at the end the following new section:

     ``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so much of the portion of the qualifying 
     project expenditure amount allocated under subsection (b)(3) 
     to such governmental unit for the calendar year as is 
     allocated by such governmental unit to such period under 
     subsection (b)(4).
       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--
       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and
       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be

[[Page 16457]]

     taken into account by such governmental unit under subsection 
     (a) for any calendar year in the credit period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $1,750,000,000.
       ``(C) Annual limit.--
       ``(i) In general.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--

       ``(I) the applicable limit, plus
       ``(II) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.

       ``(ii) Applicable limit.--For purposes of clause (i), the 
     applicable limit for any calendar year is--

       ``(I) in the case of calendar years 2007 through 2016, 
     $100,000,000,
       ``(II) in the case of calendar year 2017 or 2018, 
     $200,000,000,
       ``(III) in the case of calendar year 2019, $150,000,000,
       ``(IV) in the case of calendar year 2020 or 2021, 
     $100,000,000, and
       ``(V) in the case of any calendar year after 2021, zero.

       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

       ``(I) such excess, or
       ``(II) the qualifying project expenditure amount for such 
     calendar year, reduced by

       ``(ii) the aggregate amount allocated under this 
     subparagraph for all preceding calendar years.
       ``(4) Allocation to payroll periods.--Each New York Liberty 
     Zone governmental unit which has been allocated a portion of 
     the qualifying project expenditure amount under paragraph (3) 
     for a calendar year may allocate such portion to payroll 
     periods beginning in such calendar year as such governmental 
     unit determines appropriate.
       ``(c) Carryover of Unused Allocations.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     the amount allocated under subsection (b)(3) to a New York 
     Liberty Zone governmental unit for any calendar year exceeds 
     the aggregate taxes imposed by section 3402 for which such 
     governmental unit is liable under section 3403 for periods 
     beginning in such year, such excess shall be carried to the 
     succeeding calendar year and added to the allocation of such 
     governmental unit for such succeeding calendar year. No 
     amount may be carried under the preceding sentence to a 
     calendar year after 2026.
       ``(2) Reallocation.--If a New York Liberty Zone 
     governmental unit does not use an amount allocated to it 
     under subsection (b)(3) within the time prescribed by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York, then such amount shall after such time 
     be treated for purposes of subsection (b)(3) in the same 
     manner as if it had never been allocated.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Credit period.--The term `credit period' means the 
     15-year period beginning on January 1, 2007.
       ``(2) New york liberty zone governmental unit.--The term 
     `New York Liberty Zone governmental unit' means--
       ``(A) the State of New York,
       ``(B) the City of New York, New York, and
       ``(C) any agency or instrumentality of such State or City.
       ``(3) Treatment of funds.--Any expenditure for a qualifying 
     project taken into account for purposes of the credit under 
     this section shall be considered State and local funds for 
     the purpose of any Federal program.
       ``(4) Treatment of credit amounts for purposes of 
     withholding taxes.--For purposes of this title, a New York 
     Liberty Zone governmental unit shall be treated as having 
     paid to the Secretary, on the day on which wages are paid to 
     employees, an amount equal to the amount of the credit 
     allowed to such entity under subsection (a) with respect to 
     such wages, but only if such governmental unit deducts and 
     withholds wages for such payroll period under section 3401 
     (relating to wage withholding).
       ``(e) Reporting.--The Governor of the State of New York and 
     the Mayor of the City of New York, New York, shall jointly 
     submit to the Secretary an annual report--
       ``(1) which certifies--
       ``(A) the qualifying project expenditure amount for the 
     calendar year, and
       ``(B) the amount allocated to each New York Liberty Zone 
     governmental unit under subsection (b)(3) for the calendar 
     year, and
       ``(2) includes such other information as the Secretary may 
     require to carry out this section.
       ``(f) Guidance.--The Secretary may prescribe such guidance 
     as may be necessary or appropriate to ensure compliance with 
     the purposes of this section.
       ``(g) Termination.--No credit shall be allowed under 
     subsection (a) for any calender year after 2026.''.
       (b) Termination of Certain New York Liberty Zone 
     Benefits.--
       (1) Special allowance and expensing.--Section 
     1400K(b)(2)(A)(v), as redesignated by subsection (a), is 
     amended by striking ``the termination date'' and inserting 
     ``the date of the enactment of the Estate Tax and Extension 
     of Tax Relief Act of 2006 or the termination date if pursuant 
     to a binding contract in effect on such enactment date''.
       (2) Leasehold.--Section 1400K(c)(2)(B), as so redesignated, 
     is amended by striking ``before January 1, 2007'' and 
     inserting ``on or before the date of the enactment of the 
     Estate Tax and Extension of Tax Relief Act of 2006 or before 
     January 1, 2007, if pursuant to a binding contract in effect 
     on such enactment date''.
       (c) Conforming Amendments.--
       (1) Section 38(c)(3)(B) is amended by striking ``section 
     1400L(a)'' and inserting ``section 1400K(a)''.
       (2) Section 168(k)(2)(D)(ii) is amended by striking 
     ``section 1400L(c)(2)'' and inserting ``1400K(c)(2)''.
       (3) The table of sections for part I of subchapter Y of 
     chapter 1 is amended by striking ``1400L'' and inserting 
     ``1400K''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to periods 
     beginning after December 31, 2006.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall take effect as if included in section 301 of the Job 
     Creation and Worker Assistance Act of 2002.

     SEC. 221. EXTENSION OF BONUS DEPRECIATION FOR CERTAIN 
                   QUALIFIED GULF OPPORTUNITY ZONE PROPERTY.

       (a) In General.--Subsection (d) of section 1400N is amended 
     by adding at the end the following new paragraph:
       ``(6) Extension for certain property.--
       ``(A) In general.--In the case of any specified Gulf 
     Opportunity Zone extension property, paragraph (2)(A) shall 
     be applied without regard to clause (v) thereof.
       ``(B) Specified gulf opportunity zone extension property.--
     For purposes of this paragraph, the term `specified Gulf 
     Opportunity Zone extension property' means property--
       ``(i) substantially all of the use of which is in one or 
     more specified portions of the GO Zone, and
       ``(ii) which is--

       ``(I) nonresidential real property or residential rental 
     property which is placed in service by the taxpayer on or 
     before December 31, 2009, or
       ``(II) in the case of a taxpayer who places a building 
     described in subclause (I) in service on or before December 
     31, 2009, property described in section 168(k)(2)(A)(i) if 
     substantially all of the use of such property is in such 
     building and such property is placed in service by the 
     taxpayer not later than 90 days after such building is placed 
     in service.

       ``(C) Specified portions of the go zone.--For purposes of 
     this paragraph, the term `specified portions of the GO Zone' 
     means those portions of the GO Zone which are in any county 
     or parish which is identified by the Secretary as being a 
     county or parish in which hurricanes occurring during 2005 
     damaged (in the aggregate) more than 40 percent of the 
     housing units in such county or parish which were occupied 
     (determined according to the 2000 Census).''.
       (b) Extension Not Applicable to Increased Section 179 
     Expensing.--Paragraph (2) of section 1400N(e) is amended by 
     inserting ``without regard to subsection (d)(6)'' after 
     ``subsection (d)(2)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 101 of the Gulf 
     Opportunity Zone Act of 2005.

     SEC. 222. AUTHORITY FOR UNDERCOVER OPERATIONS.

       Paragraph (6) of section 7608(c) (relating to application 
     of section) is amended by striking ``2007'' both places it 
     appears and inserting ``2008''.

     SEC. 223. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION.

       (a) Disclosures To Facilitate Combined Employment Tax 
     Reporting.--
       (1) In general.--Subparagraph (B) of section 6103(d)(5) 
     (relating to termination) is amended by striking ``2006'' and 
     inserting ``2007''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to disclosures after December 31, 2006.
       (b) Disclosures Relating to Terrorist Activities.--
       (1) In general.--Clause (iv) of section 6103(i)(3)(C) and 
     subparagraph (E) of section 6103(i)(7) are each amended by 
     striking ``2006'' and inserting ``2007''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to disclosures after December 31, 2006.
       (c) Disclosures Relating to Student Loans.--
       (1) In general.--Subparagraph (D) of section 6103(l)(13) 
     (relating to termination) is amended by striking ``2006'' and 
     inserting ``2007''.

[[Page 16458]]

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to requests made after December 31, 2006.

                      Subtitle B--Other Provisions

     SEC. 231. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subsection (d) of section 199 (relating to 
     definitions and special rules) is amended by redesignating 
     paragraph (8) as paragraph (9) and by inserting after 
     paragraph (7) the following new paragraph:
       ``(8) Treatment of activities in puerto rico.--
       ``(A) In general.--In the case of any taxpayer with gross 
     receipts for any taxable year from sources within the 
     Commonwealth of Puerto Rico, if all of such receipts are 
     taxable under section 1 or 11 for such taxable year, then for 
     purposes of determining the domestic production gross 
     receipts of such taxpayer for such taxable year under 
     subsection (c)(4), the term `United States' shall include the 
     Commonwealth of Puerto Rico.
       ``(B) Special rule for applying wage limitation.--In the 
     case of any taxpayer described in subparagraph (A), for 
     purposes of applying the limitation under subsection (b) for 
     any taxable year, the determination of W-2 wages of such 
     taxpayer shall be made without regard to any exclusion under 
     section 3401(a)(8) for remuneration paid for services 
     performed in Puerto Rico.
       ``(C) Termination.--This paragraph shall apply only with 
     respect to the first 2 taxable years of the taxpayer 
     beginning after December 31, 2005, and before January 1, 
     2008.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 232. CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY MADE 
                   REFUNDABLE AFTER PERIOD OF YEARS.

       (a) In General.--Section 53 (relating to credit for prior 
     year minimum tax liability) is amended by adding at the end 
     the following new subsection:
       ``(e) Special Rule for Individuals With Long-Term Unused 
     Credits.--
       ``(1) In general.--If an individual has a long-term unused 
     minimum tax credit for any taxable year beginning before 
     January 1, 2013, the amount determined under subsection (c) 
     for such taxable year shall not be less than the AMT 
     refundable credit amount for such taxable year.
       ``(2) Amt refundable credit amount.--For purposes of 
     paragraph (1)--
       ``(A) In general.--The term `AMT refundable credit amount' 
     means, with respect to any taxable year, the amount equal to 
     the greater of--
       ``(i) the lesser of--

       ``(I) $5,000, or
       ``(II) the amount of long-term unused minimum tax credit 
     for such taxable year, or

       ``(ii) 20 percent of the amount of such credit.
       ``(B) Phaseout of amt refundable credit amount.--
       ``(i) In general.--In the case of an individual whose 
     adjusted gross income for any taxable year exceeds the 
     threshold amount (within the meaning of section 
     151(d)(3)(C)), the AMT refundable credit amount determined 
     under subparagraph (A) for such taxable year shall be reduced 
     by the applicable percentage (within the meaning of section 
     151(d)(3)(B)).
       ``(ii) Adjusted gross income.--For purposes of clause (i), 
     adjusted gross income shall be determined without regard to 
     sections 911, 931, and 933.
       ``(3) Long-term unused minimum tax credit.--
       ``(A) In general.--For purposes of this subsection, the 
     term `long-term unused minimum tax credit' means, with 
     respect to any taxable year, the portion of the minimum tax 
     credit determined under subsection (b) attributable to the 
     adjusted net minimum tax for taxable years before the 3rd 
     taxable year immediately preceding such taxable year.
       ``(B) First-in, first-out ordering rule.--For purposes of 
     subparagraph (A), credits shall be treated as allowed under 
     subsection (a) on a first-in, first-out basis.
       ``(4) Credit refundable.--For purposes of this title (other 
     than this section), the credit allowed by reason of this 
     subsection shall be treated as if it were allowed under 
     subpart C.''.
       (b) Conforming Amendments.--
       (1) Section 6211(b)(4)(A) is amended by striking ``and 34'' 
     and inserting ``34, and 53(e)''.
       (2) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting ``or 53(e)'' after 
     ``section 35''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 233. RETURNS REQUIRED IN CONNECTION WITH CERTAIN 
                   OPTIONS.

       (a) In General.--So much of section 6039(a) as follows 
     paragraph (2) is amended to read as follows:

     ``shall, for such calendar year, make a return at such time 
     and in such manner, and setting forth such information, as 
     the Secretary may by regulations prescribe.''.
       (b) Statements to Persons With Respect to Whom Information 
     Is Furnished.--Section 6039 is amended by redesignating 
     subsections (b) and (c) as subsection (c) and (d), 
     respectively, and by inserting after subsection (a) the 
     following new subsection:
       ``(b) Statements to Be Furnished to Persons With Respect to 
     Whom Information Is Reported.--Every corporation making a 
     return under subsection (a) shall furnish to each person 
     whose name is set forth in such return a written statement 
     setting forth such information as the Secretary may by 
     regulations prescribe. The written statement required under 
     the preceding sentence shall be furnished to such person on 
     or before January 31 of the year following the calendar year 
     for which the return under subsection (a) was made.''.
       (c) Conforming Amendments.--
       (1) Section 6724(d)(1)(B) is amended by striking ``or'' at 
     the end of clause (xvii), by striking ``and'' at the end of 
     clause (xviii) and inserting ``or'', and by adding at the end 
     the following new clause:
       ``(xix) section 6039(a) (relating to returns required with 
     respect to certain options), and''.
       (2) Section 6724(d)(2)(B) is amended by striking ``section 
     6039(a)'' and inserting ``section 6039(b)''.
       (3) The heading of section 6039 and the item relating to 
     such section in the table of sections of subpart A of part 
     III of subchapter A of chapter 61 of such Code are each 
     amended by striking ``Information'' and inserting 
     ``Returns''.
       (4) The heading of subsection (a) of section 6039 is 
     amended by striking ``Furnishing of Information'' and 
     inserting ``Requirement of Reporting''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after the date of the 
     enactment of this Act.

     SEC. 234. PARTIAL EXPENSING FOR ADVANCED MINE SAFETY 
                   EQUIPMENT.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 179D the following new 
     section:

     ``SEC. 179E. ELECTION TO EXPENSE ADVANCED MINE SAFETY 
                   EQUIPMENT.

       ``(a) Treatment as Expenses.--A taxpayer may elect to treat 
     50 percent of the cost of any qualified advanced mine safety 
     equipment property as an expense which is not chargeable to 
     capital account. Any cost so treated shall be allowed as a 
     deduction for the taxable year in which the qualified 
     advanced mine safety equipment property is placed in service.
       ``(b) Election.--
       ``(1) In general.--An election under this section for any 
     taxable year shall be made on the taxpayer's return of the 
     tax imposed by this chapter for the taxable year. Such 
     election shall specify the advanced mine safety equipment 
     property to which the election applies and shall be made in 
     such manner as the Secretary may by regulations prescribe.
       ``(2) Election irrevocable.--Any election made under this 
     section may not be revoked except with the consent of the 
     Secretary.
       ``(c) Qualified Advanced Mine Safety Equipment Property.--
     For purposes of this section, the term `qualified advanced 
     mine safety equipment property' means any advanced mine 
     safety equipment property for use in any underground mine 
     located in the United States--
       ``(1) the original use of which commences with the 
     taxpayer, and
       ``(2) which is placed in service by the taxpayer after the 
     date of the enactment of this section.
       ``(d) Advanced Mine Safety Equipment Property.--For 
     purposes of this section, the term `advanced mine safety 
     equipment property' means any of the following:
       ``(1) Emergency communication technology or device which is 
     used to allow a miner to maintain constant communication with 
     an individual who is not in the mine.
       ``(2) Electronic identification and location device which 
     allows an individual who is not in the mine to track at all 
     times the movements and location of miners working in or at 
     the mine.
       ``(3) Emergency oxygen-generating, self-rescue device which 
     provides oxygen for at least 90 minutes.
       ``(4) Pre-positioned supplies of oxygen which (in 
     combination with self-rescue devices) can be used to provide 
     each miner on a shift, in the event of an accident or other 
     event which traps the miner in the mine or otherwise 
     necessitates the use of such a self-rescue device, the 
     ability to survive for at least 48 hours.
       ``(5) Comprehensive atmospheric monitoring system which 
     monitors the levels of carbon monoxide, methane, and oxygen 
     that are present in all areas of the mine and which can 
     detect smoke in the case of a fire in a mine.
       ``(e) Coordination With Section 179.--No expenditures shall 
     be taken into account under subsection (a) with respect to 
     the portion of the cost of any property specified in an 
     election under section 179.
       ``(f) Reporting.--No deduction shall be allowed under 
     subsection (a) to any taxpayer for any taxable year unless 
     such taxpayer files with the Secretary a report containing 
     such information with respect to the operation of the mines 
     of the taxpayer as the Secretary shall require.
       ``(g) Termination.--This section shall not apply to 
     property placed in service after December 31, 2008.''.

[[Page 16459]]

       (b) Conforming Amendments.--
       (1) Section 263(a)(1) is amended by striking ``or'' at the 
     end of subparagraph (J), by striking the period at the end of 
     subparagraph (K) and inserting ``, or'', and by inserting 
     after subparagraph (K) the following new subparagraph:
       ``(L) expenditures for which a deduction is allowed under 
     section 179E.''.
       (2) Section 312(k)(3)(B) is amended by striking ``or 179D'' 
     each place it appears in the heading and text thereof and 
     inserting ``179D, or 179E''.
       (3) Paragraphs (2)(C) and (3)(C) of section 1245(a) are 
     each amended by inserting ``179E,'' after ``179D,''.
       (4) The table of sections for part VI of subchapter B of 
     chapter 1 is amended by inserting after the item relating to 
     section 179D the following new item:

``Sec. 179E. Election to expense advanced mine safety equipment.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred after the date of the 
     enactment of this Act.

     SEC. 235. MINE RESCUE TEAM TRAINING TAX CREDIT.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45N. MINE RESCUE TEAM TRAINING CREDIT.

       ``(a) Amount of Credit.--For purposes of section 38, the 
     mine rescue team training credit determined under this 
     section with respect to each qualified mine rescue team 
     employee of an eligible employer for any taxable year is an 
     amount equal to the lesser of--
       ``(1) 20 percent of the amount paid or incurred by the 
     taxpayer during the taxable year with respect to the training 
     program costs of such qualified mine rescue team employee 
     (including wages of such employee while attending such 
     program), or
       ``(2) $10,000.
       ``(b) Qualified Mine Rescue Team Employee.--For purposes of 
     this section, the term `qualified mine rescue team employee' 
     means with respect to any taxable year any full-time employee 
     of the taxpayer who is--
       ``(1) a miner eligible for more than 6 months of such 
     taxable year to serve as a mine rescue team member as a 
     result of completing, at a minimum, an initial 20-hour course 
     of instruction as prescribed by the Mine Safety and Health 
     Administration's Office of Educational Policy and 
     Development, or
       ``(2) a miner eligible for more than 6 months of such 
     taxable year to serve as a mine rescue team member by virtue 
     of receiving at least 40 hours of refresher training in such 
     instruction.
       ``(c) Eligible Employer.--For purposes of this section, the 
     term `eligible employer' means any taxpayer which employs 
     individuals as miners in underground mines in the United 
     States.
       ``(d) Wages.--For purposes of this section, the term 
     `wages' has the meaning given to such term by subsection (b) 
     of section 3306 (determined without regard to any dollar 
     limitation contained in such section).
       ``(e) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 2008.''.
       (b) Credit Made Part of General Business Credit.--Section 
     38(b) is amended by striking ``and'' at the end of paragraph 
     (29), by striking the period at the end of paragraph (30) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(31) the mine rescue team training credit determined 
     under section 45N(a).''.
       (c) No Double Benefit.--Section 280C is amended by adding 
     at the end the following new subsection:
       ``(e) Mine Rescue Team Training Credit.--No deduction shall 
     be allowed for that portion of the expenses otherwise 
     allowable as a deduction for the taxable year which is equal 
     to the amount of the credit determined for the taxable year 
     under section 45N(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. 45N. Mine rescue team training credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 236. WHISTLEBLOWER REFORMS.

       (a) Awards to Whistleblowers.--
       (1) In general.--Section 7623 (relating to expenses of 
     detection of underpayments and fraud, etc.) is amended--
       (A) by striking ``The Secretary'' and inserting ``(a) In 
     General.--The Secretary'',
       (B) by striking ``and'' at the end of paragraph (1) and 
     inserting ``or'',
       (C) by striking ``(other than interest)'', and
       (D) by adding at the end the following new subsection:
       ``(b) Awards to Whistleblowers.--
       ``(1) In general.--If the Secretary proceeds with any 
     administrative or judicial action described in subsection (a) 
     based on information brought to the Secretary's attention by 
     an individual, such individual shall, subject to paragraph 
     (2), receive as an award at least 15 percent but not more 
     than 30 percent of the collected proceeds (including 
     penalties, interest, additions to tax, and additional 
     amounts) resulting from the action (including any related 
     actions) or from any settlement in response to such action. 
     The determination of the amount of such award by the 
     Whistleblower Office shall depend upon the extent to which 
     the individual substantially contributed to such action.
       ``(2) Award in case of less substantial contribution.--
       ``(A) In general.--In the event the action described in 
     paragraph (1) is one which the Whistleblower Office 
     determines to be based principally on disclosures of specific 
     allegations (other than information provided by the 
     individual described in paragraph (1)) resulting from a 
     judicial or administrative hearing, from a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, the Whistleblower Office may award such sums as it 
     considers appropriate, but in no case more than 10 percent of 
     the collected proceeds (including penalties, interest, 
     additions to tax, and additional amounts) resulting from the 
     action (including any related actions) or from any settlement 
     in response to such action, taking into account the 
     significance of the individual's information and the role of 
     such individual and any legal representative of such 
     individual in contributing to such action.
       ``(B) Nonapplication of paragraph where individual is 
     original source of information.--Subparagraph (A) shall not 
     apply if the information resulting in the initiation of the 
     action described in paragraph (1) was originally provided by 
     the individual described in paragraph (1).
       ``(3) Reduction in or denial of award.--If the 
     Whistleblower Office determines that the claim for an award 
     under paragraph (1) or (2) is brought by an individual who 
     planned and initiated the actions that led to the 
     underpayment of tax or actions described in subsection 
     (a)(2), then the Whistleblower Office may appropriately 
     reduce such award. If such individual is convicted of 
     criminal conduct arising from the role described in the 
     preceding sentence, the Whistleblower Office shall deny any 
     award.
       ``(4) Appeal of award determination.--Any determination 
     regarding an award under paragraph (1), (2), or (3) may, 
     within 30 days of such determination, be appealed to the Tax 
     Court (and the Tax Court shall have jurisdiction with respect 
     to such matter).
       ``(5) Application of this subsection.--This subsection 
     shall apply with respect to any action--
       ``(A) against any taxpayer, but in the case of any 
     individual, only if such individual's gross income exceeds 
     $200,000 for any taxable year subject to such action, and
       ``(B) if the tax, penalties, interest, additions to tax, 
     and additional amounts in dispute exceed $2,000,000.
       ``(6) Additional rules.--
       ``(A) No contract necessary.--No contract with the Internal 
     Revenue Service is necessary for any individual to receive an 
     award under this subsection.
       ``(B) Representation.--Any individual described in 
     paragraph (1) or (2) may be represented by counsel.
       ``(C) Submission of information.--No award may be made 
     under this subsection based on information submitted to the 
     Secretary unless such information is submitted under penalty 
     of perjury.''.
       (2) Assignment to special trial judges.--
       (A) In general.--Section 7443A(b) (relating to proceedings 
     which may be assigned to special trial judges) is amended by 
     striking ``and'' at the end of paragraph (4), by 
     redesignating paragraph (5) as paragraph (6), and by 
     inserting after paragraph (4) the following new paragraph:
       ``(5) any proceeding under section 7623(b)(4), and''.
       (B) Conforming amendment.--Section 7443A(c) is amended by 
     striking ``or (4)'' and inserting ``(4), or (5)''.
       (3) Deduction allowed whether or not taxpayer itemizes.--
     Subsection (a) of section 62 (relating to general rule 
     defining adjusted gross income) is amended by inserting after 
     paragraph (20) the following new paragraph:
       ``(21) Attorneys fees relating to awards to 
     whistleblowers.--Any deduction allowable under this chapter 
     for attorney fees and court costs paid by, or on behalf of, 
     the taxpayer in connection with any award under section 
     7623(b) (relating to awards to whistleblowers). The preceding 
     sentence shall not apply to any deduction in excess of the 
     amount includible in the taxpayer's gross income for the 
     taxable year on account of such award.''.
       (b) Whistleblower Office.--
       (1) In general.--Not later than the date which is 12 months 
     after the date of the enactment of this Act, the Secretary of 
     the Treasury shall issue guidance for the operation of a 
     whistleblower program to be administered in the Internal 
     Revenue Service by an office to be known as the 
     ``Whistleblower Office'' which--
       (A) shall at all times operate at the direction of the 
     Commissioner of Internal Revenue and coordinate and consult 
     with other divisions in the Internal Revenue Service as 
     directed by the Commissioner of Internal Revenue,
       (B) shall analyze information received from any individual 
     described in section 7623(b) of the Internal Revenue Code of 
     1986

[[Page 16460]]

     and either investigate the matter itself or assign it to the 
     appropriate Internal Revenue Service office, and
       (C) in its sole discretion, may ask for additional 
     assistance from such individual or any legal representative 
     of such individual.
       (2) Request for assistance.--The guidance issued under 
     paragraph (1) shall specify that any assistance requested 
     under paragraph (1)(C) shall be under the direction and 
     control of the Whistleblower Office or the office assigned to 
     investigate the matter under paragraph (1)(A). No individual 
     or legal representative whose assistance is so requested may 
     by reason of such request represent himself or herself as an 
     employee of the Federal Government.
       (c) Report by Secretary.--The Secretary of the Treasury 
     shall each year conduct a study and report to Congress on the 
     use of section 7623 of the Internal Revenue Code of 1986, 
     including--
       (1) an analysis of the use of such section during the 
     preceding year and the results of such use, and
       (2) any legislative or administrative recommendations 
     regarding the provisions of such section and its application.
       (d) Effective Date.--The amendments made by subsection (a) 
     shall apply to information provided on or after the date of 
     the enactment of this Act.

     SEC. 237. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect, and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(f) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 238. ADDITION OF MENINGOCOCCAL AND HUMAN PAPILLOMAVIRUS 
                   VACCINES TO LIST OF TAXABLE VACCINES.

       (a) Meningococcal Vaccine.--Section 4132(a)(1) (defining 
     taxable vaccine) is amended by adding at the end the 
     following new subparagraph:
       ``(O) Any meningococcal vaccine.''.
       (b) Human Papillomavirus Vaccine.--Section 4132(a)(1), as 
     amended by subsection (a), is amended by adding at the end 
     the following new subparagraph:
       ``(P) Any vaccine against the human papillomavirus.''.
       (c) Effective Date.--
       (1) Sales, etc.--The amendments made by this section shall 
     apply to sales and uses on or after the first day of the 
     first month which begins more than 4 weeks after the date of 
     the enactment of this Act.
       (2) Deliveries.--For purposes of paragraph (1) and section 
     4131 of the Internal Revenue Code of 1986, in the case of 
     sales on or before the effective date described in such 
     paragraph for which delivery is made after such date, the 
     delivery date shall be considered the sale date.

     SEC. 239. CLARIFICATION OF TAXATION OF CERTAIN SETTLEMENT 
                   FUNDS MADE PERMANENT.

       (a) In General.--Subsection (g) of section 468B, as amended 
     by section 201 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking paragraph 
     (3).
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 201 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 240. MODIFICATION OF ACTIVE BUSINESS DEFINITION UNDER 
                   SECTION 355 MADE PERMANENT.

       (a) In General.--Subparagraphs (A) and (D) of section 
     355(b)(3), as amended by section 202 of the Tax Increase 
     Prevention and Reconciliation Act of 2005, are each amended 
     by striking ``and on or before December 31, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 202 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 241. REVISION OF STATE VETERANS LIMIT MADE PERMANENT.

       (a) In General.--Subparagraph (B) of section 143(l)(3), as 
     amended by section 203 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking clause 
     (iv).
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 203 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 242. CAPITAL GAINS TREATMENT FOR CERTAIN SELF-CREATED 
                   MUSICAL WORKS MADE PERMANENT.

       (a) In General.--Paragraph (3) of section 1221(b), as 
     amended by section 204 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking ``before 
     January 1, 2011,''.

[[Page 16461]]

       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 204 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 243. REDUCTION IN MINIMUM VESSEL TONNAGE WHICH QUALIFIES 
                   FOR TONNAGE TAX MADE PERMANENT.

       (a) In General.--Paragraph (4) of section 1355(a), as 
     amended by section 205 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking ``10,000 
     (6,000, in the case of taxable years beginning after December 
     31, 2005, and ending before January 1, 2011)'' and inserting 
     ``6,000''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 205 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 244. MODIFICATION OF SPECIAL ARBITRAGE RULE FOR CERTAIN 
                   FUNDS MADE PERMANENT.

       (a) In General.--Section 206 of the Tax Increase Prevention 
     and Reconciliation Act of 2005 is amended by striking ``and 
     before August 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 206 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 245. GREAT LAKES DOMESTIC SHIPPING TO NOT DISQUALIFY 
                   VESSEL FROM TONNAGE TAX.

       (a) In General.--Section 1355 (relating to definitions and 
     special rules) is amended by redesignating subsection (g) as 
     subsection (h) and by inserting after subsection (f) the 
     following new subsection:
       ``(g) Great Lakes Domestic Shipping to Not Disqualify 
     Vessel.--
       ``(1) In general.--If the electing corporation elects (at 
     such time and in such manner as the Secretary may require) to 
     apply this subsection for any taxable year to any qualifying 
     vessel which is used in qualified zone domestic trade during 
     the taxable year--
       ``(A) solely for purposes of subsection (a)(4), such use 
     shall be treated as use in United States foreign trade (and 
     not as use in United States domestic trade), and
       ``(B) subsection (f) shall not apply with respect to such 
     vessel for such taxable year.
       ``(2) Effect of temporarily operating vessel in united 
     states domestic trade.--In the case of a qualifying vessel to 
     which this subsection applies--
       ``(A) In general.--An electing corporation shall be treated 
     as using such vessel in qualified zone domestic trade during 
     any period of temporary use in the United States domestic 
     trade (other than qualified zone domestic trade) if the 
     electing corporation gives timely notice to the Secretary 
     stating--
       ``(i) that it temporarily operates or has operated in the 
     United States domestic trade (other than qualified zone 
     domestic trade) a qualifying vessel which had been used in 
     the United States foreign trade or qualified zone domestic 
     trade, and
       ``(ii) its intention to resume operation of the vessel in 
     the United States foreign trade or qualified zone domestic 
     trade.
       ``(B) Notice.--Notice shall be deemed timely if given not 
     later than the due date (including extensions) for the 
     corporation's tax return for the taxable year in which the 
     temporary cessation begins.
       ``(C) Period disregard in effect.--The period of temporary 
     use under subparagraph (A) continues until the earlier of the 
     date of which--
       ``(i) the electing corporation abandons its intention to 
     resume operations of the vessel in the United States foreign 
     trade or qualified zone domestic trade, or
       ``(ii) the electing corporation resumes operation of the 
     vessel in the United States foreign trade or qualified zone 
     domestic trade.
       ``(D) No disregard if domestic trade use exceeds 30 days.--
     Subparagraph (A) shall not apply to any qualifying vessel 
     which is operated in the United States domestic trade (other 
     than qualified zone domestic trade) for more than 30 days 
     during the taxable year.
       ``(3) Allocation of income and deductions to qualifying 
     shipping activities.--In the case of a qualifying vessel to 
     which this subsection applies, the Secretary shall prescribe 
     rules for the proper allocation of income, expenses, losses, 
     and deductions between the qualified shipping activities and 
     the other activities of such vessel.
       ``(4) Qualified zone domestic trade.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified zone domestic trade' 
     means the transportation of goods or passengers between 
     places in the qualified zone if such transportation is in the 
     United States domestic trade.
       ``(B) Qualified zone.--The term `qualified zone' means the 
     Great Lakes Waterway and the St. Lawrence Seaway.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 246. USE OF QUALIFIED MORTGAGE BONDS TO FINANCE 
                   RESIDENCES FOR VETERANS WITHOUT REGARD TO 
                   FIRST-TIME HOMEBUYER REQUIREMENT.

       (a) In General.--Section 143(d)(2) (relating to exceptions 
     to 3-year requirement) is amended by striking ``and'' at the 
     end of subparagraph (B), by adding ``and'' at the end of 
     subparagraph (C), and by inserting after subparagraph (C) the 
     following new subparagraph:
       ``(D) in the case of bonds issued after the date of the 
     enactment of this subparagraph and before January 1, 2008, 
     financing of any residence for a veteran (as defined in 
     section 101 of title 38, United States Code), if such veteran 
     has not previously qualified for and received such financing 
     by reason of this subparagraph,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 247. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL 
                   RESIDENCE BY CERTAIN EMPLOYEES OF THE 
                   INTELLIGENCE COMMUNITY.

       (a) In General.--Subparagraph (A) of section 121(d)(9) 
     (relating to exclusion of gain from sale of principal 
     residence) is amended by striking ``duty'' and all that 
     follows and inserting ``duty--
       ``(i) as a member of the uniformed services,
       ``(ii) as a member of the Foreign Service of the United 
     States, or
       ``(iii) as an employee of the intelligence community.''.
       (b) Employee of Intelligence Community Defined.--
     Subparagraph (C) of section 121(d)(9) is amended by 
     redesignating clause (iv) as clause (v) and by inserting 
     after clause (iii) the following new clause:
       ``(iv) Employee of intelligence community.--The term 
     `employee of the intelligence community' means an employee 
     (as defined by section 2105 of title 5, United States Code) 
     of--

       ``(I) the Office of the Director of National Intelligence,
       ``(II) the Central Intelligence Agency,
       ``(III) the National Security Agency,
       ``(IV) the Defense Intelligence Agency,
       ``(V) the National Geospatial-Intelligence Agency,
       ``(VI) the National Reconnaissance Office,
       ``(VII) any other office within the Department of Defense 
     for the collection of specialized national intelligence 
     through reconnaissance programs,
       ``(VIII) any of the intelligence elements of the Army, the 
     Navy, the Air Force, the Marine Corps, the Federal Bureau of 
     Investigation, the Department of Treasury, the Department of 
     Energy, and the Coast Guard,
       ``(IX) the Bureau of Intelligence and Research of the 
     Department of State, or
       ``(X) any of the elements of the Department of Homeland 
     Security concerned with the analyses of foreign intelligence 
     information.''.

       (c) Special Rule.--Subparagraph (C) of section 121(d)(9), 
     as amended by subsection (b), is amended by adding at the end 
     the following new clause:
       ``(vi) Special rule relating to intelligence community.--An 
     employee of the intelligence community shall not be treated 
     as serving on qualified extended duty unless such duty is at 
     a duty station located outside the United States.''.
       (d) Conforming Amendment.--The heading for section 
     121(d)(9) is amended to read as follows: ``Uniformed 
     services, foreign service, and intelligence community''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to sales or exchanges after the date of the 
     enactment of this Act and before January 1, 2011.

     SEC. 248. TREATMENT OF COKE AND COKE GAS.

       (a) Nonapplication of Phaseout.--Section 45K(g)(2) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Nonapplication of phaseout.--Subsection (b)(1) shall 
     not apply.''.
       (b) Clarification of Qualifying Facility.--Section 
     45K(g)(1) is amended by inserting ``(other than from 
     petroleum based products)'' after ``coke or coke gas''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 1321 of the 
     Energy Policy Act of 2005.

     SEC. 249. SALE OF PROPERTY BY JUDICIAL OFFICERS.

       (a) In General.--Section 1043(b) (relating to the sale of 
     property to comply with conflict-of-interest requirements) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by inserting ``, or a judicial 
     officer,'' after ``an officer or employee of the executive 
     branch''; and
       (B) in subparagraph (B), by inserting ``judicial canon,'' 
     after ``any statute, regulation, rule,'';
       (2) in paragraph (2)--
       (A) in subparagraph (A), by inserting ``judicial canon,'' 
     after ``any Federal conflict of interest statute, regulation, 
     rule,''; and
       (B) in subparagraph (B), by inserting after ``the Director 
     of the Office of Government Ethics,'' the following: ``in the 
     case of executive branch officers or employees, or by the 
     Judicial Conference of the United States (or its designee), 
     in the case of judicial officers,''; and
       (3) in paragraph (5)(B), by inserting ``judicial canon,'' 
     after ``any statute, regulation, rule,''.
       (b) Judicial Officer Defined.--Section 1043(b) is amended 
     by adding at the end the following new paragraph:
       ``(6) Judicial officer.--The term `judicial officer' means 
     the Chief Justice of the United States, the Associate 
     Justices of the Supreme Court, and the judges of the United 
     States courts of appeals, United States district courts, 
     including the district courts in

[[Page 16462]]

     Guam, the Northern Mariana Islands, and the Virgin Islands, 
     Court of Appeals for the Federal Circuit, Court of 
     International Trade, Tax Court, Court of Federal Claims, 
     Court of Appeals for Veterans Claims, United States Court of 
     Appeals for the Armed Forces, and any court created by Act of 
     Congress, the judges of which are entitled to hold office 
     during good behavior.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales after the date of enactment of this Act.

     SEC. 250. PREMIUMS FOR MORTGAGE INSURANCE.

       (a) In General.--Section 163(h)(3) (relating to qualified 
     residence interest) is amended by adding at the end the 
     following new subparagraph:
       ``(E) Mortgage insurance premiums treated as interest.--
       ``(i) In general.--Premiums paid or accrued for qualified 
     mortgage insurance by a taxpayer during the taxable year in 
     connection with acquisition indebtedness with respect to a 
     qualified residence of the taxpayer shall be treated for 
     purposes of this section as interest which is qualified 
     residence interest.
       ``(ii) Phaseout.--The amount otherwise treated as interest 
     under clause (i) shall be reduced (but not below zero) by 10 
     percent of such amount for each $1,000 ($500 in the case of a 
     married individual filing a separate return) (or fraction 
     thereof) that the taxpayer's adjusted gross income for the 
     taxable year exceeds $100,000 ($50,000 in the case of a 
     married individual filing a separate return).
       ``(iii) Limitation.--Clause (i) shall not apply with 
     respect to any mortgage insurance contracts issued before 
     January 1, 2007.
       ``(iv) Termination.--Clause (i) shall not apply to 
     amounts--

       ``(I) paid or accrued after December 31, 2007, or
       ``(II) properly allocable to any period after such date.''.

       (b) Definition and Special Rules.--Section 163(h)(4) 
     (relating to other definitions and special rules) is amended 
     by adding at the end the following new subparagraphs:
       ``(E) Qualified mortgage insurance.--The term `qualified 
     mortgage insurance' means--
       ``(i) mortgage insurance provided by the Veterans 
     Administration, the Federal Housing Administration, or the 
     Rural Housing Administration, and
       ``(ii) private mortgage insurance (as defined by section 2 
     of the Homeowners Protection Act of 1998 (12 U.S.C. 4901), as 
     in effect on the date of the enactment of this subparagraph).
       ``(F) Special rules for prepaid qualified mortgage 
     insurance.--Any amount paid by the taxpayer for qualified 
     mortgage insurance that is properly allocable to any mortgage 
     the payment of which extends to periods that are after the 
     close of the taxable year in which such amount is paid shall 
     be chargeable to capital account and shall be treated as paid 
     in such periods to which so allocated. No deduction shall be 
     allowed for the unamortized balance of such account if such 
     mortgage is satisfied before the end of its term. The 
     preceding sentences shall not apply to amounts paid for 
     qualified mortgage insurance provided by the Veterans 
     Administration or the Rural Housing Administration.''.
       (c) Information Returns Relating to Mortgage Insurance.--
     Section 6050H (relating to returns relating to mortgage 
     interest received in trade or business from individuals) is 
     amended by adding at the end the following new subsection:
       ``(h) Returns Relating to Mortgage Insurance Premiums.--
       ``(1) In general.--The Secretary may prescribe, by 
     regulations, that any person who, in the course of a trade or 
     business, receives from any individual premiums for mortgage 
     insurance aggregating $600 or more for any calendar year, 
     shall make a return with respect to each such individual. 
     Such return shall be in such form, shall be made at such 
     time, and shall contain such information as the Secretary may 
     prescribe.
       ``(2) Statement to be furnished to individuals with respect 
     to whom information is required.--Every person required to 
     make a return under paragraph (1) shall furnish to each 
     individual with respect to whom a return is made a written 
     statement showing such information as the Secretary may 
     prescribe. Such written statement shall be furnished on or 
     before January 31 of the year following the calendar year for 
     which the return under paragraph (1) was required to be made.
       ``(3) Special rules.--For purposes of this subsection--
       ``(A) rules similar to the rules of subsection (c) shall 
     apply, and
       ``(B) the term `mortgage insurance' means--
       ``(i) mortgage insurance provided by the Veterans 
     Administration, the Federal Housing Administration, or the 
     Rural Housing Administration, and
       ``(ii) private mortgage insurance (as defined by section 2 
     of the Homeowners Protection Act of 1998 (12 U.S.C. 4901), as 
     in effect on the date of the enactment of this 
     subsection).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or accrued after December 31, 
     2006.

     SEC. 251. MODIFICATION OF REFUNDS FOR KEROSENE USED IN 
                   AVIATION.

       (a) In General.--Paragraph (4) of section 6427(l) (relating 
     to nontaxable uses of diesel fuel and kerosene) is amended to 
     read as follows:
       ``(4) Refunds for kerosene used in aviation.--
       ``(A) Kerosene used in commercial aviation.--In the case of 
     kerosene used in commercial aviation (as defined in section 
     4083(b)) (other than supplies for vessels or aircraft within 
     the meaning of section 4221(d)(3)), paragraph (1) shall not 
     apply to so much of the tax imposed by section 4041 or 4081, 
     as the case may be, as is attributable to--
       ``(i) the Leaking Underground Storage Tank Trust Fund 
     financing rate imposed by such section, and
       ``(ii) so much of the rate of tax specified in section 
     4041(c) or 4081(a)(2)(A)(iii), as the case may be, as does 
     not exceed 4.3 cents per gallon.
       ``(B) Kerosene used in noncommercial aviation.--In the case 
     of kerosene used in aviation that is not commercial aviation 
     (as so defined) (other than any use which is exempt from the 
     tax imposed by section 4041(c) other than by reason of a 
     prior imposition of tax), paragraph (1) shall not apply to--
       ``(i) any tax imposed by section 4041(c), and
       ``(ii) so much of the tax imposed by section 4081 as is 
     attributable to--

       ``(I) the Leaking Underground Storage Tank Trust Fund 
     financing rate imposed by such section, and
       ``(II) so much of the rate of tax specified in section 
     4081(a)(2)(A)(iii) as does not exceed the rate specified in 
     section 4081(a)(2)(C)(ii).

       ``(C) Payments to ultimate, registered vendor.--
       ``(i) In general.--With respect to any kerosene used in 
     aviation (other than kerosene described in clause (ii) or 
     kerosene to which paragraph (5) applies), if the ultimate 
     purchaser of such kerosene waives (at such time and in such 
     form and manner as the Secretary shall prescribe) the right 
     to payment under paragraph (1) and assigns such right to the 
     ultimate vendor, then the Secretary shall pay the amount 
     which would be paid under paragraph (1) to such ultimate 
     vendor, but only if such ultimate vendor--

       ``(I) is registered under section 4101, and
       ``(II) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).

       ``(ii) Payments for kerosene used in noncommercial 
     aviation.--The amount which would be paid under paragraph (1) 
     with respect to any kerosene to which subparagraph (B) 
     applies shall be paid only to the ultimate vendor of such 
     kerosene. A payment shall be made to such vendor if such 
     vendor--

       ``(I) is registered under section 4101, and
       ``(II) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).''.

       (b) Conforming Amendments.--
       (1) Section 6427(l) is amended by striking paragraph (5) 
     and by redesignating paragraph (6) as paragraph (5).
       (2) Section 4082(d)(2)(B) is amended by striking ``section 
     6427(l)(6)(B)'' and inserting ``section 6427(l)(5)(B)''.
       (3) Section 6427(i)(4)(A) is amended--
       (A) by striking ``paragraph (4)(B), (5), or (6)'' each 
     place it appears and inserting ``paragraph (4)(C) or (5)'', 
     and
       (B) by striking ``(l)(5), and (l)(6)'' and inserting 
     ``(l)(4)(C)(ii), and (l)(5)''.
       (4) Section 6427(l)(1) is amended by striking ``paragraph 
     (4)(B)'' and inserting ``paragraph (4)(C)(i)''.
       (5) Section 9502(d) is amended--
       (A) in paragraph (2), by striking ``and (l)(5)'', and
       (B) in paragraph (3), by striking ``or (5)''.
       (6) Section 9503(c)(7) is amended--
       (A) by amending subparagraphs (A) and (B) to read as 
     follows:
       ``(A) 4.3 cents per gallon of kerosene subject to section 
     6427(l)(4)(A) with respect to which a payment has been made 
     by the Secretary under section 6427(l), and
       ``(B) 21.8 cents per gallon of kerosene subject to section 
     6427(l)(4)(B) with respect to which a payment has been made 
     by the Secretary under section 6427(l).'', and
       (B) in the matter following subparagraph (B), by striking 
     ``or (5)''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to kerosene sold after September 30, 2005.
       (2) Special rule for pending claims.--In the case of 
     kerosene sold for use in aviation (other than kerosene to 
     which section 6427(l)(4)(C)(ii) of the Internal Revenue Code 
     of 1986 (as added by subsection (a)) applies or kerosene to 
     which section 6427(l)(5) of such Code (as redesignated by 
     subsection (b)) applies) after September 30, 2005, and before 
     the date of the enactment of this Act, the ultimate purchaser 
     shall be treated as having waived the right to payment under 
     section 6427(l)(1) of such Code and as having assigned such 
     right to the ultimate vendor if such ultimate vendor has met 
     the requirements of subparagraph (A), (B), or (D) of section 
     6416(a)(1) of such Code.
       (d) Special Rule for Kerosene Used in Aviation on a Farm 
     for Farming Purposes.--
       (1) Refunds for purchases after december 31, 2004, and 
     before october 1, 2005.--The Secretary of the Treasury shall 
     pay to

[[Page 16463]]

     the ultimate purchaser of any kerosene which is used in 
     aviation on a farm for farming purposes and which was 
     purchased after December 31, 2004, and before October 1, 
     2005, an amount equal to the aggregate amount of tax imposed 
     on such fuel under section 4041 or 4081 of the Internal 
     Revenue Code of 1986, as the case may be, reduced by any 
     payment to the ultimate vendor under section 6427(l)(5)(C) of 
     such Code (as in effect on the day before the date of the 
     enactment of the Safe, Accountable, Flexible, Efficient 
     Transportation Equity Act: a Legacy for Users).
       (2) Use on a farm for farming purposes.--For purposes of 
     paragraph (1), kerosene shall be treated as used on a farm 
     for farming purposes if such kerosene is used for farming 
     purposes (within the meaning of section 6420(c)(3) of the 
     Internal Revenue Code of 1986) in carrying on a trade or 
     business on a farm situated in the United States. For 
     purposes of the preceding sentence, rules similar to the 
     rules of section 6420(c)(4) of such Code shall apply.
       (3) Time for filing claims.--No claim shall be allowed 
     under paragraph (1) unless the ultimate purchaser files such 
     claim before the date that is 3 months after the date of the 
     enactment of this Act.
       (4) No double benefit.--No amount shall be paid under 
     paragraph (1) or section 6427(l) of the Internal Revenue Code 
     of 1986 with respect to any kerosene described in paragraph 
     (1) to the extent that such amount is in excess of the tax 
     imposed on such kerosene under section 4041 or 4081 of such 
     Code, as the case may be.
       (5) Applicable laws.--For purposes of this subsection, 
     rules similar to the rules of section 6427(j) of the Internal 
     Revenue Code of 1986 shall apply.

     SEC. 252. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       (a) In General.--Part I of subchapter P of chapter 1 is 
     amended by adding at the end the following new section:

     ``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       ``(a) In General.--In the case of a taxpayer which elects 
     the application of this section for a taxable year, there 
     shall be allowed a deduction against gross income equal to 60 
     percent of the lesser of--
       ``(1) the taxpayer's qualified timber gain for such year, 
     or
       ``(2) the taxpayer's net capital gain for such year.
       ``(b) Qualified Timber Gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(1) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(2) the sum of the taxpayer's losses described in such 
     subsections for such year.
       ``(c) Special Rules for Pass-Thru Entities.--In the case of 
     any qualified timber gain of a pass-thru entity (as defined 
     in section 1(h)(10))--
       ``(1) the election under this section shall be made 
     separately by each taxpayer subject to tax on such gain, and
       ``(2) the Secretary may prescribe such regulations as are 
     appropriate to apply this section to such gain.
       ``(d) Termination.--No disposition of timber after December 
     31, 2007, shall be taken into account under subsection 
     (b).''.
       (b) Coordination With Maximum Capital Gains Rates.--
       (1) Taxpayers other than corporations.--Paragraph (2) of 
     section 1(h) is amended to read as follows:
       ``(2) Reduction of net capital gain.--For purposes of this 
     subsection, the net capital gain for any taxable year shall 
     be reduced (but not below zero) by the sum of--
       ``(A) the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii), and
       ``(B) in the case of a taxable year with respect to which 
     an election is in effect under section 1203, the lesser of--
       ``(i) the amount described in paragraph (1) of section 
     1203(a), or
       ``(ii) the amount described in paragraph (2) of such 
     section.''.
       (2) Corporations.--Section 1201 is amended by redesignating 
     subsection (b) as subsection (c) and inserting after 
     subsection (a) the following new subsection:
       ``(b) Qualified Timber Gain Not Taken Into Account.--For 
     purposes of this section, in the case of a corporation with 
     respect to which an election is in effect under section 1203, 
     the net capital gain for any taxable year shall be reduced 
     (but not below zero) by the corporation's qualified timber 
     gain (as defined in section 1203(b)).''.
       (c) Deduction Allowed Whether or Not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62, as amended 
     by this Act, is amended by inserting before the last sentence 
     the following new paragraph:
       ``(22) Qualified timber gains.--The deduction allowed by 
     section 1203.''.
       (d) Deduction Allowed in Computing Adjusted Current 
     Earnings.--Subparagraph (C) of section 56(g)(4) is amended by 
     adding at the end the following new clause:
       ``(vii) Deduction for qualified timber gain.--Clause (i) 
     shall not apply to any deduction allowed under section 
     1203.''.
       (e) Deduction Allowed in Computing Taxable Income of 
     Electing Small Business Trusts.--Subparagraph (C) of section 
     641(c)(2) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) The deduction allowed under section 1203.''.
       (f) Conforming Amendments.--
       (1) Subparagraph (B) of section 172(d)(2) is amended to 
     read as follows:
       ``(B) the exclusion under section 1202 and the deduction 
     under section 1203 shall not be allowed.''.
       (2) Paragraph (4) of section 642(c) is amended by striking 
     the first sentence and inserting the following: ``To the 
     extent that the amount otherwise allowable as a deduction 
     under this subsection consists of gain described in section 
     1202(a) or qualified timber gain (as defined in section 
     1203(b)), proper adjustment shall be made for any exclusion 
     allowable to the estate or trust under section 1202 and for 
     any deduction allowable to the estate or trust under section 
     1203.''.
       (3) Paragraph (3) of section 643(a) is amended by striking 
     the last sentence and inserting the following: ``The 
     exclusion under section 1202 and the deduction under section 
     1203 shall not be taken into account.''.
       (4) Subparagraph (C) of section 643(a)(6) is amended to 
     read as follows:
       ``(C) Paragraph (3) shall not apply to a foreign trust. In 
     the case of such a trust--
       ``(i) there shall be included gains from the sale or 
     exchange of capital assets, reduced by losses from such sales 
     or exchanges to the extent such losses do not exceed gains 
     from such sales or exchanges, and
       ``(ii) the deduction under section 1203 shall not be taken 
     into account.''.
       (5) Paragraph (4) of section 691(c) is amended by inserting 
     ``1203,'' after ``1202,''.
       (6) Paragraph (2) of section 871(a) is amended by striking 
     ``section 1202'' and inserting ``sections 1202 and 1203''.
       (7) The table of sections for part I of subchapter P of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Sec. 1203. Deduction for qualified timber gain.''.

       (g) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Taxable years which include date of enactment.--In the 
     case of any taxable year which includes the date of the 
     enactment of this Act, for purposes of the Internal Revenue 
     Code of 1986, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in section 1203(b) 
     of such Code, as added by this section, if only dispositions 
     of timber after such date were taken into account.

     SEC. 253. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       (a) In General.--Subpart H of part IV of subchapter A of 
     chapter 1 (relating to credits against tax) is amended by 
     adding at the end the following new section:

     ``SEC. 54A. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a rural renaissance bond on a credit allowance date of 
     such bond, which occurs during the taxable year, there shall 
     be allowed as a credit against the tax imposed by this 
     chapter for such taxable year an amount equal to the sum of 
     the credits determined under subsection (b) with respect to 
     credit allowance dates during such year on which the taxpayer 
     holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a rural renaissance bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any rural renaissance bond is the product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any rural renaissance bond, the Secretary shall 
     determine daily or caused to be determined daily a credit 
     rate which shall apply to the first day on which there is a 
     binding, written contract for the sale or exchange of the 
     bond. The credit rate for any day is the credit rate which 
     the Secretary or the Secretary's designee estimates will 
     permit the issuance of rural renaissance bonds with a 
     specified maturity or redemption date without discount and 
     without interest cost to the qualified issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term also includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-

[[Page 16464]]

     month period during which the bond is outstanding. A similar 
     rule shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than subpart C and this section).
       ``(d) Rural Renaissance Bond.--For purposes of this 
     section--
       ``(1) In general.--The term `rural renaissance bond' means 
     any bond issued as part of an issue if--
       ``(A) the bond is issued by a qualified issuer,
       ``(B) 95 percent or more of the proceeds from the sale of 
     such issue are to be used for capital expenditures incurred 
     for 1 or more qualified projects,
       ``(C) the qualified issuer designates such bond for 
     purposes of this section and the bond is in registered form, 
     and
       ``(D) the issue meets the requirements of subsections (e) 
     and (h).
       ``(2) Qualified project; special use rules.--
       ``(A) In general.--The term `qualified project' means 1 or 
     more projects described in subparagraph (B) located in a 
     rural area.
       ``(B) Projects described.--A project described in this 
     subparagraph is--
       ``(i) a water or waste treatment project,
       ``(ii) an affordable housing project,
       ``(iii) a community facility project, including hospitals, 
     fire and police stations, and nursing and assisted-living 
     facilities,
       ``(iv) a value-added agriculture or renewable energy 
     facility project for agricultural producers or farmer-owned 
     entities, including any project to promote the production, 
     processing, or retail sale of ethanol (including fuel at 
     least 85 percent of the volume of which consists of ethanol), 
     biodiesel, animal waste, biomass, raw commodities, or wind as 
     a fuel,
       ``(v) a distance learning or telemedicine project,
       ``(vi) a rural utility infrastructure project, including 
     any electric or telephone system,
       ``(vii) a project to expand broadband technology,
       ``(viii) a rural teleworks project, and
       ``(ix) any project described in any preceding clause 
     carried out by the Delta Regional Authority.
       ``(C) Special rules.--For purposes of this paragraph--
       ``(i) any project described in subparagraph (B)(iv) for a 
     farmer-owned entity may be considered a qualified project if 
     such entity is located in a rural area, or in the case of a 
     farmer-owned entity the headquarters of which are located in 
     a nonrural area, if the project is located in a rural area, 
     and
       ``(ii) any project for a farmer-owned entity which is a 
     facility described in subparagraph (B)(iv) for agricultural 
     producers may be considered a qualified project regardless of 
     whether the facility is located in a rural or nonrural area.
       ``(3) Special use rules.--
       ``(A) Refinancing rules.--For purposes of paragraph (1)(B), 
     a qualified project may be refinanced with proceeds of a 
     rural renaissance bond only if the indebtedness being 
     refinanced (including any obligation directly or indirectly 
     refinanced by such indebtedness) was originally incurred 
     after the date of the enactment of this section.
       ``(B) Reimbursement.--For purposes of paragraph (1)(B), a 
     rural renaissance bond may be issued to reimburse a borrower 
     for amounts paid after the date of the enactment of this 
     section with respect to a qualified project, but only if--
       ``(i) prior to the payment of the original expenditure, the 
     borrower declared its intent to reimburse such expenditure 
     with the proceeds of a rural renaissance bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the qualified issuer adopts an official intent 
     to reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(C) Treatment of changes in use.--For purposes of 
     paragraph (1)(B), the proceeds of an issue shall not be 
     treated as used for a qualified project to the extent that a 
     borrower takes any action within its control which causes 
     such proceeds not to be used for a qualified project. The 
     Secretary shall prescribe regulations specifying remedial 
     actions that may be taken (including conditions to taking 
     such remedial actions) to prevent an action described in the 
     preceding sentence from causing a bond to fail to be a rural 
     renaissance bond.
       ``(e) Maturity Limitations.--
       ``(1) Duration of term.--A bond shall not be treated as a 
     rural renaissance bond if the maturity of such bond exceeds 
     the maximum term determined by the Secretary under paragraph 
     (2) with respect to such bond.
       ``(2) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined without regard to the requirements 
     of paragraph (3) and using as a discount rate the average 
     annual interest rate of tax-exempt obligations having a term 
     of 10 years or more which are issued during the month. If the 
     term as so determined is not a multiple of a whole year, such 
     term shall be rounded to the next highest whole year.
       ``(3) Ratable principal amortization required.--A bond 
     shall not be treated as a rural renaissance bond unless it is 
     part of an issue which provides for an equal amount of 
     principal to be paid by the qualified issuer during each 
     calendar year that the issue is outstanding.
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a rural renaissance 
     bond limitation of $200,000,000.
       ``(2) Allocation by secretary.--The Secretary shall 
     allocate the amount described in paragraph (1) among 
     qualified projects in such manner as the Secretary determines 
     appropriate.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(h) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the qualified issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds from the sale of 
     the issue are to be spent for 1 or more qualified projects 
     within the 5-year period beginning on the date of issuance of 
     the rural renaissance bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds from the sale of the issue 
     will be incurred within the 6-month period beginning on the 
     date of issuance of the rural renaissance bond or, in the 
     case of a rural renaissance bond, the proceeds of which are 
     to be loaned to 2 or more borrowers, such binding commitment 
     will be incurred within the 6-month period beginning on the 
     date of the loan of such proceeds to a borrower, and
       ``(C) such projects will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the qualified 
     issuer establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     projects will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the qualified issuer shall redeem 
     all of the nonqualified bonds within 90 days after the end of 
     such period. For purposes of this paragraph, the amount of 
     the nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(i) Special Rules Relating to Arbitrage.--A bond which is 
     part of an issue shall not be treated as a rural renaissance 
     bond unless, with respect to the issue of which the bond is a 
     part, the qualified issuer satisfies the arbitrage 
     requirements of section 148 with respect to proceeds of the 
     issue.
       ``(j) Qualified Issuer.--For purposes of this section--
       ``(1) In general.--The term `qualified issuer' means any 
     not-for-profit cooperative lender which has as of the date of 
     the enactment of this section received a guarantee under 
     section 306 of the Rural Electrification Act and which meets 
     the requirement of paragraph (2).
       ``(2) User fee requirement.--The requirement of this 
     paragraph is met if the issuer of any rural renaissance bond 
     makes grants for qualified projects as defined under 
     subsection (d)(2) on a semi-annual basis every year that such 
     bond is outstanding in an annual amount equal to one-half of 
     the rate on United States Treasury Bills of the same maturity 
     multiplied by the outstanding principal balance of rural 
     renaissance bonds issued by such issuer.
       ``(k) Special Rules Relating to Pool Bonds.--No portion of 
     a pooled financing bond may be allocable to a loan unless the 
     borrower has entered into a written loan commitment for such 
     portion prior to the issue date of such issue.
       ``(l) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Pooled financing bond.--The term `pooled financing 
     bond' shall have the meaning given such term by section 
     149(f)(4)(A).
       ``(3) Rural area.--The term `rural area' means any area 
     other than--
       ``(A) a city or town which has a population of greater than 
     50,000 inhabitants, or
       ``(B) the urbanized area contiguous and adjacent to such a 
     city or town.

[[Page 16465]]

       ``(4) Partnership; s corporation; and other pass-thru 
     entities.--
       ``(A) In general.--Under regulations prescribed by the 
     Secretary, in the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under subsection (a).
       ``(B) No basis adjustment.--In the case of a bond held by a 
     partnership or an S corporation, rules similar to the rules 
     under section 1397E(l) shall apply.
       ``(5) Bonds held by regulated investment companies.--If any 
     rural renaissance bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(6) Reporting.--Issuers of rural renaissance bonds shall 
     submit reports similar to the reports required under section 
     149(e).''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on rural renaissance bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A(f) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54A(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) The table of sections for subpart H of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

    ``Sec. 54A. Credit to holders of rural renaissance bonds.''.

       (2) Section 54(c)(2) is amended by inserting ``, section 
     54A,'' after ``subpart C''.
       (3) Section 1400N(l)(3)(B) is amended by inserting ``, 
     section 54A,'' after ``subpart C''.
       (d) Issuance of Regulations.--The Secretary of Treasury 
     shall issue regulations required under section 54A of the 
     Internal Revenue Code of 1986 (as added by this section) not 
     later than 120 days after the date of the enactment of this 
     Act.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act and before January 1, 2010.

     SEC. 254. RESTORATION OF DEDUCTION FOR TRAVEL EXPENSES OF 
                   SPOUSE, ETC. ACCOMPANYING TAXPAYER ON BUSINESS 
                   TRAVEL.

       (a) In General.--Subsection (m) of section 274 (relating to 
     additional limitations on travel expenses) is amended by 
     adding at the end the following new paragraph:
       ``(4) Termination.--Paragraph (3) shall not apply to any 
     expense paid or incurred after the date of the enactment of 
     this paragraph and before January 1, 2008.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

     SEC. 255. TECHNICAL CORRECTIONS.

       (a) Technical Correction Relating to Look-Through Treatment 
     of Payments Between Related Controlled Foreign Corporations 
     Under the Foreign Personal Holding Company Rules.--
       (1) In general.--
       (A) The first sentence of section 954(c)(6)(A), as amended 
     by section 103(b) of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking ``which is 
     not subpart F income'' and inserting ``which is neither 
     subpart F income nor income treated as effectively connected 
     with the conduct of a trade or business in the United 
     States''.
       (B) Section 954(c)(6)(A), as so amended, is amended by 
     striking the last sentence and inserting the following: ``The 
     Secretary shall prescribe such regulations as may be 
     necessary or appropriate to carry out this paragraph, 
     including such regulations as may be necessary or appropriate 
     to prevent the abuse of the purposes of this paragraph.''
       (2) Effective date.--The amendments made by this subsection 
     shall take effect as if included in section 103(b) of the Tax 
     Increase Prevention and Reconciliation Act of 2005.
       (b) Technical Correction Regarding Authority To Exercise 
     Reasonable Cause and Good Faith Exception.--
       (1) In general.--Section 903(d)(2)(B)(iii) of the American 
     Jobs Creation Act of 2004, as amended by section 303(a) of 
     the Gulf Opportunity Zone Act of 2005, is amended by 
     inserting ``or the Secretary's delegate'' after ``the 
     Secretary of the Treasury''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.

  TITLE III--SURFACE MINING CONTROL AND RECLAMATION ACT AMENDMENTS OF 
                                  2006

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Surface Mining Control and 
     Reclamation Act Amendments of 2006''.

               Subtitle A--MINING CONTROL AND RECLAMATION

     SEC. 311. ABANDONED MINE RECLAMATION FUND AND PURPOSES.

       (a) In General.--Section 401 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1231) is amended--
       (1) in subsection (c)--
       (A) by striking paragraphs (2) and (6); and
       (B) by redesignating paragraphs (3), (4), and (5) and 
     paragraphs (7) through (13) as paragraphs (2) through (11), 
     respectively;
       (2) by striking subsection (d) and inserting the following:
       ``(d) Availability of Moneys; No Fiscal Year Limitation.--
       ``(1) In general.--Moneys from the fund for expenditures 
     under subparagraphs (A) through (D) of section 402(g)(3) 
     shall be available only when appropriated for those 
     subparagraphs.
       ``(2) No fiscal year limitation.--Appropriations described 
     in paragraph (1) shall be made without fiscal year 
     limitation.
       ``(3) Other purposes.--Moneys from the fund shall be 
     available for all other purposes of this title without prior 
     appropriation as provided in subsection (f).'';
       (3) in subsection (e)--
       (A) in the second sentence, by striking ``the needs of such 
     fund'' and inserting ``achieving the purposes of the 
     transfers under section 402(h)''; and
       (B) in the third sentence, by inserting before the period 
     the following: ``for the purpose of the transfers under 
     section 402(h)''; and
       (4) by adding at the end the following:
       ``(f) General Limitation on Obligation Authority.--
       ``(1) In general.--From amounts deposited into the fund 
     under subsection (b), the Secretary shall distribute during 
     each fiscal year beginning after September 30, 2007, an 
     amount determined under paragraph (2).
       ``(2) Amounts.--
       ``(A) For fiscal years 2008 through 2022.--For each of 
     fiscal years 2008 through 2022, the amount distributed by the 
     Secretary under this subsection shall be equal to--
       ``(i) the amounts deposited into the fund under paragraphs 
     (1), (2), and (4) of subsection (b) for the preceding fiscal 
     year that were allocated under paragraphs (1) and (5) of 
     section 402(g); plus
       ``(ii) the amount needed for the adjustment under section 
     402(g)(8) for the current fiscal year.
       ``(B) Fiscal years 2023 and thereafter.--For fiscal year 
     2023 and each fiscal year thereafter, to the extent that 
     funds are available, the Secretary shall distribute an amount 
     equal to the amount distributed under subparagraph (A) during 
     fiscal year 2022.
       ``(3) Distribution.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for each fiscal year, of the amount to be distributed to 
     States and Indian tribes pursuant to paragraph (2), the 
     Secretary shall distribute--
       ``(i) the amounts allocated under paragraph (1) of section 
     402(g), the amounts allocated under paragraph (5) of section 
     402(g), and any amount reallocated under section 411(h)(3) in 
     accordance with section 411(h)(2), for grants to States and 
     Indian tribes under section 402(g)(5); and
       ``(ii) the amounts allocated under section 402(g)(8).
       ``(B) Exclusion.--Beginning on October 1, 2007, certified 
     States shall be ineligible to receive amounts under section 
     402(g)(1).
       ``(4) Availability.--Amounts in the fund available to the 
     Secretary for obligation under this subsection shall be 
     available until expended.
       ``(5) Addition.--
       ``(A) In general.--Subject to subparagraph (B), the amount 
     distributed under this subsection for each fiscal year shall 
     be in addition to the amount appropriated from the fund 
     during the fiscal year.
       ``(B) Exceptions.--Notwithstanding paragraph (3), the 
     amount distributed under this subsection for the first 4 
     fiscal years beginning on and after October 1, 2007, shall be 
     equal to the following percentage of the amount otherwise 
     required to be distributed:
       ``(i) 50 percent in fiscal year 2008.
       ``(ii) 50 percent in fiscal year 2009.
       ``(iii) 75 percent in fiscal year 2010.
       ``(iv) 75 percent in fiscal year 2011.''.
       (b) Conforming Amendment.--Section 712(b) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1302(b)) is amended by striking ``section 401(c)(11)'' and 
     inserting ``section 401(c)(9)''.

     SEC. 312. RECLAMATION FEE.

       (a) Amounts.--
       (1) Fiscal years 2008-2012.--Effective October 1, 2007, 
     section 402(a) of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1232(a)) is amended--
       (A) by striking ``35'' and inserting ``31.5'';
       (B) by striking ``15'' and inserting ``13.5''; and
       (C) by striking ``10 cents'' and inserting ``9 cents''.

[[Page 16466]]

       (2) Fiscal years 2013-2021.--Effective October 1, 2012, 
     section 402(a) of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1232(a)) (as amended by paragraph (1)) 
     is amended--
       (A) by striking ``31.5'' and inserting ``28'';
       (B) by striking ``13.5'' and inserting ``12''; and
       (C) by striking ``9 cents'' and inserting ``8 cents''.
       (b) Duration.--Effective September 30, 2007, section 402(b) 
     of the Surface Mining Control and Reclamation Act of 1977 (30 
     U.S.C. 1232(b)) (as amended by section 7007 of the Emergency 
     Supplemental Appropriations Act for Defense, the Global War 
     on Terror, and Hurricane Recovery, 2006 (Public Law 109-234; 
     120 Stat. 484)) is amended by striking ``September 30, 2007'' 
     and all that follows through the end of the sentence and 
     inserting ``September 30, 2021.''.
       (c) Allocation of Funds.--Section 402(g) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1232(g)) is amended--
       (1) in paragraph (1)(D)--
       (A) by inserting ``(except for grants awarded during fiscal 
     years 2008, 2009, and 2010 to the extent not expended within 
     5 years)'' after ``this paragraph''; and
       (B) by striking ``in any area under paragraph (2), (3), 
     (4), or (5)'' and inserting ``under paragraph (5)'';
       (2) by striking paragraph (2) and inserting:
       ``(2) In making the grants referred to in paragraph (1)(C) 
     and the grants referred to in paragraph (5), the Secretary 
     shall ensure strict compliance by the States and Indian 
     tribes with the priorities described in section 403(a) until 
     a certification is made under section 411(a).'';
       (3) in paragraph (3)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``paragraphs (2) and'' and inserting ``paragraph'';
       (B) in subparagraph (A), by striking ``401(c)(11)'' and 
     inserting ``401(c)(9)''; and
       (C) by adding at the end the following:
       ``(E) For the purpose of paragraph (8).'';
       (4) in paragraph (5)--
       (A) by inserting ``(A)'' after ``(5)'';
       (B) in the first sentence, by striking ``40'' and inserting 
     ``60'';
       (C) in the last sentence, by striking ``Funds allocated or 
     expended by the Secretary under paragraphs (2), (3), or (4)'' 
     and inserting ``Funds made available under paragraph (3) or 
     (4)''; and
       (D) by adding at the end the following:
       ``(B) Any amount that is reallocated and available under 
     section 411(h)(3) shall be in addition to amounts that are 
     allocated under subparagraph (A).''; and
       (5) by striking paragraphs (6) through (8) and inserting 
     the following:
       ``(6)(A) Any State with an approved abandoned mine 
     reclamation program pursuant to section 405 may receive and 
     retain, without regard to the 3-year limitation referred to 
     in paragraph (1)(D), up to 30 percent of the total of the 
     grants made annually to the State under paragraphs (1) and 
     (5) if those amounts are deposited into an acid mine drainage 
     abatement and treatment fund established under State law, 
     from which amounts (together with all interest earned on the 
     amounts) are expended by the State for the abatement of the 
     causes and the treatment of the effects of acid mine drainage 
     in a comprehensive manner within qualified hydrologic units 
     affected by coal mining practices.
       ``(B) In this paragraph, the term `qualified hydrologic 
     unit' means a hydrologic unit--
       ``(i) in which the water quality has been significantly 
     affected by acid mine drainage from coal mining practices in 
     a manner that adversely impacts biological resources; and
       ``(ii) that contains land and water that are--
       ``(I) eligible pursuant to section 404 and include any of 
     the priorities described in section 403(a); and
       ``(II) the subject of expenditures by the State from the 
     forfeiture of bonds required under section 509 or from other 
     States sources to abate and treat acid mine drainage.
       ``(7) In complying with the priorities described in section 
     403(a), any State or Indian tribe may use amounts available 
     in grants made annually to the State or tribe under 
     paragraphs (1) and (5) for the reclamation of eligible land 
     and water described in section 403(a)(3) before the 
     completion of reclamation projects under paragraphs (1) and 
     (2) of section 403(a) only if the expenditure of funds for 
     the reclamation is done in conjunction with the expenditure 
     before, on, or after the date of enactment of the Surface 
     Mining Control and Reclamation Act Amendments of 2006 of 
     funds for reclamation projects under paragraphs (1) and (2) 
     of section 403(a).
       ``(8)(A) In making funds available under this title, the 
     Secretary shall ensure that the grant awards total not less 
     than $3,000,000 annually to each State and each Indian tribe 
     having an approved abandoned mine reclamation program 
     pursuant to section 405 and eligible land and water pursuant 
     to section 404, so long as an allocation of funds to the 
     State or tribe is necessary to achieve the priorities stated 
     in paragraphs (1) and (2) of section 403(a).
       ``(B) Notwithstanding any other provision of law, this 
     paragraph applies to the States of Tennessee and Missouri.''.
       (d) Transfers of Interest Earned by Abandoned Mine 
     Reclamation Fund.--Section 402 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1232) is amended by 
     striking subsection (h) and inserting the following:
       ``(h) Transfers of Interest Earned by Fund.--
       ``(1) In general.--
       ``(A) Transfers to combined benefit fund.--As soon as 
     practicable after the beginning of fiscal year 2007 and each 
     fiscal year thereafter, and before making any allocation with 
     respect to the fiscal year under subsection (g), the 
     Secretary shall use an amount not to exceed the amount of 
     interest that the Secretary estimates will be earned and paid 
     to the fund during the fiscal year to make the transfer 
     described in paragraph (2)(A).
       ``(B) Transfers to 1992 and 1993 plans.--As soon as 
     practicable after the beginning of fiscal year 2008 and each 
     fiscal year thereafter, and before making any allocation with 
     respect to the fiscal year under subsection (g), the 
     Secretary shall use an amount not to exceed the amount of 
     interest that the Secretary estimates will be earned and paid 
     to the fund during the fiscal year (reduced by the amount 
     used under subparagraph (A)) to make the transfers described 
     in paragraphs (2)(B) and (2)(C).
       ``(2) Transfers described.--The transfers referred to in 
     paragraph (1) are the following:
       ``(A) United mine workers of america combined benefit 
     fund.--A transfer to the United Mine Workers of America 
     Combined Benefit Fund equal to the amount that the trustees 
     of the Combined Benefit Fund estimate will be expended from 
     the fund for the fiscal year in which the transfer is made, 
     reduced by--
       ``(i) the amount the trustees of the Combined Benefit Fund 
     estimate the Combined Benefit Fund will receive during the 
     fiscal year in--

       ``(I) required premiums; and
       ``(II) payments paid by Federal agencies in connection with 
     benefits provided by the Combined Benefit Fund; and

       ``(ii) the amount the trustees of the Combined Benefit Fund 
     estimate will be expended during the fiscal year to provide 
     health benefits to beneficiaries who are unassigned 
     beneficiaries solely as a result of the application of 
     section 9706(h)(1) of the Internal Revenue Code of 1986, but 
     only to the extent that such amount does not exceed the 
     amounts described in subsection (i)(1)(A) that the Secretary 
     estimates will be available to pay such estimated 
     expenditures.
       ``(B) United mine workers of america 1992 benefit plan.--A 
     transfer to the United Mine Workers of America 1992 Benefit 
     Plan, in an amount equal to the difference between--
       ``(i) the amount that the trustees of the 1992 UMWA Benefit 
     Plan estimate will be expended from the 1992 UMWA Benefit 
     Plan during the next calendar year to provide the benefits 
     required by the 1992 UMWA Benefit Plan on the date of 
     enactment of this subparagraph; minus
       ``(ii) the amount that the trustees of the 1992 UMWA 
     Benefit Plan estimate the 1992 UMWA Benefit Plan will receive 
     during the next calendar year in--

       ``(I) required monthly per beneficiary premiums, including 
     the amount of any security provided to the 1992 UMWA Benefit 
     Plan that is available for use in the provision of benefits; 
     and
       ``(II) payments paid by Federal agencies in connection with 
     benefits provided by the 1992 UMWA benefit plan.

       ``(C) Multiemployer health benefit plan.--A transfer to the 
     Multiemployer Health Benefit Plan established after July 20, 
     1992, by the parties that are the settlors of the 1992 UMWA 
     Benefit Plan referred to in subparagraph (B) (referred to in 
     this subparagraph and subparagraph (D) as `the Plan'), in an 
     amount equal to the excess (if any) of--
       ``(i) the amount that the trustees of the Plan estimate 
     will be expended from the Plan during the next calendar year, 
     to provide benefits no greater than those provided by the 
     Plan as of December 31, 2006; over
       ``(ii) the amount that the trustees estimated the Plan will 
     receive during the next calendar year in payments paid by 
     Federal agencies in connection with benefits provided by the 
     Plan.

     Such excess shall be calculated by taking into account only 
     those beneficiaries actually enrolled in the Plan as of 
     December 31, 2006, who are eligible to receive benefits under 
     the Plan on the first day of the calendar year for which the 
     transfer is made.
       ``(D) Individuals considered enrolled.--For purposes of 
     subparagraph (C), any individual who was eligible to receive 
     benefits from the Plan as of the date of enactment of this 
     subsection, even though benefits were being provided to the 
     individual pursuant to a settlement agreement approved by 
     order of a bankruptcy court entered on or before September 
     30, 2004, will be considered to be actually enrolled in the 
     Plan and shall receive benefits from the Plan beginning on 
     December 31, 2006.
       ``(3) Adjustment.--If, for any fiscal year, the amount of a 
     transfer under subparagraph (A), (B), or (C) of paragraph (2) 
     is more or

[[Page 16467]]

     less than the amount required to be transferred under that 
     subparagraph, the Secretary shall appropriately adjust the 
     amount transferred under that subparagraph for the next 
     fiscal year.
       ``(4) Additional amounts.--
       ``(A) Previously credited interest.--Notwithstanding any 
     other provision of law, any interest credited to the fund 
     that has not previously been transferred to the Combined 
     Benefit Fund referred to in paragraph (2)(A) under this 
     section--
       ``(i) shall be held in reserve by the Secretary until such 
     time as necessary to make the payments under subparagraphs 
     (A) and (B) of subsection (i)(1), as described in clause 
     (ii); and
       ``(ii) in the event that the amounts described in 
     subsection (i)(1) are insufficient to make the maximum 
     payments described in subparagraphs (A) and (B) of subsection 
     (i)(1), shall be used by the Secretary to supplement the 
     payments so that the maximum amount permitted under those 
     paragraphs is paid.
       ``(B) Previously allocated amounts.--All amounts allocated 
     under subsection (g)(2) before the date of enactment of this 
     subparagraph for the program described in section 406, but 
     not appropriated before that date, shall be available to the 
     Secretary to make the transfers described in paragraph (2).
       ``(C) Adequacy of previously credited interest.--The 
     Secretary shall--
       ``(i) consult with the trustees of the plans described in 
     paragraph (2) at reasonable intervals; and
       ``(ii) notify Congress if a determination is made that the 
     amounts held in reserve under subparagraph (A) are 
     insufficient to meet future requirements under subparagraph 
     (A)(ii).
       ``(D) Additional reserve amounts.--In addition to amounts 
     held in reserve under subparagraph (A), there is authorized 
     to be appropriated such sums as may be necessary for transfer 
     to the fund to carry out the purposes of subparagraph 
     (A)(ii).
       ``(E) Inapplicability of cap.--The limitation described in 
     subsection (i)(3)(A) shall not apply to payments made from 
     the reserve fund under this paragraph.
       ``(5) Limitations.--
       ``(A) Availability of funds for next fiscal year.--The 
     Secretary may make transfers under subparagraphs (B) and (C) 
     of paragraph (2) for a calendar year only if the Secretary 
     determines, using actuarial projections provided by the 
     trustees of the Combined Benefit Fund referred to in 
     paragraph (2)(A), that amounts will be available under 
     paragraph (1), after the transfer, for the next fiscal year 
     for making the transfer under paragraph (2)(A).
       ``(B) Rate of contributions of obligors.--
       ``(i) In general.--

       ``(I) Rate.--A transfer under paragraph (2)(C) shall not be 
     made for a calendar year unless the persons that are 
     obligated to contribute to the plan referred to in paragraph 
     (2)(C) on the date of the transfer are obligated to make the 
     contributions at rates that are no less than those in effect 
     on the date which is 30 days before the date of enactment of 
     this subsection.
       ``(II) Application.--The contributions described in 
     subclause (I) shall be applied first to the provision of 
     benefits to those plan beneficiaries who are not described in 
     paragraph (2)(C)(ii).

       ``(ii) Initial contributions.--

       ``(I) In general.--From the date of enactment of the 
     Surface Mining Control and Reclamation Act Amendments of 2006 
     through December 31, 2010, the persons that, on the date of 
     enactment of that Act, are obligated to contribute to the 
     plan referred to in paragraph (2)(C) shall be obligated, 
     collectively, to make contributions equal to the amount 
     described in paragraph (2)(C), less the amount actually 
     transferred due to the operation of subparagraph (C).
       ``(II) First calendar year.--Calendar year 2006 is the 
     first calendar year for which contributions are required 
     under this clause.
       ``(III) Amount of contribution for 2006.--Except as 
     provided in subclause (IV), the amount described in paragraph 
     (2)(C) for calendar year 2006 shall be calculated as if 
     paragraph (2)(C) had been in effect during 2005.
       ``(IV) Limitation.--The contributions required under this 
     clause for calendar year 2006 shall not exceed the amount 
     necessary for solvency of the plan described in paragraph 
     (2)(C), measured as of December 31, 2006 and taking into 
     account all assets held by the plan as of that date.

       ``(iii) Division.--The collective annual contribution 
     obligation required under clause (ii) shall be divided among 
     the persons subject to the obligation, and applied uniformly, 
     based on the hours worked for which contributions referred to 
     in clause (i) would be owed.
       ``(C) Phase-in of transfers.--For each of calendar years 
     2008 through 2010, the transfers required under subparagraphs 
     (B) and (C) of paragraph (2) shall equal the following 
     amounts:
       ``(i) For calendar year 2008, the Secretary shall make 
     transfers equal to 25 percent of the amounts that would 
     otherwise be required under subparagraphs (B) and (C) of 
     paragraph (2).
       ``(ii) For calendar year 2009, the Secretary shall make 
     transfers equal to 50 percent of the amounts that would 
     otherwise be required under subparagraphs (B) and (C) of 
     paragraph (2).
       ``(iii) For calendar year 2010, the Secretary shall make 
     transfers equal to 75 percent of the amounts that would 
     otherwise be required under subparagraphs (B) and (C) of 
     paragraph (2).
       ``(i) Funding.--
       ``(1) In general.--Subject to paragraph (3), out of any 
     funds in the Treasury not otherwise appropriated, the 
     Secretary of the Treasury shall transfer to the plans 
     described in subsection (h)(2) such sums as are necessary to 
     pay the following amounts:
       ``(A) To the Combined Fund (as defined in section 
     9701(a)(5) of the Internal Revenue Code of 1986 and referred 
     to in this paragraph as the `Combined Fund'), the amount that 
     the trustees of the Combined Fund estimate will be expended 
     from premium accounts maintained by the Combined Fund for the 
     fiscal year to provide benefits for beneficiaries who are 
     unassigned beneficiaries solely as a result of the 
     application of section 9706(h)(1) of the Internal Revenue 
     Code of 1986, subject to the following limitations:
       ``(i) For fiscal year 2008, the amount paid under this 
     subparagraph shall equal--

       ``(I) the amount described in subparagraph (A); minus
       ``(II) the amounts required under section 9706(h)(3)(A) of 
     the Internal Revenue Code of 1986.

       ``(ii) For fiscal year 2009, the amount paid under this 
     subparagraph shall equal--

       ``(I) the amount described in subparagraph (A); minus
       ``(II) the amounts required under section 9706(h)(3)(B) of 
     the Internal Revenue Code of 1986.

       ``(iii) For fiscal year 2010, the amount paid under this 
     subparagraph shall equal--

       ``(I) the amount described in subparagraph (A); minus
       ``(II) the amounts required under section 9706(h)(3)(C) of 
     the Internal Revenue Code of 1986.

       ``(B) On certification by the trustees of any plan 
     described in subsection (h)(2) that the amount available for 
     transfer by the Secretary pursuant to this section 
     (determined after application of any limitation under 
     subsection (h)(5)) is less than the amount required to be 
     transferred, to the plan the amount necessary to meet the 
     requirement of subsection (h)(2).
       ``(C) To the Combined Fund, $9,000,000 on October 1, 2007, 
     $9,000,000 on October 1, 2008, and $9,000,000 on October 1, 
     2009 (which amounts shall not be exceeded) to provide a 
     refund of any premium (as described in section 9704(a) of the 
     Internal Revenue Code of 1986) paid on or before September 7, 
     2000, to the Combined Fund, plus interest on the premium 
     calculated at the rate of 7.5 percent per year, on a 
     proportional basis and to be paid not later than 60 days 
     after the date on which each payment is received by the 
     Combined Fund, to those signatory operators (to the extent 
     that the Combined Fund has not previously returned the 
     premium amounts to the operators), or any related persons to 
     the operators (as defined in section 9701(c) of the Internal 
     Revenue Code of 1986), or their heirs, successors, or assigns 
     who have been denied the refunds as the result of final 
     judgments or settlements if--
       ``(i) prior to the date of enactment of this paragraph, the 
     signatory operator (or any related person to the operator)--

       ``(I) had all of its beneficiary assignments made under 
     section 9706 of the Internal Revenue Code of 1986 voided by 
     the Commissioner of the Social Security Administration; and
       ``(II) was subject to a final judgment or final settlement 
     of litigation adverse to a claim by the operator that the 
     assignment of beneficiaries under section 9706 of the 
     Internal Revenue Code of 1986 was unconstitutional as applied 
     to the operator; and

       ``(ii) on or before September 7, 2000, the signatory 
     operator (or any related person to the operator) had paid to 
     the Combined Fund any premium amount that had not been 
     refunded.
       ``(2) Payments to states and indian tribes.--Subject to 
     paragraph (3), out of any funds in the Treasury not otherwise 
     appropriated, the Secretary of the Treasury shall transfer to 
     the Secretary of the Interior for distribution to States and 
     Indian tribes such sums as are necessary to pay amounts 
     described in paragraphs (1)(A) and (2)(A) of section 411(h).
       ``(3) Limitations.--
       ``(A) Cap.--The total amount transferred under this 
     subsection for any fiscal year shall not exceed $490,000,000.
       ``(B) Insufficient amounts.--In a case in which the amount 
     required to be transferred without regard to this paragraph 
     exceeds the maximum annual limitation in subparagraph (A), 
     the Secretary shall adjust the transfers of funds so that--
       ``(i) each transfer for the fiscal year is a percentage of 
     the amount described;
       ``(ii) the amount is determined without regard to 
     subsection (h)(5)(A); and
       ``(iii) the percentage transferred is the same for all 
     transfers made under this subsection for the fiscal year.
       ``(4) Availability of funds.--Funds shall be transferred 
     under paragraph (1) and (2) beginning in fiscal year 2008 and 
     each fiscal year thereafter, and shall remain available until 
     expended.''.

[[Page 16468]]



     SEC. 313. OBJECTIVES OF FUND.

       Section 403 of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1233) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``(1) the protection'' and inserting the 
     following:
       ``(1)(A) the protection;'';
       (ii) in subparagraph (A) (as designated by clause (i)), by 
     striking ``general welfare,''; and
       (iii) by adding at the end the following:
       ``(B) the restoration of land and water resources and the 
     environment that--
       ``(i) have been degraded by the adverse effects of coal 
     mining practices; and
       ``(ii) are adjacent to a site that has been or will be 
     remediated under subparagraph (A);'';
       (B) in paragraph (2)--
       (i) by striking ``(2) the protection'' and inserting the 
     following:
       ``(2)(A) the protection'';
       (ii) in subparagraph (A) (as designated by clause (i), by 
     striking ``health, safety, and general welfare'' and 
     inserting ``health and safety''; and
       (iii) by adding at the end the following:
       ``(B) the restoration of land and water resources and the 
     environment that--
       ``(i) have been degraded by the adverse effects of coal 
     mining practices; and
       ``(ii) are adjacent to a site that has been or will be 
     remediated under subparagraph (A); and'';
       (C) in paragraph (3), by striking the semicolon at the end 
     and inserting a period; and
       (D) by striking paragraphs (4) and (5);
       (2) in subsection (b)--
       (A) by striking the subsection heading and inserting 
     ``Water Supply Restoration.--''; and
       (B) in paragraph (1), by striking ``up to 30 percent of 
     the''; and
       (3) in the second sentence of subsection (c), by inserting 
     ``, subject to the approval of the Secretary,'' after 
     ``amendments''.

     SEC. 314. RECLAMATION OF RURAL LAND.

       (a) Administration.--Section 406(h) of the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 1236(h)) is 
     amended by striking ``Soil Conservation Service'' and 
     inserting ``Natural Resources Conservation Service''.
       (b) Authorization of Appropriations for Carrying Out Rural 
     Land Reclamation.--Section 406 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1236) is amended by 
     adding at the end the following:
       ``(i) There are authorized to be appropriated to the 
     Secretary of Agriculture, from amounts in the Treasury other 
     than amounts in the fund, such sums as may be necessary to 
     carry out this section.''.

     SEC. 315. LIENS.

       Section 408(a) of the Surface Mining Control and 
     Reclamation Act of 1977 (30 U.S.C. 1238) is amended in the 
     last sentence by striking ``who owned the surface prior to 
     May 2, 1977, and''.

     SEC. 316. CERTIFICATION.

       Section 411 of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1240a) is amended--
       (1) in subsection (a)--
       (A) by inserting ``(1)'' before the first sentence; and
       (B) by adding at the end the following:
       ``(2)(A) The Secretary may, on the initiative of the 
     Secretary, make the certification referred to in paragraph 
     (1) on behalf of any State or Indian tribe referred to in 
     paragraph (1) if on the basis of the inventory referred to in 
     section 403(c) all reclamation projects relating to the 
     priorities described in section 403(a) for eligible land and 
     water pursuant to section 404 in the State or tribe have been 
     completed.
       ``(B) The Secretary shall only make the certification after 
     notice in the Federal Register and opportunity for public 
     comment.''; and
       (2) by adding at the end the following:
       ``(h) Payments to States and Indian Tribes.--
       ``(1) In general.--
       ``(A) Payments.--
       ``(i) In general.--Notwithstanding section 401(f)(3)(B), 
     from funds referred to in section 402(i)(2), the Secretary 
     shall make payments to States or Indian tribes for the amount 
     due for the aggregate unappropriated amount allocated to the 
     State or Indian tribe under subparagraph (A) or (B) of 
     section 402(g)(1).
       ``(ii) Conversion as equivalent payments.--Amounts 
     allocated under subparagraphs (A) or (B) of section 402(g)(1) 
     shall be reallocated to the allocation established in section 
     402(g)(5) in amounts equivalent to payments made to States or 
     Indian tribes under this paragraph.
       ``(B) Amount due.--In this paragraph, the term `amount due' 
     means the unappropriated amount allocated to a State or 
     Indian tribe before October 1, 2007, under subparagraph (A) 
     or (B) of section 402(g)(1).
       ``(C) Schedule.--Payments under subparagraph (A) shall be 
     made in 7 equal annual installments, beginning with fiscal 
     year 2008.
       ``(D) Use of funds.--
       ``(i) Certified states and indian tribes.--A State or 
     Indian tribe that makes a certification under subsection (a) 
     in which the Secretary concurs shall use any amounts provided 
     under this paragraph for the purposes established by the 
     State legislature or tribal council of the Indian tribe, with 
     priority given for addressing the impacts of mineral 
     development.
       ``(ii) Uncertified states and indian tribes.--A State or 
     Indian tribe that has not made a certification under 
     subsection (a) in which the Secretary has concurred shall use 
     any amounts provided under this paragraph for the purposes 
     described in section 403.
       ``(2) Subsequent state and indian tribe share for certified 
     states and indian tribes.--
       ``(A) In general.--Notwithstanding section 401(f)(3)(B), 
     from funds referred to in section 402(i)(2), the Secretary 
     shall pay to each certified State or Indian tribe an amount 
     equal to the sum of the aggregate unappropriated amount 
     allocated on or after October 1, 2007, to the certified State 
     or Indian tribe under subparagraph (A) or (B) of section 
     402(g)(1).
       ``(B) Certified state or indian tribe defined.--In this 
     paragraph the term `certified State or Indian tribe' means a 
     State or Indian tribe for which a certification is made under 
     subsection (a) in which the Secretary concurs.
       ``(3) Manner of payment.--
       ``(A) In general.--Subject to subparagraph (B), payments to 
     States or Indian tribes under this subsection shall be made 
     without regard to any limitation in section 401(d) and 
     concurrently with payments to States under that section.
       ``(B) Initial payments.--The first 3 payments made to any 
     State or Indian tribe shall be reduced to 25 percent, 50 
     percent, and 75 percent, respectively, of the amounts 
     otherwise required under paragraph (2)(A).
       ``(C) Installments.--Amounts withheld from the first 3 
     annual installments as provided under subparagraph (B) shall 
     be paid in 2 equal annual installments beginning with fiscal 
     year 2018.
       ``(4) Reallocation.--
       ``(A) In general.--The amount allocated to any State or 
     Indian tribe under subparagraph (A) or (B) of section 
     402(g)(1) that is paid to the State or Indian tribe as a 
     result of a payment under paragraph (1) or (2) shall be 
     reallocated and available for grants under section 402(g)(5).
       ``(B) Allocation.--The grants shall be allocated based on 
     the amount of coal historically produced before August 3, 
     1977, in the same manner as under section 402(g)(5).''.

     SEC. 317. REMINING INCENTIVES.

       Title IV of the Surface Mining Control and Reclamation Act 
     of 1977 (30 U.S.C. 1231 et seq.) is amended by adding at the 
     following:

     ``SEC. 415. REMINING INCENTIVES.

       ``(a) In General.--Notwithstanding any other provision of 
     this Act, the Secretary may, after opportunity for public 
     comment, promulgate regulations that describe conditions 
     under which amounts in the fund may be used to provide 
     incentives to promote remining of eligible land under section 
     404 in a manner that leverages the use of amounts from the 
     fund to achieve more reclamation with respect to the eligible 
     land than would be achieved without the incentives.
       ``(b) Requirements.--Any regulations promulgated under 
     subsection (a) shall specify that the incentives shall apply 
     only if the Secretary determines, with the concurrence of the 
     State regulatory authority referred to in title V, that, 
     without the incentives, the eligible land would not be likely 
     to be remined and reclaimed.
       ``(c) Incentives.--
       ``(1) In general.--Incentives that may be considered for 
     inclusion in the regulations promulgated under subsection (a) 
     include, but are not limited to--
       ``(A) a rebate or waiver of the reclamation fees required 
     under section 402(a); and
       ``(B) the use of amounts in the fund to provide financial 
     assurance for remining operations in lieu of all or a portion 
     of the performance bonds required under section 509.
       ``(2) Limitations.--
       ``(A) Use.--A rebate or waiver under paragraph (1)(A) shall 
     be used only for operations that--
       ``(i) remove or reprocess abandoned coal mine waste; or
       ``(ii) conduct remining activities that meet the priorities 
     specified in paragraph (1) or (2) of section 403(a).
       ``(B) Amount.--The amount of a rebate or waiver provided as 
     an incentive under paragraph (1)(A) to remine or reclaim 
     eligible land shall not exceed the estimated cost of 
     reclaiming the eligible land under this section.''.

     SEC. 318. EXTENSION OF LIMITATION ON APPLICATION OF 
                   PROHIBITION ON ISSUANCE OF PERMIT.

       Section 510(e) of the Surface Mining Control and 
     Reclamation Act of 1977 (30 U.S.C. 1260(e)) is amended by 
     striking the last sentence.

     SEC. 319. TRIBAL REGULATION OF SURFACE COAL MINING AND 
                   RECLAMATION OPERATIONS.

       (a) In General.--Section 710 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1300) is amended by 
     adding at the end the following:
       ``(j) Tribal Regulatory Authority.--
       ``(1) Tribal regulatory programs.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, an Indian tribe may apply for, and obtain the approval 
     of, a tribal program under section 503 regulating in

[[Page 16469]]

     whole or in part surface coal mining and reclamation 
     operations on reservation land under the jurisdiction of the 
     Indian tribe using the procedures of section 504(e).
       ``(B) References to state.--For purposes of this subsection 
     and the implementation and administration of a tribal program 
     under title V, any reference to a `State' in this Act shall 
     be considered to be a reference to a `tribe'.
       ``(2) Conflicts of interest.--
       ``(A) In general.--The fact that an individual is a member 
     of an Indian tribe does not in itself constitute a violation 
     of section 201(f).
       ``(B) Employees of tribal regulatory authority.--Any 
     employee of a tribal regulatory authority shall not be 
     eligible for a per capita distribution of any proceeds from 
     coal mining operations conducted on Indian reservation lands 
     under this Act.
       ``(3) Sovereign immunity.--To receive primary regulatory 
     authority under section 504(e), an Indian tribe shall waive 
     sovereign immunity for purposes of section 520 and paragraph 
     (4).
       ``(4) Judicial review.--
       ``(A) Civil actions.--
       ``(i) In general.--After exhausting all tribal remedies 
     with respect to a civil action arising under a tribal program 
     approved under section 504(e), an interested party may file a 
     petition for judicial review of the civil action in the 
     United States circuit court for the circuit in which the 
     surface coal mining operation named in the petition is 
     located.
       ``(ii) Scope of review.--

       ``(I) Questions of law.--The United States circuit court 
     shall review de novo any questions of law under clause (i).
       ``(II) Findings of fact.--The United States circuit court 
     shall review findings of fact under clause (i) using a 
     clearly erroneous standard.

       ``(B) Criminal actions.--Any criminal action brought under 
     section 518 with respect to surface coal mining or 
     reclamation operations on Indian reservation lands shall be 
     brought in--
       ``(i) the United States District Court for the District of 
     Columbia; or
       ``(ii) the United States district court in which the 
     criminal activity is alleged to have occurred.
       ``(5) Grants.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     grants for developing, administering, and enforcing tribal 
     programs approved in accordance with section 504(e) shall be 
     provided to an Indian tribe in accordance with section 705.
       ``(B) Exception.--Notwithstanding subparagraph (A), the 
     Federal share of the costs of developing, administering, and 
     enforcing an approved tribal program shall be 100 percent.
       ``(6) Report.--Not later than 18 months after the date on 
     which a tribal program is approved under subsection (e) of 
     section 504, the Secretary shall submit to the appropriate 
     committees of Congress a report, developed in cooperation 
     with the applicable Indian tribe, on the tribal program that 
     includes a recommendation of the Secretary on whether primary 
     regulatory authority under that subsection should be expanded 
     to include additional Indian lands.''.
       (b) Conforming Amendment.--Section 710(i) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1300(i)) is amended in the first sentence by striking ``, 
     except'' and all that follows through ``section 503''.

          Subtitle B--Coal Industry Retiree Health Benefit Act

     SEC. 321. CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST 
                   RELIEVED OF LIABILITY IF PREMIUMS PREPAID.

       (a) Combined Benefit Fund.--
       (1) In general.--Section 9704 of the Internal Revenue Code 
     of 1986 (relating to liability of assigned operators) is 
     amended by adding at the end the following new subsection:
       ``(j) Prepayment of Premium Liability.--
       ``(1) In general.--If--
       ``(A) a payment meeting the requirements of paragraph (3) 
     is made to the Combined Fund by or on behalf of--
       ``(i) any assigned operator to which this subsection 
     applies, or
       ``(ii) any related person to any assigned operator 
     described in clause (i), and
       ``(B) the common parent of the controlled group of 
     corporations described in paragraph (2)(B) is jointly and 
     severally liable for any premium under this section which 
     (but for this subsection) would be required to be paid by the 
     assigned operator or related person,
     then such common parent (and no other person) shall be liable 
     for such premium.
       ``(2) Assigned operators to which subsection applies.--
       ``(A) In general.--This subsection shall apply to any 
     assigned operator if--
       ``(i) the assigned operator (or a related person to the 
     assigned operator)--

       ``(I) made contributions to the 1950 UMWA Benefit Plan and 
     the 1974 UMWA Benefit Plan for employment during the period 
     covered by the 1988 agreement; and
       ``(II) is not a 1988 agreement operator,

       ``(ii) the assigned operator (and all related persons to 
     the assigned operator) are not actively engaged in the 
     production of coal as of July 1, 2005, and
       ``(iii) the assigned operator was, as of July 20, 1992, a 
     member of a controlled group of corporations described in 
     subparagraph (B).
       ``(B) Controlled group of corporations.--A controlled group 
     of corporations is described in this subparagraph if the 
     common parent of such group is a corporation the shares of 
     which are publicly traded on a United States exchange.
       ``(C) Coordination with repeal of assignments.--A person 
     shall not fail to be treated as an assigned operator to which 
     this subsection applies solely because the person ceases to 
     be an assigned operator by reason of section 9706(h)(1) if 
     the person otherwise meets the requirements of this 
     subsection and is liable for the payment of premiums under 
     section 9706(h)(3).
       ``(D) Controlled group.--For purposes of this subsection, 
     the term `controlled group of corporations' has the meaning 
     given such term by section 52(a).
       ``(3) Requirements.--A payment meets the requirements of 
     this paragraph if--
       ``(A) the amount of the payment is not less than the 
     present value of the total premium liability under this 
     chapter with respect to the Combined Fund of the assigned 
     operators or related persons described in paragraph (1) or 
     their assignees, as determined by the operator's or related 
     person's enrolled actuary (as defined in section 7701(a)(35)) 
     using actuarial methods and assumptions each of which is 
     reasonable and which are reasonable in the aggregate, as 
     determined by such enrolled actuary;
       ``(B) such enrolled actuary files with the Secretary of 
     Labor a signed actuarial report containing--
       ``(i) the date of the actuarial valuation applicable to the 
     report; and
       ``(ii) a statement by the enrolled actuary signing the 
     report that, to the best of the actuary's knowledge, the 
     report is complete and accurate and that in the actuary's 
     opinion the actuarial assumptions used are in the aggregate 
     reasonably related to the experience of the operator and to 
     reasonable expectations; and
       ``(C) 90 calendar days have elapsed after the report 
     required by subparagraph (B) is filed with the Secretary of 
     Labor, and the Secretary of Labor has not notified the 
     assigned operator in writing that the requirements of this 
     paragraph have not been satisfied.
       ``(4) Use of prepayment.--The Combined Fund shall--
       ``(A) establish and maintain an account for each assigned 
     operator or related person by, or on whose behalf, a payment 
     described in paragraph (3) was made,
       ``(B) credit such account with such payment (and any 
     earnings thereon), and
       ``(C) use all amounts in such account exclusively to pay 
     premiums that would (but for this subsection) be required to 
     be paid by the assigned operator.

     Upon termination of the obligations for the premium liability 
     of any assigned operator or related person for which such 
     account is maintained, all funds remaining in such account 
     (and earnings thereon) shall be refunded to such person as 
     may be designated by the common parent described in paragraph 
     (1)(B).''.
       (b) Individual Employer Plans.--Section 9711(c) of the 
     Internal Revenue Code of 1986 (relating to joint and several 
     liability) is amended to read as follows:
       ``(c) Joint and Several Liability of Related Persons.--
       ``(1) In general.--Except as provided in paragraph (2), 
     each related person of a last signatory operator to which 
     subsection (a) or (b) applies shall be jointly and severally 
     liable with the last signatory operator for the provision of 
     health care coverage described in subsection (a) or (b).
       ``(2) Liability limited if security provided.--If--
       ``(A) security meeting the requirements of paragraph (3) is 
     provided by or on behalf of--
       ``(i) any last signatory operator which is an assigned 
     operator described in section 9704(j)(2), or
       ``(ii) any related person to any last signatory operator 
     described in clause (i), and
       ``(B) the common parent of the controlled group of 
     corporations described in section 9704(j)(2)(B) is jointly 
     and severally liable for the provision of health care under 
     this section which, but for this paragraph, would be required 
     to be provided by the last signatory operator or related 
     person,

     then, as of the date the security is provided, such common 
     parent (and no other person) shall be liable for the 
     provision of health care under this section which the last 
     signatory operator or related person would otherwise be 
     required to provide. Security may be provided under this 
     paragraph without regard to whether a payment was made under 
     section 9704(j).
       ``(3) Security.--Security meets the requirements of this 
     paragraph if--
       ``(A) the security--
       ``(i) is in the form of a bond, letter of credit, or cash 
     escrow,
       ``(ii) is provided to the trustees of the 1992 UMWA Benefit 
     Plan solely for the purpose of paying premiums for 
     beneficiaries who would be described in section 9712(b)(2)(B) 
     if the requirements of this section were not met by the last 
     signatory operator, and
       ``(iii) is in an amount equal to 1 year of liability of the 
     last signatory operator under

[[Page 16470]]

     this section, determined by using the average cost of such 
     operator's liability during the prior 3 calendar years;
       ``(B) the security is in addition to any other security 
     required under any other provision of this title; and
       ``(C) the security remains in place for 5 years.
       ``(4) Refunds of security.--The remaining amount of any 
     security provided under this subsection (and earnings 
     thereon) shall be refunded to the last signatory operator as 
     of the earlier of--
       ``(A) the termination of the obligations of the last 
     signatory operator under this section, or
       ``(B) the end of the 5-year period described in paragraph 
     (4)(C).''.
       (c) 1992 UMWA Benefit Plan.--Section 9712(d)(4) of the 
     Internal Revenue Code of 1986 (relating to joint and several 
     liability) is amended by adding at the end the following new 
     sentence: ``The provisions of section 9711(c)(2) shall apply 
     to any last signatory operator described in such section 
     (without regard to whether security is provided under such 
     section, a payment is made under section 9704(j), or both) 
     and if security meeting the requirements of section 
     9711(c)(3) is provided, the common parent described in 
     section 9711(c)(2)(B) shall be exclusively responsible for 
     any liability for premiums under this section which, but for 
     this sentence, would be required to be paid by the last 
     signatory operator or any related person.''.
       (d) Successor in Interest.--Section 9701(c) of the Internal 
     Revenue Code of 1986 (relating to terms relating to 
     operators) is amended by adding at the end the following new 
     paragraph:
       ``(8) Successor in interest.--
       ``(A) Safe harbor.--The term `successor in interest' shall 
     not include any person who--
       ``(i) is an unrelated person to an eligible seller 
     described in subparagraph (C); and
       ``(ii) purchases for fair market value assets, or all of 
     the stock, of a related person to such seller, in a bona 
     fide, arm's-length sale.
       ``(B) Unrelated person.--The term `unrelated person' means 
     a purchaser who does not bear a relationship to the eligible 
     seller described in section 267(b).
       ``(C) Eligible seller.--For purposes of this paragraph, the 
     term `eligible seller' means an assigned operator described 
     in section 9704(j)(2) or a related person to such assigned 
     operator.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act, 
     except that the amendment made by subsection (d) shall apply 
     to transactions after the date of the enactment of this Act.

     SEC. 322. TRANSFERS TO FUNDS; PREMIUM RELIEF.

       (a) Combined Fund.--
       (1) Federal transfers.--Section 9705(b) of the Internal 
     Revenue Code of 1986 (relating to transfers from Abandoned 
     Mine Reclamation Fund) is amended--
       (A) in paragraph (1), by striking ``section 402(h)'' and 
     inserting ``subsections (h) and (i) of section 402'';
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Use of funds.--Any amount transferred under paragraph 
     (1) for any fiscal year shall be used to pay benefits and 
     administrative costs of beneficiaries of the Combined Fund or 
     for such other purposes as are specifically provided in the 
     Acts described in paragraph (1).''; and
       (C) by striking ``From Abandoned Mine Reclamation Fund''.
       (2) Modifications of premiums to reflect federal 
     transfers.--
       (A) Elimination of unassigned beneficiaries premium.--
     Section 9704(d) of such Code (establishing unassigned 
     beneficiaries premium) is amended to read as follows:
       ``(d) Unassigned Beneficiaries Premium.--
       ``(1) Plan years ending on or before september 30, 2006.--
     For plan years ending on or before September 30, 2006, the 
     unassigned beneficiaries premium for any assigned operator 
     shall be equal to the applicable percentage of the product of 
     the per beneficiary premium for the plan year multiplied by 
     the number of eligible beneficiaries who are not assigned 
     under section 9706 to any person for such plan year.
       ``(2) Plan years beginning on or after october 1, 2006.--
       ``(A) In general.--For plan years beginning on or after 
     October 1, 2006, subject to subparagraph (B), there shall be 
     no unassigned beneficiaries premium, and benefit costs with 
     respect to eligible beneficiaries who are not assigned under 
     section 9706 to any person for any such plan year shall be 
     paid from amounts transferred under section 9705(b).
       ``(B) Inadequate transfers.--If, for any plan year 
     beginning on or after October 1, 2006, the amounts 
     transferred under section 9705(b) are less than the amounts 
     required to be transferred to the Combined Fund under 
     subsection (h)(2)(A) or (i) of section 402 of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232)), 
     then the unassigned beneficiaries premium for any assigned 
     operator shall be equal to the operator's applicable 
     percentage of the amount required to be so transferred which 
     was not so transferred.''.
       (B) Premium accounts.--
       (i) Crediting of accounts.--Section 9704(e)(1) of such Code 
     (relating to premium accounts; adjustments) is amended by 
     inserting ``and amounts transferred under section 9705(b)'' 
     after ``premiums received''.
       (ii) Surpluses attributable to public funding.--Section 
     9704(e)(3)(A) of such Code is amended by adding at the end 
     the following new sentence: ``Amounts credited to an account 
     from amounts transferred under section 9705(b) shall not be 
     taken into account in determining whether there is a surplus 
     in the account for purposes of this paragraph.''
       (C) Applicable percentage.--Section 9704(f)(2) of such Code 
     (relating to annual adjustments) is amended by adding at the 
     end the following new subparagraph:
       ``(C) In the case of plan years beginning on or after 
     October 1, 2007, the total number of assigned eligible 
     beneficiaries shall be reduced by the eligible beneficiaries 
     whose assignments have been revoked under section 9706(h).''.
       (3) Assignments and reassignment.--Section 9706 of the 
     Internal Revenue Code of 1986 (relating to assignment of 
     eligible beneficiaries) is amended by adding at the end the 
     following:
       ``(h) Assignments as of October 1, 2007.--
       ``(1) In general.--Subject to the premium obligation set 
     forth in paragraph (3), the Commissioner of Social Security 
     shall--
       ``(A) revoke all assignments to persons other than 1988 
     agreement operators for purposes of assessing premiums for 
     plan years beginning on and after October 1, 2007; and
       ``(B) make no further assignments to persons other than 
     1988 agreement operators, except that no individual who 
     becomes an unassigned beneficiary by reason of subparagraph 
     (A) may be assigned to a 1988 agreement operator.
       ``(2) Reassignment upon purchase.--This subsection shall 
     not be construed to prohibit the reassignment under 
     subsection (b)(2) of an eligible beneficiary.
       ``(3) Liability of persons during three fiscal years 
     beginning on and after october 1, 2007.--In the case of each 
     of the fiscal years beginning on October 1, 2007, 2008, and 
     2009, each person other than a 1988 agreement operator shall 
     pay to the Combined Fund the following percentage of the 
     amount of annual premiums that such person would otherwise be 
     required to pay under section 9704(a), determined on the 
     basis of assignments in effect without regard to the 
     revocation of assignments under paragraph (1)(A):
       ``(A) For the fiscal year beginning on October 1, 2007, 55 
     percent.
       ``(B) For the fiscal year beginning on October 1, 2008, 40 
     percent.
       ``(C) For the fiscal year beginning on October 1, 2009, 15 
     percent.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to plan years of the Combined Fund beginning 
     after September 30, 2006.
       (b) 1992 UMWA Benefit and Other Plans.--
       (1) Transfers to plans.--Section 9712(a) of the Internal 
     Revenue Code of 1986 (relating to the establishment and 
     coverage of the 1992 UMWA Benefit Plan) is amended by adding 
     at the end the following:
       ``(3) Transfers under other federal statutes.--
       ``(A) In general.--The 1992 UMWA Benefit Plan shall include 
     any amount transferred to the plan under subsections (h) and 
     (i) of section 402 of the Surface Mining Control and 
     Reclamation Act of 1977 (30 U.S.C. 1232).
       ``(B) Use of funds.--Any amount transferred under 
     subparagraph (A) for any fiscal year shall be used to provide 
     the health benefits described in subsection (c) with respect 
     to any beneficiary for whom no monthly per beneficiary 
     premium is paid pursuant to paragraph (1)(A) or (3) of 
     subsection (d).
       ``(4) Special rule for 1993 plan.--
       ``(A) In general.--The plan described in section 
     402(h)(2)(C) of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1232(h)(2)(C)) shall include any 
     amount transferred to the plan under subsections (h) and (i) 
     of the Surface Mining Control and Reclamation Act of 1977 (30 
     U.S.C. 1232).
       ``(B) Use of funds.--Any amount transferred under 
     subparagraph (A) for any fiscal year shall be used to provide 
     the health benefits described in section 402(h)(2)(C)(i) of 
     the Surface Mining Control and Reclamation Act of 1977 (30 
     U.S.C. 1232(h)(2)(C)(i)) to individuals described in section 
     402(h)(2)(C) of such Act (30 U.S.C. 1232(h)(2)(C)).''.
       (2) Premium adjustments.--
       (A) In general.--Section 9712(d)(1) of such Code (relating 
     to guarantee of benefits) is amended to read as follows:
       ``(1) In general.--All 1988 last signatory operators shall 
     be responsible for financing the benefits described in 
     subsection (c) by meeting the following requirements in 
     accordance with the contribution requirements established in 
     the 1992 UMWA Benefit Plan:
       ``(A) The payment of a monthly per beneficiary premium by 
     each 1988 last signatory operator for each eligible 
     beneficiary of such operator who is described in subsection 
     (b)(2) and who is receiving benefits under the 1992 UMWA 
     benefit plan.
       ``(B) The provision of a security (in the form of a bond, 
     letter of credit, or cash escrow) in an amount equal to a 
     portion of the

[[Page 16471]]

     projected future cost to the 1992 UMWA Benefit Plan of 
     providing health benefits for eligible and potentially 
     eligible beneficiaries attributable to the 1988 last 
     signatory operator.
       ``(C) If the amounts transferred under subsection (a)(3) 
     are less than the amounts required to be transferred to the 
     1992 UMWA Benefit Plan under subsections (h) and (i) of 
     section 402 of the Surface Mining Control and Reclamation Act 
     of 1977 (30 U.S.C. 1232), the payment of an additional 
     backstop premium by each 1988 last signatory operator which 
     is equal to such operator's share of the amounts required to 
     be so transferred but which were not so transferred, 
     determined on the basis of the number of eligible and 
     potentially eligible beneficiaries attributable to the 
     operator.''.
       (B) Conforming amendments.--Section 9712(d) of such Code is 
     amended--
       (i) in paragraph (2)(B), by striking ``prefunding'' and 
     inserting ``backstop'', and
       (ii) in paragraph (3), by striking ``paragraph (1)(B)'' and 
     inserting ``paragraph (1) (A)''.
       (C) Effective date.--The amendments made by this paragraph 
     shall apply to fiscal years beginning on or after October 1, 
     2010.

     SEC. 323. OTHER PROVISIONS.

       (a) Board of Trustees.--Section 9702(b) of the Internal 
     Revenue Code of 1986 (relating to board of trustees of the 
     Combined Fund) is amended to read as follows:
       ``(b) Board of Trustees.--
       ``(1) In general.--For purposes of subsection (a), the 
     board of trustees for the Combined Fund shall be appointed as 
     follows:
       ``(A) 2 individuals who represent employers in the coal 
     mining industry shall be designated by the BCOA;
       ``(B) 2 individuals designated by the United Mine Workers 
     of America; and
       ``(C) 3 individuals selected by the individuals appointed 
     under subparagraphs (A) and (B).
       ``(2) Successor trustees.--Any successor trustee shall be 
     appointed in the same manner as the trustee being succeeded. 
     The plan establishing the Combined Fund shall provide for the 
     removal of trustees.
       ``(3) Special rule.--If the BCOA ceases to exist, any 
     trustee or successor under paragraph (1)(A) shall be 
     designated by the 3 employers who were members of the BCOA on 
     the enactment date and who have been assigned the greatest 
     number of eligible beneficiaries under section 9706.''.
       (b) Enforcement of Obligations.--
       (1) Failure to pay premiums.--Section 9707(a) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(a) Failures to Pay.--
       ``(1) Premiums for eligible beneficiaries.--There is hereby 
     imposed a penalty on the failure of any assigned operator to 
     pay any premium required to be paid under section 9704 with 
     respect to any eligible beneficiary.
       ``(2) Contributions required under the mining laws.--There 
     is hereby imposed a penalty on the failure of any person to 
     make a contribution required under section 402(h)(5)(B)(ii) 
     of the Surface Mining Control and Reclamation Act of 1977 to 
     a plan referred to in section 402(h)(2)(C) of such Act. For 
     purposes of applying this section, each such required monthly 
     contribution for the hours worked of any individual shall be 
     treated as if it were a premium required to be paid under 
     section 9704 with respect to an eligible beneficiary.''.
       (2) Civil enforcement.--Section 9721 of such Code is 
     amended to read as follows:

     ``SEC. 9721. CIVIL ENFORCEMENT.

       ``The provisions of section 4301 of the Employee Retirement 
     Income Security Act of 1974 shall apply, in the same manner 
     as any claim arising out of an obligation to pay withdrawal 
     liability under subtitle E of title IV of such Act, to any 
     claim--
       ``(1) arising out of an obligation to pay any amount 
     required to be paid by this chapter; or
       ``(2) arising out of an obligation to pay any amount 
     required by section 402(h)(5)(B)(ii) of the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 
     1232(h)(5)(B)(ii)).''.

                   TITLE IV--INCREASE IN MINIMUM WAGE

     SEC. 401. MINIMUM WAGE.

       Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 206(a)(1)) is amended to read as follows:
       ``(1) except as otherwise provided in this section, not 
     less than--
       ``(A) $5.15 an hour beginning September 1, 1997;
       ``(B) $5.85 an hour, beginning on January 1, 2007;
       ``(C) $6.55 an hour, beginning June 1, 2008; and
       ``(D) $7.25 an hour, beginning June 1, 2009;''.

     SEC. 402. TIPPED WAGE FAIRNESS.

       Section 3(m) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 203(m)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively;
       (2) by striking ```Wage' paid to any employee'' and 
     inserting ``(1) `Wage' paid to any employee'';
       (3) in subparagraph (B) (as so redesignated), by inserting 
     before the period the following: ``: Provided, That the tips 
     shall not be included as part of the wage paid to an employee 
     to the extent that they are excluded therefrom under the 
     terms of a bona fide collective bargaining agreement 
     applicable to the particular employee''; and
       (4) by adding at the end of the following:
       ``(2) Notwithstanding any other provision of this Act, any 
     State or political subdivision of a State which on or after 
     the date of enactment of the Estate Tax and Extension of Tax 
     Relief Act of 2006 excludes all of a tipped employee's tips 
     from being considered as wages in determining if such tipped 
     employee has been paid the applicable minimum wage rate, may 
     not establish or enforce the minimum wage rate provisions of 
     such law, ordinance, regulation, or order in such State or 
     political subdivision thereof with respect to tipped 
     employees unless such law, ordinance, regulation, or order is 
     revised or amended to permit such employee to be paid a wage 
     by the employee's employer in an amount not less than an 
     amount equal to--
       ``(A) the cash wage paid such employee which is required 
     under such law, ordinance, regulation, or order on the date 
     of enactment of the Estate Tax and Extension of Tax Relief 
     Act of 2006; and
       ``(B) an additional amount on account of tips received by 
     such employee which amount is equal to the difference between 
     the cash wage described in subparagraph (A) and the minimum 
     wage rate in effect under such law, ordinance, regulation, or 
     order, or the minimum wage rate in effect under section 6(a), 
     whichever is higher.''.

  The SPEAKER pro tempore. Pursuant to House Resolution 966, the 
gentleman from California (Mr. Thomas) and the gentleman from New York 
(Mr. Rangel) each will control 30 minutes.
  The Chair recognizes the gentleman from California.
  Mr. THOMAS. Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I ask unanimous consent to yield 15 minutes 
my time to the gentleman from California (Mr. George Miller) for him to 
control.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield to the 
gentleman from Ohio (Mr. Kucinich) for the purpose of a unanimous 
consent request.
  Mr. KUCINICH. Mr. Speaker, I rise in opposition to the bill.
  I will quote from the Good Book, not the Internal Revenue Code, but 
the Bible, Mr. Speaker. Isaiah 10th Chapter, First and Second verse: 
``Woe to those who make unjust laws, to those who issue oppressive 
decrees, to deprive the poor of their rights and withhold justice from 
the oppressed of my people. . . .''
  Tonight we debate an unjust law which steals from the poor to give to 
the rich. It is unjust to attach a minimum wage increase to tax cuts 
for the rich. It would cost about $26 billion a year to give a $2.10 
increase in the minimum wage to the least wealthy workers. The estate 
tax cut could give about $80 billion per year for 10 years to 3 
families out of every 1,000.
  Some call it a death tax, cut this poison pill will be the death of 
the minimum wage increase for millions of working Americans.
  It is unjust that here, in the richest country on earth, there is no 
guarantee that a full-time job will lift a family out of a situation of 
dire poverty. That's because full-time year-round minimum wage earnings 
at $5.15 an hour leave a family of three $5,000 below the poverty line.
  Since 1997, the last minimum wage increase, the cost of living has 
increased for all Americans. The cost of putting food on the table, of 
keeping a roof over your head, the cost of gas--all going up, up, up. 
The only thing that hasn't increased is the minimum wage. Congress's 
response: Give a tax cut to the wealthiest Americans. This is a perfect 
example of single-minded economic policy--surpluses: tax cuts to the 
wealthy; deficits: tax cuts to the wealthy; war: tax cuts to the 
wealthy; high gas prices: tax cuts to the wealthy. A much needed 
increase in the minimum wage to the humblest of workers: tax cuts to 
the wealthy.
  ``Woe to those who make unjust laws'' said Isaiah.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield 2\1/2\ minutes 
to the gentleman from Maryland (Mr. Hoyer).

                              {time}  2345

  Mr. HOYER. I thank the gentleman for yielding, and I rise in 
opposition to this bill and to lament the fact that we did not do what 
250 Members of this House want to do.
  Mr. Speaker, 250 Members of this House have indicated they want to 
see a raise in the minimum wage, that they want to see it now, and they 
want

[[Page 16472]]

to see it in a simple straightforward bill to say to those working at 
the lowest rungs in America, doing what we expect them to do, working 
day to day, week to week, month to month, year to year to support 
themselves, their family, and contribute to the welfare of our country. 
We expect them to work; we ought to pay them. We ought to pay them a 
wage that does not leave them in poverty.
  We could do that, because 250 of us would vote for such a bill. But, 
unfortunately, once again, we are playing a game. This bill was 
referred to as an Estate Tax Bill, not a minimum-wage bill. Minimum 
wage is included in the Estate Tax Bill. But that is the reason you put 
this bill on the floor, to pass a bill you have already passed but 
can't pass the Senate, or at least has not passed the Senate.
  Therefore, attaching the minimum wage, which 48 of your Republican 
colleagues say they want to be for, is to design a process for failure. 
Not a failure for us, none of us work for the minimum wage; but a 
failure for 6.6 million people and, indeed, some 12 million more people 
who rely on help from those earning the minimum wage to support 
themselves and their families.
  How sad. How sad that a 250-Member majority of the House of 
Representatives cannot summon the will or the courage or the good sense 
to offer simply a bill which does what we want it to do, to raise from 
$5.15 the minimum wage over three increments to $7.25.
  If a minimum-wage worker was earning now what he or she earned in 
1968, they would be earning $9.05 an hour. This bill simply has an 
increase to $7.25, the bill that we proposed. Now, we will have that 
available in a motion to recommit, along with the extenders that 
everybody is for, which could have passed on a separate suspension 
bill, I suspect. But the fact of the matter is that this bill is 
designed to fail because the majority leadership opposes raising the 
minimum wage. How sad. How shameful.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Does anyone here think it is rather odd if we designed a bill to fail 
we would place in it what apparently the Members on the other side say 
is one of our really primary focuses, and that is to allow people who 
have worked all their lives to hang on to a little bit of what they get 
after death for their family? Why would you couple those two together 
if you wanted it to fail?
  The so-called extenders are 7 months overdue. They need to be 
extended. Why would you put a minimum wage in this structure, and 
extenders, if you built a bill to fail?
  I think it is going to be very tortured discussion on the floor, 
because our colleagues on the other side just can't quite get their 
arms around the fact that the Republicans are for a significant change 
in the estate tax, they are for extending the extenders, and we are for 
a minimum wage.
  All you have to do is vote ``yes.'' Now, that probably is your 
biggest difficulty, voting ``yes'' on a bill that is in front of you. 
If you vote ``yes,'' as the gentleman from Maryland said, minimum wage 
goes from $5.15 to $7.25. If you vote ``yes,'' you join us in 
encouraging the Senate. And if you want to find the graveyard for the 
minimum wage, I suggest you go over and visit the other body.
  What we have done is tried to package this to succeed in getting the 
minimum wage through the other body. And if we can work together, all 
you have to do is start by voting ``yes,'' and then it could be 
contagious, we could go over and get the Senate to vote ``yes,'' and we 
could have a minimum-wage increase to $7.25 in 3 years. We could also 
extend the extenders, and we could also have a very reasonable 
appropriate structure for allowing people to hang on to a little bit 
more of what they work for and accumulate over their lifetime.
  I know the cost of making that happen is high. It means you'd 
actually have to vote ``yes.''
  Mr. Speaker, I reserve the balance of my time.
  Mr. GEORGE MILLER of California. I yield 2 minutes to the gentleman 
from New Jersey (Mr. Andrews).
  Mr. ANDREWS. No bill more clearly captures the distorted values of 
the majority of the House than the bill before us right now. People who 
earn the minimum wage and work full time mostly live below the poverty 
level, and they have been waiting for a very long time for a raise in 
their pay.
  This bill says to those who wash dishes and launder laundry and clean 
houses, you got to wait just a little bit longer for that raise. You 
have to wait until the wealthiest people in the country are able to see 
their heirs pay little or no tax on the wealth that is passed to the 
next generation.
  Now, the idea of reducing or eliminating the estate tax may or may 
not have merit, and that idea deserves a free and separate debate on 
this floor, but so does the idea of raising the minimum wage for those 
at the bottom of the ladder in this country. This shows us who comes 
first. This bill says those that launder laundry and clean rooms and 
work in car washes will wait their turn until the wealthiest people in 
the country can pass off wealth to their heirs. They come first.
  This is a shameful distortion of the country's values. We should vote 
now and we should vote ``yes'' for an increase in the minimum wage, 
free and clear of this distortion of values for the estate tax. Vote 
against this bill.
  Mr. THOMAS. Mr. Speaker, I yield myself briefly.
  Gee, I know you work for the minimum wage, and I know you want a 
higher minimum wage, but the way the offer was packaged was such that I 
had to vote ``no.'' So don't blame me that you didn't get an increase 
in the minimum wage, because I voted ``no.''
  As I said, this is going to be very difficult. All you have to do is 
vote ``yes.''
  Mr. Speaker, it is my pleasure now to yield 3 minutes to the 
gentleman from New York (Mr. Sweeney).
  Mr. SWEENEY. I thank the gentleman for yielding time.
  Mr. Speaker, I came here tonight to vote for much-needed pension 
reform and to provide Americans with a better living wage. And I would 
have preferred a simpler, more straightforward minimum-wage vote as 
well. In fact, I voted that way in the Appropriations Committee. I 
voted for Mr. Hoyer's provision that extended the minimum wage for 30 
months, or extended a raise for 30 months to $7.15.
  I come here tonight to say that I am going to vote for this bill, and 
I had actually hoped to vote for the Democratic motion to recommit, if 
it had been a simple, straightforward proposition to vote. And I note 
that the Democrats have had a number of opportunities to bring a 
straightforward minimum-wage vote to the floor, as they have done in a 
variety of other instances on a variety of other issues, but never have 
done it.
  So it leads me to this one thought, that if we are actually serious 
about the minimum wage and passing a minimum-wage increase, and I say 
this as a former State labor commissioner and I say this as someone who 
worked numerous minimum-wage jobs over the course of my life, I say 
this as someone who comes from a blue collar background, not a 
privileged background, and I would note that some of the leadership on 
the other side comes from much better standing than I, you would have 
brought that bill and worked in good faith to negotiate. But that 
didn't happen. That didn't happen because politics won the day here. 
Rather than passing a minimum-wage increase, it was decided that we 
wanted to preserve an issue. That is wrong. It doesn't serve the 
American people.
  In terms of including the estate tax, what I had said all along is I 
would like to see a minimum-wage increase, but we need offsets to small 
businesses and farmers who make up 90 percent of the employment in my 
district. So when you say that an estate tax, an extension of the 
estate tax isn't viable, doesn't belong in this bill, tell that to the 
farmers in my district like Tom Borden who runs the orchard and dairy 
farm in eastern New York; or Paul Schmidt, a dairy farmer in Posenkill, 
both of whom have been begging to see this estate tax eliminated for 
years so they can sleep at night knowing that despite all the hard work 
and all the government regulation and all the burdens that they have 
faced, they can

[[Page 16473]]

pass on to their family that valuable contribution to society that they 
have.
  So be careful. Be careful when you demagogue this issue. Be careful 
when you politicize this issue. This is about representing people. We 
need to pass a minimum wage. I am in favor of this bill, and I am going 
to oppose the motion to recommit, and I suggest my colleagues do the 
same.
  Mr. GEORGE MILLER of California. I yield 2 minutes to the gentlewoman 
from California (Ms. Waters).
  Ms. WATERS. Mr. Speaker, I rise in support of raising the minimum 
wage for the nearly 7 million minimum-wage American workers. However, I 
oppose this bill because it contains provisions unrelated to actually 
increasing the minimum wage. Those provisions should be voted on 
separately.
  As a matter of fact, I am really ashamed to be a Member of Congress 
at this point. The Republicans are playing tricks again. They have 
coupled another tax break for the richest in America with this minimum-
wage increase.
  Since 2001, this Republican Congress has cut taxes by $1.8 trillion, 
and most of these tax cuts have gone to the wealthiest 1 percent of 
Americans. Yet when it comes to helping low- and middle-income 
Americans, the Republican Party is nowhere to be seen. Even this vote 
came reluctantly and is tied to giveaways that will gut any increase in 
the minimum wage.
  Each day Americans are confronted with rising prices of everyday 
items they need: gasoline, home energy, and health care. These rising 
costs are stretching family budgets thin, preventing them from saving 
for a family emergency, education, a new home, or retirement.
  In California over the past 5 years, the cost of staple goods has 
risen at a steady rate. For example, the cost of milk has risen 23 
percent; housing has increased 45 percent; and child care has increased 
14 percent. However, the wages for thousands of workers have remained 
stagnant.
  The increase in the minimum wage is about one thing, Mr. Speaker, 
justice for American workers. Without an increase in the minimum wage, 
the American worker cannot enjoy life, liberty, and the pursuit of 
happiness. Quality of life is indeed important. Freedom to pursue one's 
dreams, whether it is in education or a new home, is freedom. Happiness 
is about fulfilling dreams. Workers earning the current stagnant 
minimum wage are simply not as happy as they should be in America.
  I oppose this legislation as drafted. I am ashamed to be here with 
these people who are denying the poorest of our society a decent 
living.
  Mr. THOMAS. Mr. Speaker, I yield myself briefly.
  All we have to do to provide an increase in the minimum wage is to 
vote ``yes.''
  And I wonder how that person working for a minimum wage feels when 
you say, I couldn't vote ``yes'' for the increase in the minimum wage 
because I was offended the way it was presented to us. And you need to 
know that the way I feel about the process in the House of 
Representatives is more important than providing you with an increase 
in the minimum wage.
  Mr. Speaker, it is now my pleasure to yield 2 minutes to the 
gentleman from Pennsylvania, a valued member of the Ways and Means 
Committee, Mr. English.

                              {time}  0000

  Mr. ENGLISH of Pennsylvania. Mr. Speaker, let me say what is sad and 
shameful here tonight is the argument being made by so-called 
progressives to justify their vote against raising the minimum wage. 
This legislation, granted, includes an extension of the work 
opportunity tax credit so that we can encourage more people to move off 
welfare onto the rolls. It includes extensions of the deduction for 
higher education expenses and the deduction for teachers for their day-
to-day expenses in the classroom. It includes expensing of mine safety 
equipment. It also improves access to lifesaving vaccines.
  Mr. Speaker, it also includes an increase in the minimum wage, 
something they led us to believe that they wanted to see, something 
that I have been fighting for for years, and they have done nothing to 
carry any heavy lifting on.
  Mr. Speaker, the one vote on raising the minimum wage in the House 
this year is this vote and we are going to take names, and workers are 
going to be watching.
  Mr. Speaker, this current minimum wage is an embarrassment. A 40-
hour-a-week worker at minimum wage makes just over $10,000. Working 
families are struggling to make ends meet, to address higher gas 
prices, to address rising home heating bills. And in the face of all of 
that, the so-called progressives are finding every imaginable excuse to 
vote against raising the minimum wage. They have always liked the 
politics of the minimum wage and generally cared little for the policy 
of the minimum wage. We have always clustered increases of the minimum 
wage with other issues. There is nothing novel about this.
  This is one up-or-down vote. The American people are going to be 
holding them accountable. And if they vote ``no,'' they are voting 
against raising the minimum wage. That includes the gentleman from Ohio 
who is running for the Senate and we are going to watch that one with a 
great deal of interest. There is only one vote this year for raising 
the minimum wage. It is this one. We are going to hold you accountable 
for how you vote on it, whether you hiss or not.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield 2 minutes to 
the gentleman from Ohio (Mr. Brown).
  Mr. BROWN of Ohio. Thank you, Mr. Miller, for your terrific 
leadership fighting for workers. And to my hypocritical friends on the 
other side of the aisle, I actually plan to vote for the minimum wage.
  I stand in honor of the millions of American workers trying to get by 
on a woefully inadequate minimum wage. On behalf of 500,000 Ohio 
workers and the Nation's 6 million workers, I will vote in favor of a 
minimum-wage increase tonight despite the dishonorable chicanery of the 
gentleman from Pennsylvania and his friends once again foisted on this 
Chamber by a Republican majority run amok.
  For 10 years, Democrats have tried to increase the minimum wage.
  Mr. ENGLISH of Pennsylvania. Will the gentleman yield?
  Mr. BROWN of Ohio. I yield to the gentleman from Pennsylvania.
  Mr. ENGLISH of Pennsylvania. Did the gentleman vote for raising the 
minimum wage the last time this came up in 1996?
  Mr. BROWN of Ohio. Of course I did.
  Mr. ENGLISH of Pennsylvania. And how did you distinguish this bill, 
which included tax provisions for a variety of small businesses, from 
this bill?
  Mr. BROWN of Ohio. I voted for it then. I plan to vote for it now.
  Mr. ENGLISH of Pennsylvania. So you voted for the chicanery then, and 
you are going to vote for it now. Congratulations.
  Mr. BROWN of Ohio. I reclaim my time.
  For 10 years, Democrats have tried to increase the minimum wage and 
Republicans have blocked it. Yet during the 10 years with no minimum 
wage increase, Congress, under Republican leadership, has increased its 
own pay six times. The CEO of ExxonMobil is paid more than $17,000 an 
hour while a minimum-wage worker who fills her tank with ExxonMobil gas 
earns less than $11,000 a year. Yet this bill puts first millions of 
dollars in tax cuts for the ExxonMobil CEO.
  Tonight it is clear why we need a change. That change is only 3 
months away.
  Mr. THOMAS. Mr. Speaker, I want to thank the gentleman from Ohio for 
his vote.
  I want to yield 3 minutes to the gentleman from New Jersey (Mr. 
LoBiondo).
  Mr. LoBIONDO. Mr. Speaker, I rise tonight in support of this minimum-
wage package which I think is long overdue. I would like to take the 
opportunity to thank Speaker Hastert and Majority Leader John Boehner. 
A week ago, not many people would have believed that we could have a 
vote on minimum wage this quickly. You have only to track the articles 
about it: did

[[Page 16474]]

not look possible, maybe sometime into the future. And I want to thank 
Congressman Steve LaTourette and the 48 or 50 other Republicans that 
stood along together with me in presenting our case to the Speaker and 
majority leader for why we should do this. We had a very spirited 
debate in our conference, and we probably will have a record number of 
Republicans that will be voting for a minimum-wage package tonight.
  Some Republicans are not happy about this. If I had my choice, this 
package would have looked a lot different. But we don't live in the 
world of the perfect, and we should not sacrifice the good for the 
perfect. The reality is, this is the minimum-wage vote. This vote 
actually has a chance of being signed into law. The reality is that 
probably a straight minimum-wage vote, that I would have preferred, 
might have been a good political exercise, but it stood no chance of 
passage in the Senate or a signature by the President. So if we really 
want to give relief to working men and women who so deserve this 
change, this 41 percent change, this is the opportunity.
  The minority has said that the extenders are fine. So we have one 
part of the package that you will find a problem with. I submit that 
because Republicans are doing this, you would have found one part of 
this package to have a problem with no matter what was in it.
  I would urge all of the Republican Labor Caucus members and, in fact, 
all of the Republican Conference, and the Democrats, to vote against 
the motion to recommit that will doom the minimum wage. Passage and 
vote for the bill sends a clear signal that we can find a combination, 
that we can find a way to come together. The definition of ``perfect'' 
is probably different for all 435 of us. But that is not what is at 
stake tonight. That is not what we are all about, finding the perfect. 
We are about finding something good. This is a good bill. We should 
vote for it.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield 2\1/2\ minutes 
to the gentleman from Washington (Mr. Inslee).
  Mr. INSLEE. The only people in the State of Washington whose wages 
will be affected by this bill, should it pass, will have their minimum 
wage decreased. Every single worker who receives tips in the State of 
Washington will have their minimum wage decreased $1.78 an hour as a 
result of this ridiculous bill. Seven States are in the same position: 
Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. 
In seven States in this country, the only people who will be affected 
by this bill are those who will get their minimum wage slashed.
  Where is the Republican desire to slash the minimum wage and call it 
an increase in the minimum wage? That is what you have written into 
this bill.
  Now, we realize this bill isn't going to pass, and you think you are 
going to get relief from the voters because you voted for this when it 
isn't going to pass. Well, if it did pass, you would be cutting the 
minimum wage in the State of Washington by $1.78 an hour. The people 
who feed you, when you take your $30,000 pay increases we all have had 
over the last several years, you take your $30,000 pay increases, and 
you tell the people that serve your tostadas and your spaghetti that 
you can cut their minimum wage by $1.78 an hour. If you doubt me, ask 
Molly on your staff. She will tell you I am right. I don't know who the 
brilliant guy was who thought that that is good policy in this country. 
We Democrats think it is a very bad idea.
  The situation is, you're not going to deliver a minimum wage of any 
dimension because of the way you packaged this, because you don't want 
to see a minimum-wage increase. That is why you packaged this with a 
poison pill. And this is not going to work for you, because mailmen who 
don't deliver the mail get punished. And you will be punished for this 
this November.
  I will just say one thing: when you cut the minimum wage for 
restaurant tip workers in this country, I will say this, it is bad 
enough when you don't do a minimum-wage bill; it is worse when you do. 
The point I want to make is this bill is not going to pass because they 
put a poison pill in it. But I want to make sure people understand in 
the States of Washington, Montana, Nevada, California, those States, 
that if it did pass, they would be cutting restaurant workers.
  Do you want to challenge that, Mr. Hayworth? I will yield to you. If 
you think that is wrong, you can walk up to your staff member and she 
will tell you that you are cutting restaurant workers $1.78 in the 
State of Washington. If you disagree with that, I will show you page 
181 of your bill.
  Mr. HAYWORTH. Mr. Speaker, will the gentleman yield?
  Mr. INSLEE. I yield to the gentleman from Arizona.
  Mr. HAYWORTH. Is the gentleman familiar with four letters, E-I-T-C, 
earned income tax credit?
  Mr. INSLEE. I am.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume. I 
was kind of stunned when my colleague from Ohio indicated that he was 
going to support this bill. I believe him when he wants to support it 
for the minimum wage. And then it struck me: he is not going to be in a 
gerrymandered district. He is running statewide. He is actually going 
to have to respond. In an environment where if he doesn't pick the 
position that people believe is the right one, he could lose. But if he 
were in a district in which he could vote virtually any way he wanted 
and wanted to slant the issues in ways that provided a political 
benefit rather than a real benefit, I just wonder.
  Gee, that means maybe if we had more competitive seats, we would have 
more folks voting for policies that actually benefit people like 
raising the minimum wage, because a ``yes'' vote tonight will raise the 
minimum wage.
  It is now my pleasure to yield 2 minutes to the gentleman from 
Illinois, a member of the Ways and Means Committee, Mr. Weller.
  Mr. WELLER. Mr. Speaker, I rise in support of what we have before us, 
which is good legislation, a package of legislation that is good for 
workers and a package of legislation that is good for small business. 
This legislation deserves bipartisan support.
  First, this bill raises the minimum wage. Today, the minimum wage is 
$5.15 an hour. Under this legislation, we raise it to $7.25 an hour. 
That is a 40 percent increase in the minimum wage. It is about time. I 
support this minimum wage increase. It is the right thing to do.
  This legislation does more, because it is a package. Of course, when 
you look into the package, look at the details, you see some good 
things that help our communities. One example is an important 
environmental cleanup tax credit, the brownfields tax credit, which is 
extended for 2 more years under this legislation. Not only is it 
extended, it is expanded to be able to do more. There are almost 2,000 
so-called brownfields in the region that I represent in the Chicago 
area. Forty percent of them have petroleum contamination. You think of 
that old abandoned gas station on that one prominent corner in your 
home community that has been sitting there for years and you always 
wonder, why doesn't somebody buy that and do something with that 
strategic corner in our town. It is because it has petroleum 
contamination. This tax incentive will help encourage private investors 
to buy that old abandoned gas station and other petroleum contaminated 
sites to recycle, revitalize and help rebuild neighborhoods. It is good 
legislation.

                              {time}  0015

  And if you care about low-income workers, particularly those who are 
on welfare, and you want to encourage them to get a job, you should 
vote for this legislation because we extend the work opportunity tax 
credit. We extend the welfare to work tax credit. This past year almost 
half a million American citizens had the opportunity to leave welfare 
and go to work.
  This legislation deserves bipartisan support.
  Mr. GEORGE MILLER of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker and Members of the House, it is rather interesting to see

[[Page 16475]]

my colleagues on the Republican side of the aisle ask us whether we 
know that the minimum wage is $5.15 an hour. Apparently, they have just 
discovered that fact. I would ask them did they know that the minimum 
wage was $5.15 an hour 10 years ago and 9 years ago and 8 years ago and 
7 years ago and 6 years ago and 5 years ago and 4 years ago? It was 
$5.15 an hour and you never raised a finger. You never raised a finger 
to help these individuals. We introduced a bill every year. I have 
asked for hearings in my committee every year to raise the minimum wage 
because these people have been stuck at $5.15 an hour. You control the 
House, you control the Senate, you control the White House. You could 
never find time for these people. You found time for the richest people 
in the country, but you never found time for the people at $5.15 an 
hour.
  Now, as your political fortunes change, you get a letter from the 
most vulnerable members of your caucus, and you discover that people 
are working for $5.15 an hour. But even then you cannot play it 
straight. No, the only way you can do this bill for the people whom you 
now recognize need help, and they have needed it for many years, is to 
put a poison pill into the minimum wage increase of the estate tax cut, 
knowing that you will send it off to the Senate and it will be 
embroiled in the 18 days that we have left in this session and there 
will be no increase in the minimum wage.
  You could vote for the motion to recommit. The extenders are not 
controversial. And apparently the minimum wage is not controversial on 
your side. Although when a clean minimum wage passed on the Health and 
Human Services appropriations bill, it came to a grinding stop, and 
your Speaker said we are not going to have a minimum wage increase, and 
your majority leader says, I haven't voted for one of these and I have 
not supported it for 25 years, with great pride. Did he know they were 
working for $5.15 an hour all that time? If he had his way, they would 
have been working for $3.15 an hour over the last 25 years.
  So tonight what are we presented with? The appearance of a minimum 
wage increase, but it is really about driving the estate tax. But it is 
about driving the estate tax into a hostile environment in the Senate, 
where you will argue and you will argue and you will argue and the 
session will end, and those same people that are working for $5.15 an 
hour today will be working for $5.15 an hour next year and next month. 
As much compassion as you felt for them, you decided they ought to wait 
longer to get $7.25 in the bill you presented. As much compassion as 
you felt for them, you decided if they work for tips, you would take 
away their wages in the States that Mr. Inslee pointed out, in 
Washington and California and elsewhere. They would lose their wages 
under this bill.
  So I think this newfound compassion is somewhat shallow, somewhat 
less than sincere for these people because you could not find time for 
them over the last 5 years. You could not find time to deal with their 
problems of working all year long and ending up with $10,700 and being 
in poverty. You could not find time for them when the price of gasoline 
went up and the price of rent went up and the price of education went 
up and the price of milk went up. You could not find time then. But all 
of a sudden, you can find time now, but only, only if you can stick it 
in with relief for the richest people in America, relief that you know 
will not happen in this legislation. And once again, these people will 
be denied. They will be denied at the hands of the Republican 
leadership that has been hostile to the minimum wage from the moment 
they came to this House of Representatives. They had never had any 
intention of supporting it, they had never voted for it, and it will 
not happen again.
  Mr. Speaker, I yield back the balance of my time.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 3 minutes to a 
valued member of the committee, the chairman of the House subcommittee, 
the gentlewoman from Connecticut (Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I rise in strong support of 
this legislation. I am proud, yes, for raising the minimum wage by 40 
percent.
  It is simple. Working families deserve a pay raise, and tonight we 
pass a 40 percent increase in the minimum wage. But this bill helps 
workers in many other ways.
  A permanent estate tax protects American jobs. In my district, an old 
manufacturing part of the Nation, most of our manufacturers, high 
quality, high skilled, are small and family owned. But to compete as a 
supplier in a global economy, they have to be good, and that takes 
expensive equipment. Dad dies, you have to sell off. You have to sell 
that family-owned business because you cannot afford the taxes. A 
permanent estate tax will let that family business survive and those 
jobs survive because you know what happens? Those small manufacturers 
get bought and the jobs leave town. They go to a bigger plant. They get 
merged in. So if you want to protect jobs in your town, we need a 
permanent estate tax because that way small family-owned manufacturers 
can survive.
  But we need this bill because it protects global jobs as well. If we 
do not extend the research and development tax credit in a world in 
which some countries write it off completely, we will not be at the 
cutting edge of product development. We will not be the leaders in 
communications technology, in clean-up technology, and in medical 
technology. We protect jobs and that helps the American workers. That 
is what this bill is all about.
  We also protect the opportunity for American workers to get the 
education they need to compete. That $4,000 tax deduction for education 
expenses, that is building the future. And it is not just people who 
can go to college. It is the work opportunities tax credit. It is the 
welfare-to-work tax credit.
  This is about working America. This is a tax bill about working 
America, about opportunity, about equity, about fairness, and about 
protecting our jobs. And, yes, it raises the minimum wage.
  I am proud to vote for it. I urge Members on both sides of the aisle 
to vote for it because this is good policy by a strong Congress, and we 
need to get through the Senate and to the President's desk.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  You can tell that if it is going to happen after midnight, that the 
majority just ain't up to something good because everything bad they 
do, they wait until late at night and then they come.
  So you take a look at this bill, and they call it the minimum wage 
bill. Well, that is good; so why would they wait until after midnight? 
Or you might take another look at the bill and you see that they are 
trying to help the poor miners. Well, that doesn't sound like 
Republicans to me. If they ever got enough religion to help poor 
miners, they would certainly want to do that in the sunlight. But, no, 
they wait until after midnight.
  Then, of course, there are the extenders that really help schools and 
research and development. It sounds pretty decent. It does not sound 
that Republican to me.
  There has to be a skunk at this picnic somewhere. And then you take a 
look and you find out that with all of the wonderful, spiritual good 
that they want to do for so many people, the working poor, we find out 
that there are 7,500 families in this great country that are worth 
billions of dollars, that they cannot leave this Congress without 
saying, ``We helped you. You are the people we really love.'' And if 
you take a look to see, have they sent us letters, these rich people, 
most of them, saying, ``Hey, try to cut back on the war, try to help us 
with some health and education project?'' They are not asking for this 
money. And yet over $800 billion, we are prepared to take away from the 
Treasury at a time that our country needs it the most but it just 
cannot stand on its own two feet. So, therefore, we have to find a 
sweetness for it, and we have enough nerve to believe that someone is 
going to believe that you have a concern for the minimum wage.

[[Page 16476]]

  After 9 or 10 years, you wake up at the end of the day, and you bring 
in the estate tax relief bill that is the real money, and because that 
sucker is so heavy it cannot get off the ground, you try to spray some 
perfume on this skunk, and you call it minimum wage, extenders, and 
help for the miners.
  If you had any compassion at all, don't these people deserve to be 
treated separately? Do they have to be with 7,500 people who are close 
friends of yours? Should not the working people have a bill of their 
own just to increase the minimum wage? Should not the miners, their 
pensions and their health benefits, should they not have a bill of 
their own during the daytime hours? And certainly the incentives are so 
popular, why do you have to hold them hostage for where your hearts 
really belong?
  So I knew that you were going to wait until midnight, but no one knew 
exactly what you were up to. But, hey, it is after midnight, you are on 
the floor, and you say if you want all of this good medicine, then 
swallow our pill with it, but if you say no, you say no to what is 
good. It does not make any sense. But I think the newspapers, 
television, everyone knows what is going on. You have gotten away with 
this for a long, long time. But there comes a time when people wake up 
to what is happening, and even though you have done it in the middle of 
the night, the sun will rise and people would understand.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  I keep telling my friend from New York that there is a really big 
country west of the Hudson. It is 9 p.m. in California. The sun is 
shining in the United States. I understand east of the Hudson, but 
there is a big country west of the Hudson.
  I told you this was going to be a strange debate.
  The gentleman from California is right. He counted backward: ten, 
nine, eight, seven, six. We have not increased the minimum wage. It is 
about time we increased the minimum wage.
  Are you offended that we finally got it? Is that what you are 
offended about? Or is it the fact that when you were the majority for 
40 years, Medicare never saw one preventative service, they never saw 
one wellness program, and there was no drug program? We became the 
majority and all of that occurred.
  I am now beginning to figure this out. These people are going to have 
to tear up these old, yellowed speeches they have been giving for 
decades because the Republicans get it.
  There is one other thing we get. It is a concept you are beginning to 
hear about. It is called ``multi-tasking.'' You do not really have to 
come with one subject. You can actually do several things at the same 
time. And there is a degree of synergy involved in those things. You 
heard the gentlewoman from Connecticut, that there are interactive 
aspects in this.
  So I am really somewhat confused. Is it that you want to keep on 
giving speeches that Republicans do not understand that we should raise 
the minimum wage, that you do not want to rewrite the speech? Or is it 
because on every one of those hackneyed, worn political positions, you 
do not have a position anymore?
  We are for raising the minimum wage. We agree with you. It is time to 
raise it. Your arguments are now: But it is not packaged correctly.
  It is after midnight. I would love to be doing this at 7 p.m. You 
know the difficulties in moving. We just passed a massive pension bill. 
We got it done. It is 9 o'clock. You are going to complain that you are 
going to vote against this because we are doing it after midnight? Is 
it so offensive to you that you have to stay up a couple of hours and 
have presented to you a package which is very difficult for you to get 
your hackneyed, yellowed political speeches around?
  Yes, we are Republicans. Are we for increasing the minimum wage? Yes. 
Do we want to get the extenders done before we go out because it is 7 
months too late? Yes. Do we want to help people who want to hang on to 
a little bit of what they have built over their lifetimes? Yes. And you 
are going to vote ``no'' because it is put together in a way that 
offends you?

                              {time}  0030

  I wonder what that person hoping for an increase in the minimum wage 
thinks when they are told, I wanted to help you, but I was offended in 
the way in which the opportunity to help you was presented to me.
  Who is kidding who?
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Maryland (Mr. Cardin), an outstanding member of the Ways and Means 
Committee.
  Mr. CARDIN. Mr. Speaker, let me thank my friend for yielding.
  Let me speak for an interest group that has not been heard tonight, 
and that is our children and grandchildren, because they are going to 
be asked to pick up the tab of this legislation.
  Yes, Mr. Speaker, I am for raising the minimum wage. It is a fair 
thing to do, and it is in the economic interests of this country. But 
the price to vote ``yes'' is just too high, $267 billion of additional 
debt on the estate tax changes.
  And where are we going to get the money to pay for that? I hear from 
my friends that we have to be fiscally conservative, and I agree with 
that on every dollar of new spending. But tonight it is okay for $267 
billion of additional debt. And where is that money going to come from? 
We borrow it. We borrow it from foreign governments that own banks. And 
it jeopardizes trade exchange with the United States. It costs us jobs.
  It is in our national interest to balance our budget, we all 
understand that; and tonight, by passing this bill, we are moving in 
the wrong direction.
  Mr. THOMAS. Mr. Speaker, I reserve my time.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from North 
Dakota (Mr. Pomeroy), an outstanding member of our committee.
  Mr. POMEROY. Mr. Speaker, we know what extortion is. You know those 
old movies? ``Give me all the money or the kid gets it.'' Well, this is 
legislative extortion. You want a minimum-wage increase? Give the 
multimillionaire families a tax break. No tax break for 
multimillionaires, no minimum-wage increase.
  So who gets this tax break? Well, as you can see, the bulk of it goes 
to estates worth more than $20 million. How much do these estates get? 
As you see, they get $5.8 million on average.
  So that is the deal they offer us: Oh, we will give you an increase 
in that $5.15 per hour minimum wage, just as long as you give $5.8 
million to those $20 million estates.
  What do they think, we are crazy? That is no deal. That is 
legislative extortion, and it needs to be rejected with a ``no'' vote 
tonight.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Arizona (Mr. Hayworth), a member of the Ways and Means 
Committee.
  Mr. HAYWORTH. Mr. Speaker, it is interesting to hear the level of 
Orwellian ``newspeak'' emanating from our friends on the left. We are 
now told that a reasonable, rational compromise that includes many 
commonsense ideas is somehow legislative extortion. We hear that a 
compromise that provides an increase in the minimum wage is paired with 
other policy initiatives that somehow make it a poison pill.
  Isn't it interesting the lexicon offered by the left? If it is a 
compromise forged by conservatives that somehow actually, ironically 
delivers on an issue for which my friends on the left believe they have 
ownership, why, that is a poison pill.
  Oh, and conveniently omitted when we hear the bold relief, including 
the impugning of our motives for moving forward on this, conveniently 
omitted, are the policy initiatives championed in bipartisan fashion: 
the work opportunity tax credit, the earned income tax credit, those 
extenders that are part of this that actually help those working to get 
ahead.

[[Page 16477]]

  It is a very interesting occurrence we see here tonight. ``Curiouser 
and curiouser,'' said Alice. It is not Wonderland, and this legislation 
may not be perfect, but it is not the glum, dour air of apocalyptic 
fate that the left would portray it as. It is a positive move, raising 
the minimum wage, extending tax relief, and revising tax policy.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Rhode Island (Mr. Langevin).
  Mr. LANGEVIN. Mr. Speaker, the American people deserve an up-or-down 
vote on the minimum wage and not have it tied to a poison pill that is 
designed to kill that increase. That is not what we are getting 
tonight.
  Mr. Speaker, I am outraged that men and women across this country go 
to work, working 40 hours a week, often more, and can't even make ends 
meet.
  The minimum wage hasn't been increased since 1997. Workers in Rhode 
Island, for example, have to earn approximately three times the minimum 
wage just to afford a basic two-bedroom apartment.
  A majority in this House supports an increase in the minimum wage, 
but the Republican leadership only wants to help a privileged few. To 
put this in perspective, thousands of families in Rhode Island and 
millions of families across America would benefit from a minimum wage 
increase, while the Republican tax plan would help a handful of the 
wealthiest. This costly political stunt will add billions of dollars 
per year to our national debt and demonstrates the Republicans' 
misguided priorities.
  It is time for a new direction. I urge my colleagues to join me in 
opposing this sham bill and supporting a stand-alone vote to increase 
the minimum wage to $7.25 an hour. It is the right thing to do for the 
American people.
  Mr. THOMAS. Mr. Speaker, I reserve my time.
  Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. I thank the ranking member very much.
  This is indeed a ploy of the highest nature. There is nobody in this 
House that is more concerned about raising the minimum wage than 
Democrats. Seven times we have tried to raise the minimum wage.
  If this is such an important effort to raise the minimum wage, we 
ought to ask the question, why is every group that represents working 
people calling and asking to vote down this sham?
  You know, Mr. Speaker, William Shakespeare wrote an excellent play. 
He called it ``Julius Caesar.'' In that play, just when Brutus and 
Cassius and all were digging in the swords, Julius Caesar grabbed 
Brutus and said, ``Et tu, Brutus. Yours is the meanest cut of all.''
  Mr. Speaker, I am telling you what the meanest cut of all in this 
bill is. They say we don't read the bills. But the American people need 
to know what this bill says. It says the Tax Relief Act of 2006 
excludes all of the tipped employees' tips from being considered as 
wages in determining if such tipped employees have been paid the 
applicable minimum wage rate.
  This is the meanest cut of all in this bill. If it is right to give 
the minimum wage for one person, isn't it right to give it for 
everybody? There is nobody that deserves the minimum wage more than 
those people who are at the bottom of the ladder; and none are at the 
bottom of the ladder more than those people who have to make it on 
tips. This bill will not only not raise the minimum wage of those who 
make it on tips, 2.5 million Americans, their minimum wage will go down 
under this bill. Indeed, the meanest cut of all.
  We must vote down this bill and put forward a genuine bill that will 
truly raise the minimum wage for everybody.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Louisiana (Mr. McCrery), the chairman of the Social 
Security Subcommittee.
  Mr. McCRERY. Mr. Speaker, I thank the chairman of the Ways and Means 
Committee for yielding.
  I just want to say to the point that some are making about States 
that have no tip credit law and have a higher minimum wage, if in fact 
a State wishes to continue to have a higher minimum wage, all they have 
to do in response to passage of this bill is to pass any kind of tip 
credit. It can be a minimal tip credit, and then they can fully restore 
the minimum wage that that State wishes its employees to have. So it is 
not that complicated. It is not that difficult as some Members have 
suggested.
  Mr. INSLEE. Mr. Speaker, will the gentleman yield?
  Mr. McCRERY. I yield to the gentleman from Washington.
  Mr. INSLEE. Mr. Speaker, what we want to point out and we want to 
make sure, because I think I have confirmed this with the Republican 
staff, the way this works, if this bill passes, in the State of 
Washington the minimum wage goes down the next day $1.78 an hour.
  The gentleman is correct. If the State legislature got together and 
essentially overrode the Republicans in Congress, they might be able to 
get it back up where it was. But you know what? You Republicans in the 
State legislature, I say ``you,'' Republican-controlled legislators, I 
will give you a clue: it is not going to happen. That is why we object 
to cutting the minimum wage in any State by any Congress of any party.
  Unfortunately, that is what you are doing. You can confirm it with 
counsel. That is why we think it is an abomination.
  Mr. McCRERY. Mr. Speaker, reclaiming my time, it is a legitimate 
issue the gentleman brought up, but I would hope he would agree that 
freely elected representatives in his State, or any other State, 
whether Republican or Democrat, should in fact be able to express the 
will of the people who elect them, whether they are Republicans or 
Democrats; and if in his State they want to, whoever they are, 
Republicans or Democrats, want to go back to the minimum wage they had 
prior to the passage of this bill, they may. This bill in no way 
prohibits that.
  So the gentleman's complaint about this bill could easily be taken 
care of, the same way his State originally enhanced the minimum wage in 
Washington. That is the only point I wanted to make.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
Michigan (Mr. Levin), an outstanding member of the Ways and Means 
Committee.
  Mr. LEVIN. Mr. Speaker, I spoke earlier and I wasn't going to speak 
again so others could, but listening to the Republicans here, I felt 
compelled to come over.
  In all my years here, this is the height of hypocrisy. You have sat 
here year after year failing to raise the minimum wage, refusing to 
come here and sign a discharge petition, doing nothing. And now, 
because you are worried you are going to lose an election, you are 
here. And you tie it to a proposal that will give the very, very 
wealthy many more times than would be benefiting the workers with a 
rise in the minimum wage.
  If you really cared, you would have acted long ago. This isn't on 
your part even an election-year conversion. It is an election-year 
trick. It won't work.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it sounds to me like somebody is saying on this issue, I 
have a hostage, and if you try to force me to vote for minimum wage, I 
am going to kill the hostage.
  There is a minimum-wage increase in this legislation. The argument 
that somehow, and I will say it again, somehow the fact that we didn't 
act earlier is a sufficient rationale for you to not vote for it now, 
to say that we have other items in this bill and we are hiding the 
minimum wage with other attractive packages to Republicans, I will 
repeat to you, is a way we might actually be able to get it through the 
other body, since the other body would not allow a clean minimum wage 
to pass through it. And they have exhibited that a number of times.
  I know it is difficult for you, and I know it is going to take a 
period of time in terms of understanding that when we say this is a 
bill that contains extenders, that this is a bill that contains a 
reasonable and appropriate adjustment on estate taxes. The reason I

[[Page 16478]]

say that is this is almost identical to the bill that got 43 Democrat 
votes just a few weeks ago.
  And when I say there is an increase in the minimum wage in this bill, 
I have heard all kinds of tortured arguments about package and process, 
but I can't understand for the life of me, if we are such hypocrites, 
and this is a sham, why you don't take us up on it and show how wrong 
we are by voting for a minimum-wage provision and then see what we do 
with it.

                              {time}  0045

  What we are going to do with this is try to make law. This will pass 
this House. Join me. Let's go over to the Senate and do everything we 
can together to get the Senate to pass it.
  Or is it that if it actually happened and the President signed it, 
and we had an increase in the minimum wage, you would have to draw one 
more line through those easy arguments that are now outdated about the 
difference between Republicans and Democrats, because it is hard enough 
to believe that Democrats no longer have a monopoly on improving 
Medicare with quality measures and putting prescription drugs in.
  But don't Republicans have any shame? Coming to the floor trying to 
raise the minimum wage, what are we going to do? Well, the first thing 
you have to say is, okay, guys, we can't vote ``yes''. Why? Test us. 
Let's make law. It has been 10 years. Let's raise the minimum wage. I 
understand that we are also going to save the extenders.
  I understand we are going to put in a reasonable estate tax change. 
But what I am asking you to do, rather than to wring your hands and 
figure out how you are going to explain you didn't want to vote for the 
increase in the minimum wage because of the way it was packaged is to 
test us. I want a test. Let's pass this. Let's go over to the Senate. 
Let's try to make law.
  Mr. KENNEDY of Rhode Island. Mr. Speaker, will the gentleman yield?
  Mr. THOMAS. I yield to the gentleman from Rhode Island.
  Mr. KENNEDY of Rhode Island. Mr. Speaker, the gentleman has mentioned 
prescription drugs a number of times. I think it is analogous to this 
debate, because that was a debate that took place late at night, and 
you used the elderly and their need of prescription drugs to pass a 
trillion-dollar bill that benefited the pharmaceutical companies and 
the insurance companies in this country.
  The people of the United States know that, and they are going to see 
it again tonight. You are using people in order to pass your agenda for 
the very wealthy in this country and it is wrong.
  Mr. THOMAS. Mr. Speaker, reclaiming my time, millions of Americans 
are thankful they now have prescription drugs at significant savings. I 
know it is difficult because another line went through one of your 
typical political arguments. Test us. See if we are just kidding. See 
if this is a sham.
  What I am inviting you to do is make law. I know it is a brave new 
world. But let's try it. Let's see if we can make law together. Your 
arguments have been so turned that you are explaining you are against 
raising the minimum wage because of the way it is being presented to 
you. It deserves to be clean. Okay. It's not.
  I am offended that I would have to vote this way. By the way, you are 
still at $5.15. Test us. Let's make law.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am glad that the chairman has taken his mask off and 
brought his sense of honesty to this debate. Yes. Test you. What you 
are basically saying is that if you want to give some help to these 
people that have such low wages, we then have to buy, in the same bill, 
the $800 billion relief that you are giving to 7,500 people. I 
understand what you are doing.
  Why don't you call it the Estate Tax Relief Bill, which is sweetening 
up, you know, by just giving some of them minimum wage. And you say, if 
you don't like the rich people, if you don't want to get close to $1 
trillion away, then of course vote against the minimum wage.
  It is so unfair to call this a package. It is a package for the rich, 
that just as an afterthought, you throw in minimum wage. But, 
fortunately, the chairman has said what he is doing. Either you buy it 
as I put it or forget about it. I think that is so unfair to the 
working poor people in this country.
  Mr. Chairman, I yield 1 minute to the gentleman from New Jersey (Mr. 
Rothman).
  Mr. ROTHMAN. Mr. Speaker, tomorrow's headlines are going to read 
``hostage taken''. And you know what they are going to mean? The 
increase in the minimum wage was taken hostage by the Republican 
majority. They have taken the increase in the minimum wage hostage 
unless we give the super-rich $100 billion.
  To give the working poor a $2.10 increase an hour, they have held us 
hostage unless we give them $800 billion. Now, they have had 9 years in 
the majority in the House to have a clean increase in the minimum wage. 
They never did it. They would not let us do it, because they were in 
the majority.
  They still will not do it. Only if we give the super-rich $800 
billion. And American people are not stupid. They do not want a bad 
deal. They do not want a bad law. They do not want to give into hostage 
demands. They do not want to give in to extortion. They want an 
increase in the minimum wage, not another $800 billion gift to the 
super-rich because the Republican majority does not want to give it in 
any other way.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I really would like to travel with some of you folks to 
restaurants and hotels and watch you go back and find someone who is 
getting the minimum wage and make that pitch to them. Because what they 
are going to say is, gee, you are right, I am glad you voted against 
increasing the minimum wage so I could get a few more bucks.
  I understand doing it here on the floor. I understand doing it in 
those expensive fund-raisers that you hold. I have a really difficult 
time seeing someone who says, would you just give me an increase in the 
minimum wage buying that argument.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield 15 seconds to the gentleman from New 
Jersey (Mr. Rothman) to respond to the distinguished gentleman.
  Mr. ROTHMAN. Mr. Speaker, the distinguished chairman dares me to go 
back and tell my people. I am going to say, the Republicans will not 
give you the minimum wage increase unless we give $800 billion to the 
super-rich.
  They will say, don't do it, Steve. We will throw the Republicans out 
in November and get an increase in the minimum wage without them.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I would love to make law with 
the distinguished chairman, Mr. Rangel, but it sure is tough. We have 
been 50 years in the desert, 50 years on an increase relevant to 
minimum wage. It is the lowest in 50 years.
  Rather than take the 250 Members of this body who are willing to have 
an up and down vote, and my good friend who is the chairman, and I do 
believe he is a good friend, knows that the Senate is not, the other 
body is not going to take this bill the way it is. This is a joke.
  Ten million people are going to be denied the minimum wage with this 
bill. This is a joke. No one is going to take this on the other side. 
So we do this in the midnight hour. We have a headline. We go home to 
campaign. You will. We will go home and tell the truth.
  Give us an up and down vote on a $7.25 minimum wage up or down vote. 
The joke is on you. This is an untruth and it makes no sense to put 
people who have been in the desert without getting any money for this 
joke, because you know your Senate Republicans are not taking this 
joke.
  Mr. Speaker, it is time to vote up or down. Give us the 250 Members 
who will vote on a minimum wage. Vote for

[[Page 16479]]

it now and throw this bill out the window.
  Mr. Speaker, I rise in opposition to H.R. 5970, the Permanent Estate 
Tax, Minimum Wage, and Extenders Bill. But I would be remiss if I did 
not point out that it is clear that Republicans are playing politics 
with a pay raise for millions of American workers. We have had enough 
politics. It is time for a new direction.
   Mr. Speaker, the Republican leadership is ignoring the American 
people, holding a pay raise for American workers hostage for partisan 
purposes. H.R. 5970 contains ``poison pills'' that will prevent the 
minimum wage increase from becoming law, most importantly a costly tax 
cut for multi-millionaires.
   Mr. Speaker, H.R. 5970 is just a cynical, political ploy to defeat a 
minimum wage increase. It is a cruel hoax on the 6.6 million people who 
would get a raise with a minimum wage increase and would give a huge 
tax break to only 7,500 of the richest households in America.
  The cynicism behind this ridiculous bill is as obvious as the 
Republicans devotion to giving away tax breaks to the wealthy and a 
hard time to the middle and working class. The aim of the H.R. 5970 is 
to make it look like Republicans support a minimum wage increase, while 
ensuring its demise in the Senate by attaching ``poison pills.''
  Republicans' poison pill will cost nearly $753 billion when fully in 
effect, and impact less than 1 percent of all Americans, and 
Republicans are using that to derail an increase in the minimum wage 
for 6.6 million Americans.
   Mr. Speaker, the only way to ensure that a minimum wage increase 
becomes law is to allow a straight up-or-down vote on H.R. 2429, the 
Fair Minimum Wage Act, which provides an increase to $7.25 an hour.
   Mr. Speaker, Democrats have a New Direction for America, which 
raises the minimum wage and brings economic opportunity and security to 
all Americans, not just the privileged few.


                        oppose estate tax repeal

   Mr. Speaker, I have voted for estate tax relief before but I oppose 
this bill because it is irresponsible to cut taxes for the wealthy when 
the Nation is at war and the national debt is over $8 trillion. Indeed, 
Mr. Speaker, I think it is unconscionable to be considering voting 
another tax cut to the wealthiest 0.3 percent of Americans.
  The Joint Committee on Taxation estimates that this estate tax 
proposal will cost the Federal Government $602 billion, plus an extra 
$160 billion when interest is accounted for. Only 0.5 percent of the 
richest families in America currently pay estate taxes. Moreover, under 
current law in 2009, only 3 out of every 1,000 estates will pay a penny 
in estate taxes--all couples with estates up to $7 million--99.7 
percent--will pass on their entire estates tax-free. Any compromise 
proposal which deviates from 2009 current law--such as the bill before 
us--is therefore crafted entirely to benefit this tiny sliver of the 
richest estates. Particularly since I have voted for a fair estate tax 
initiative but this bill is not it.
  According to recent polling data, nearly 60 percent of voters hold 
the initial, unaided view that estate tax should be left as is or 
reformed, and only 23 percent support repeal. When asked about the 
estate tax in the context of other budget priorities, voters rank 
repealing the estate tax as the last priority, and 55 percent of voters 
oppose repeal.
  This so-called compromise, nearly as regressive and costly as a full 
repeal, is no compromise at all. Passing even this compromise 
legislation would constitute one of the most regressive tax cuts in the 
history of the United States. Middle- and lower-class Americans will be 
forced to shoulder the burden of radically decreasing the estate tax--
both monetarily and through decreased public programs. In order to 
cover the monetary gap, the government will plunge further into debt, 
which will limit its ability to address the Social Security solvency 
gap and reduce the money available for public programs. It will also 
have to tap other tax sources, like payroll taxes, which will 
overwhelmingly hinder lower-income families.
  I urge my colleagues to uphold the core American values of fairness 
and belief in meritocracy by rejecting this tax cut.


                         increase minimum wage

  If we really wish to help the most deserving American families, we 
should raise the minimum wage from $5.15 to $7.25 over 3 years. Mr. 
Speaker, did you know that today's minimum wage of $5.15 today is the 
equivalent of only $4.23 in 1995, which is even lower than the $4.25 
minimum wage level before the 1996-97 increase? It is scandalous, Mr. 
Speaker, that a person can work full-time, 40 hours per week, for 52 
weeks, earning the minimum wage would gross just $10,700, which is well 
below the poverty line.
  A minimum wage increase would raise the wages of millions of workers. 
An estimated 7.3 million workers--5.8 percent of the workforce--would 
receive an increase in their hourly wage rate if the minimum wage were 
raised from $5.15 to $7.25 by June 2007. Due to ``spillover effects,'' 
the 8.2 million workers--6.5 percent of the workforce--earning up to a 
dollar above the minimum would also be likely to benefit from an 
increase.
  Raising the minimum wage will benefit working families. The earnings 
of minimum wage workers are crucial to their families' well-being. 
Evidence from the 1996-97 minimum wage increase shows that the average 
minimum wage worker brings home more than half--54 percent--of his or 
her family's weekly earnings. An estimated 760,000 single mothers with 
children under 18 would benefit from a minimum wage increase to $7.25 
by June 2007. Single mothers would benefit disproportionately from an 
increase--single mothers are 10.4 percent of workers affected by an 
increase, but they make up only 5.3 percent of the overall workforce. 
Approximately 1.8 million parents with children under 18 would benefit.
  Contrary to popular myths and urban legends, adults make up the 
largest share of workers who would benefit from a minimum wage 
increase. Seventy-two percent of workers whose wages would be raised by 
a minimum wage increase to $7.25 by June 2007 are adults--age 20 or 
older. Close to half--43.9 percent--of workers who would benefit from a 
minimum wage increase work full time and another third--34.5 percent--
work between 20 and 34 hours per week.
  Minimum wage increases benefit disadvantaged workers, and women are 
the largest group of beneficiaries from a minimum wage increase. 60.6 
percent of workers who would benefit from an increase to $7.25 by 2007 
are women. An estimated 7.3 percent of working women would benefit 
directly from that increase in the minimum wage.
  A disproportionate share of minorities would benefit from a minimum 
wage increase. African-Americans represent 11.1 percent of the total 
workforce, but are 15.3 percent of workers affected by an increase. 
Similarly, 13.4 percent of the total workforce is Hispanic, but 
Hispanics are 19.7 percent of workers affected by an increase.
  The benefits of the increase disproportionately help those working 
households at the bottom of the income scale. Although households in 
the bottom 20 percent received only 5.1 percent of national income, 
38.1 percent of the benefits of a minimum wage increase to $7.25 would 
go to these workers. The majority of the benefits--58.5 percent--of an 
increase would go to families with working, prime-aged adults in the 
bottom 40 percent of the income distribution.
  Among families with children and a low-wage worker affected by a 
minimum wage increase to $7.25, the affected worker contributes, on 
average, half of the family's earnings. Thirty-six percent of such 
workers actually contribute 100 percent of their family's earnings.
  A minimum wage increase would help reverse the trend of declining 
real wages for low-wage workers. Between 1979 and 1989, the minimum 
wage lost 31 percent of its real value. By contrast, between 1989 and 
1997--the year of the most recent increase--the minimum wage was raised 
four times and recovered about one-third of the value it lost in the 
1980s.
  Income inequality has been increasing, in part, because of the 
declining real value of the minimum wage. Today, the minimum wage is 33 
percent of the average hourly wage of American workers, the lowest 
level since 1949. A minimum wage increase is part of a broad strategy 
to end poverty. As welfare reform forces more poor families to rely on 
their earnings from low-paying jobs, a minimum wage increase is likely 
to have a greater impact on reducing poverty.
   Mr. Speaker, the opponents of the minimum wage often claim that 
increasing the wage will cost jobs and harm the economy. Of course, Mr. 
Speaker, there is no credible evidence to support such claims. In fact, 
a 1998 EPI study failed to find any systematic, significant job loss 
associated with the 1996-97 minimum wage increase. The truth is that 
following the most recent increase in the minimum wage in 1996-97, the 
low-wage labor market performed better than it had in decades. And 
after the minimum wage was increased, the country went on to enjoy the 
most sustained period of economic prosperity in history. We had 
historic low levels of unemployment rates, increased average hourly 
wages, increased family income, and decreased poverty rates. Studies 
have shown that the best performing small businesses are located in 
States with the highest minimum wages. Between 1998 and 2004, the job 
growth for small businesses

[[Page 16480]]

 in States with a minimum wage higher than the Federal level was 6.2 
percent compared to a 4.1 percent growth in States where the Federal 
level prevailed.
  So much for the discredited notion that raising the minimum wage 
harms the economy. It does not. But it increases the purchasing power 
of those who most need the money, which is far more than can be said of 
the Republicans' devotion to cutting taxes for multimillionaires.


                               conclusion

   Mr. Speaker, Americans overwhelmingly side with progressive 
principles of rewarding hard work with a liveable wage. In a recent 
poll conducted by the Pew Research Center, 86 percent of Americans 
favored raising the minimum wage. In the 2004 election, voters in 
Florida and Nevada, two States won by President Bush, overwhelmingly 
approved ballot measures to raise the minimum wage. Even in Nevada's 
richest county, Douglas, where Bush received 63.5 percent of the vote, 
61.5 percent of voters supported raising the minimum wage.
  Forty-three percent of Americans consider raising the minimum wage to 
be a top priority. In contrast, only 34 percent considered making the 
recent Federal income tax cuts permanent and only 27 percent consider 
the passage of a constitutional amendment to ban same-sex marriage as 
top priorities.
  Members of Congress have legislated a minimum salary for themselves 
and have seen fit to raise it eight times since they last raised the 
minimum wage. It is time we gave the Americans we represent a long 
overdue pay raise by increasing the minimum wage to $7.25 over 3 years. 
Even this amount does not keep pace with the cost of living. The 
minimum wage would have to be increased to $9.05 to equal the 
purchasing power it had in 1968. And if the minimum wage had increased 
at the same rate as the salary increase corporate CEOs have received, 
it would now be $23.03/hour.
  Thank you, Mr. Speaker. It is time for a new direction. I urge my 
colleagues to reject H.R. 5970.
  Finally, I have supported and do support the sales tax relief for 
Texas; however, the Republican majority knows that their bill is going 
nowhere and will not be heard by the Senate. We need an up or down vote 
on the minimum wage and an independent vote on sales tax relief on 
Federal income taxes for Texas--I would vote ``yea'' on both those two 
bills--which would not be a budget buster and deficit builder. The 
Republicans are simply playing games.
  Mr. RANGEL. Mr. Speaker, I yield myself the balance of our time.
  Mr. Speaker, I want to thank the Republicans for their honesty in 
expressing their concern at this late hour for the minimum wage bill. 
At least we know on the record, they know what the situation is, they 
know how long it has been since these people have not been able to 
increase the minimum wage.
  It would just seem to me, though, that honesty would dictate that 
this subject alone, the millions of people that are affected, would 
warrant that we not put it in any other kind of package, but we deal 
with it by itself because it deserves to be dealt with by itself.
  Mr. Speaker, I do not think that you have to really be a politician 
to understand that when any bill is going to cost $800 billion, and it 
only has 7,500 people as a beneficiary, I think you can call that 
controversial. I think you can say that all of the editorials believe 
it is unfair. People are talking about a Nation at war, a Nation that 
has a deficit, a Nation that has Katrina, a Nation that does not fund 
its health system.
  They are concerned about the deficit, they are concerned about the 
war, and they should be concerned about close to a trillion dollars 
loss in revenue for people that have these large estates.
  Now, for those who believe that they should get relief. Good. But why 
mix the two? Why take the poor folks and hold them hostage because you 
cannot get enough political support to get what you really want out of 
this, not help, I mean you are just not known to be concerned about 
coal miners. It is not my fault.
  You are not known to have compassion about working people. It is not 
my fault. You are known to be concerned about the wealthiest people in 
our Nation. That is not your fault, you just cannot help yourself.
  But why would you bring these things together and just give us one 
vote? Why do you not give America an opportunity to determine which 
side you are on? Are you with the minimum wage enough so that you give 
them a vote to say this is what you believe in, or are you so scared to 
death politically that you cannot get this 800-trillion-dollar gorilla 
off the ground that you have to throw in something that sounds 
compassionate?
  I do not know, but I know one thing, it all does not come out of the 
same committee. So you are not only mixing ideas in terms of tax 
incentives and giving away money, but what you are doing is taking 
committees with different jurisdictions, and bringing it together in 
the middle of the night, and asking people to vote on these things.
  Mr. Speaker, I do not think it is fair. But I do believe that the 
American people will be able to determine the difference between our 
parties. That is what makes our country great. I want to thank you for 
being able to admit that you just cannot get your package off the 
ground unless you throw in poor folks' help with it.
  Mr. THOMAS. Mr. Speaker, I yield myself the balance of the time.
  Mr. Speaker, perhaps you did not hear the gentleman from New York's 
closing statement, that we are just going to have to throw the poor 
folks out with it. Let me get this straight. We want to vote ``aye''. 
That would produce a higher minimum wage. We want to vote ``aye''. That 
will provide those low-income people, especially in States like Texas, 
with a State and local sales tax deduction.
  We want to vote ``aye'', so the work opportunity tax credit can 
continue. We want to vote ``aye'' so the welfare-to-work program will 
continue. But you are for those low-income folk. So you want to vote 
``no'', which would deny the minimum wage, which would deny the State 
and local sales tax, which would deny the work opportunity tax credit, 
which would deny the welfare-to-work, and you are going to convince 
these folk that what you are doing is protecting them.
  Well, let me tell you, if I had a gerrymandered district like some of 
you folks do, I guess I could get away with it. I do not. When you look 
at this vote tonight, no matter how much you squirm, no matter how much 
you squeal, no matter how much you protest, it is very simple.
  An ``aye'' vote increases the minimum wage. An ``aye'' vote allows 
State and local sales tax to be deducted. An ``aye'' vote allows the 
work opportunity tax credit to continue. An ``aye'' vote allows the 
welfare-to-work program to continue.
  No matter how much you are offended, if you vote ``no'', none of 
those will happen. Mr. Speaker, I have said it already, I will say it 
again to The gentleman from New York, this is an opportunity. This is a 
positive gesture on my part. Join me in making sure that those low-
income people you are so compassionate about but cannot support will 
come with me and I will support them so that your compassion and my 
support, in terms of a ``yes'' vote, will actually deliver them 
something other than rhetoric.

                              {time}  0100

  So I would love to have you vote ``yes'' so we are both supporting 
them. But you go ahead, bring your compassion, I will bring the ``yes'' 
vote along with the majority of people here bringing a ``yes'' vote, 
and we will pass it.
  Mr. PENCE. Mr. Speaker, I come to this floor wishing for a different 
choice than the one before me. The bill under debate provides permanent 
estate and gift tax relief--something I have long supported. That is 
why the choice before us tonight is so difficult. While this bill will 
provide relief to American farmers and small business owners, it also 
will do much harm to those very same people and the people they employ 
because of the irresponsible 41% increase in the minimum wage that it 
also contains. This increase in the minimum wage is excessive and will 
hurt the poor and those entering the workforce by reducing the number 
of entry level positions in our economy.
  Minimum wage increases raise unemployment among teenagers, minorities 
and part-time workers. The minimum wage violates fundamental free 
market economics. It costs jobs, and I cannot support policies that 
will take

[[Page 16481]]

jobs from those who need a paycheck the most.
  Any proposal containing a minimum wage increase should be jobs-
neutral. If the federal government increases costs for businesses with 
one hand, it is only right that it reduce costs for businesses with the 
other. And while this legislation does contain good tax extensions, in 
totality, it is not jobs-neutral. This increase in the minimum wage 
will cost American jobs, and I cannot support it.
  Additionally, this bill contains unrelated elements added during the 
eleventh hour. A budget-busting provision is included that converts the 
Abandoned Mine Land program from discretionary to mandatory spending. 
The result is an increase in the deficit of $3.9 billion over the next 
10 years.
  Mr. Speaker, I would like to stand before you tonight and say that I 
could support this bill because more than anyone, I want permanent 
death tax relief. But, I cannot in good conscience vote for a bill that 
also contains an excessive minimum wage increase that will hurt small 
businesses and cost American jobs. And, I cannot vote for a bill that 
busts the budget by nearly $4 billion over 10 years. Regretfully, Mr. 
Speaker, for those reasons I stand tonight in opposition to this bill.
  Mr. BLUMENAUER. Mr. Speaker, after having their wages frozen since 
1997, it is time to give a long overdue raise to millions of Americans 
who work hard but are paid only $5.15 per hour.
  The Federal minimum wage is the lowest it has been, adjusted for 
inflation, in more than 50 years. Nine years have passed since the last 
increase and yet education, energy and healthcare costs have 
skyrocketed. No one can house, feed, and educate a household by earning 
the current Federal minimum wage.
  Luckily in Oregon, voters passed a statewide initiative in 2002 which 
raises our own minimum wage that provides an automatic inflation 
adjustment. With the increase, we have seen significant benefits for 
our workforce without any ill effects for our economy. Instead of 
doomsayer predictions of job losses, Oregon has experienced the 8th 
fastest job growth amongst states since the legislation was enacted.
  After months of stalling, the Republican leadership was finally 
forced to allow a vote. Unfortunately it was not a simple vote on 
minimum wage, but a loaded bill with costly and unnecessary provisions. 
This bill provides permanent estate tax relief for the wealthy by 
increasing estate and gift tax exemptions and lowering tax rates.
  Even worse, the intent to raise the existing minimum wage is actually 
decreasing the wages of some workers due to the tip credit provision. 
This provision provides that tips must be counted towards the minimum 
wage. In Oregon restaurant workers are paid $7.50 per hour and yet this 
legislation would reduce their wage to only $5.15 per hour.
  The bill is so poorly drafted that one interpretation would 
potentially double the minimum wage for select workers, while the other 
would show a decrease in the same jobs.
  This bill should be firmly rejected. The minimum wage needs to be 
increased by crafting a simple and clear solution that protects states 
with existing legislation. Under no circumstance should the Federal 
government undercut what Oregon voters have already established.
  Mr. SHAYS. Mr. Speaker, the time is past due for a raise in the 
Federal minimum wage, which as last increased 10 years ago. Today, 
workers making the least should be heartened that this legislation will 
raise their wages 41 percent to $7.25 per hour over the next 3 years.
  Some argue that raising the minimum wage increases unemployment and 
prices. This is true only if the minimum wage is set too high or phased 
in too quickly. If done properly, there should be little to no impact 
on employment or prices.
  I am also pleased we are lowering the estate tax, but adopting a far 
more rational approach than full repeal.
  Under this legislation, small business owners will be able to know 
their businesses can be left with their families when they pass on 
because of a significantly reduced tax rate. Wealthy individuals would 
still pay something, between 15 and 30 percent on their estates, but 
not the 46 percent in existing law.
  Because estate and gift taxes has a harmful impact on small 
businesses--many of which are forced to liquidate assets simply to pay 
estate taxes which fluctuates in crazy fashion, from 46 percent this 
year, to 0 percent in 2010 and way back up to 55 percent 2011--we must 
intervene and provide relief. This bill will protect families and 
business while still making sure the very wealthy are paying back 
something to society.
  Mr. PAUL. Mr. Speaker, I appreciate the opportunity to address my 
concerns with H.R. 5970, a bill to raise the federally mandated minimum 
wage. Before addressing the substance of this bill, I must address the 
flaws in the process under which this bill is brought before us. 
Neither I nor my staff had received any indication the bill before us 
tonight would be considered by the House until late this afternoon, and 
the only way a member of the general public could learn about this bill 
is to look on the Rules Committee website. Therefore, Members of 
Congress are being asked to vote for a major piece of legislation that 
was introduced just hours before being voted on the Friday night before 
Congress adjourns for the month of August.
  The practice of rushing bills to the floor before individual Members 
have had a chance to study the bills is one of the major factors 
contributing to public distrust of Congress. Mr. Speaker, I have 
introduced legislation, the Sunlight Rule (H. Res. 709), to prevent 
situations like the one currently confronting Members. The Sunlight 
Rule prohibits any piece of legislation, including conference reports, 
from being brought before the House of Representatives unless it has 
been available to Members and staff in both print and electronic 
versions for at least 10 days. H. Res. 709 also requires that 
conference reports and manager's amendments that make substantive 
changes to a bill must be available in both printed and electronic 
forms at least 72 hours before a vote.
  The announced purpose of this bill is to raise living standards for 
all Americans. This is certainly an admirable goal, however, to believe 
that Congress can raise the standard of living for working Americans by 
simply forcing employers to pay their employees a higher wage is 
equivalent to claiming that Congress can repeal gravity by passing a 
law saying humans shall have the ability to fly.
  Economic principles dictate that when government imposes a minimum 
wage rate above the market wage rate, it creates a surplus ``wedge'' 
between the supply of labor and the demand for labor, leading to an 
increase in unemployment. Employers cannot simply begin paying more to 
workers whose marginal productivity does not meet or exceed the law-
imposed wage. The only course of action available to the employer is to 
mechanize operations or employ a higher-skilled worker whose output 
meets or exceeds the ``minimum wage.'' This, of course, has the 
advantage of giving the skilled worker an additional (and government-
enforced) advantage over the unskilled worker. For example, where 
formerly an employer had the option of hiring three unskilled workers 
at $5 per hour or one skilled worker at $16 per hour, a minimum wage of 
$6 suddenly leaves the employer only the choice of the skilled worker 
at an additional cost of $1 per hour. I would ask my colleagues, if the 
minimum wage is the means to prosperity, why stop at $6.65--why not 
$50, $75, or $100 per hour?
  Those who are denied employment opportunities as a result of the 
minimum wage are often young people at the lower end of the income 
scale who are seeking entry-level employment. Their inability to find 
an entry-level job will limit their employment prospects for years to 
come. Thus, raising the minimum wage actually lowers the employment 
opportunities and standard of living of the very people proponents of 
the minimum wage claim will benefit from government intervention in the 
economy!
  Furthermore, interfering in the voluntary transactions of employers 
and employees in the name of making things better for low wage earners 
violates citizens' rights of association and freedom of contract as if 
to say to citizens ``you are incapable of making employment decisions 
for yourself in the marketplace.''
  Mr. Speaker, I do not wish my opposition to this bill to be 
misconstrued as counseling inaction. Quite the contrary, Congress must 
enact ambitious program of tax cuts and regulatory reform to remove 
government-created obstacles to job growth. However, Mr. Speaker, 
Congress should not fool itself into believing that the package of tax 
cuts included in this bill will compensate for the damage inflicted on 
small businesses and their employees by the minimum wage increase. This 
assumes that Congress is omnipotent and thus can strike a perfect 
balance between tax cuts and regulations so that no firm, or worker, in 
the country is adversely affected by Federal policies. If the 20th 
Century taught us anything it was that any and all attempts to 
centrally plan an economy, especially one as large and diverse as 
America's, are doomed to fail.
  In conclusion, I would remind my colleagues that while it may make 
them feel good to raise the Federal minimum wage, the real life 
consequences of this bill will be vested upon those who can least 
afford to be deprived of work opportunities. Therefore, rather than 
pretend that Congress can repeal the economic

[[Page 16482]]

principles, I urge my colleagues to reject this legislation and instead 
embrace a program of tax cuts and regulatory reform to strengthen the 
greatest producer of jobs and prosperity in human history: the free 
market.
  Mr. UDALL of Colorado. Mr. Speaker, this bill is an example of the 
worst kind of political game playing.
  After months and months of short workweeks and long breaks, now the 
Republican leadership has brought the House into session late today--
and for what?
  Certainly not for a simple vote on raising the minimum wage--even 
though that's long overdue.
  No, instead the purpose of this grab-bag of a bill is to provide 
political cover for people who want to say they voted to raise the 
minimum wage but don't want their votes to actually produce that 
result.
  That's why the Republican leaders have chained onto the minimum-wage 
increase the deadweight of an estate-tax revision bill like the one the 
House passed last month--a bill so badly flawed that it has already 
reached dead end in the other body. They know that the added weight 
will mean that even if this bill is launched from the House it will not 
fly, and will never reach the President's desk.
  It's a cynical move. And it's a lost opportunity--because if the 
estate-tax part of this bill were good enough to give the package a 
long-shot chance of enactment, the bill would merit support.
  But, like the version we passed last month, the estate-tax part of 
this bill does not have that chance, because it does not represent a 
true compromise. While benefiting only a very few--the very largest 
estates--it would irresponsibly reduce federal revenue at a time when 
the country is at war and the budget is already deeply in deficit. And 
to make matters worse, it includes unrelated provisions that are even 
less fiscally responsible, such as a special tax break for timber 
companies that would reopen a loophole that was closed when President 
Reagan signed the landmark Tax Reform Act of 1986.
  My opposition to this bill does not mean I am opposed to reducing 
estate taxes. When the House considered the estate-tax bill last month, 
I supported an alternative that would have raised the amount of an 
estate excluded from taxes to $6 million per couple and increased this 
to $7 million by 2009. This not only would have provided relief for 
small businesses and family farmers, but it would have done so in a 
much more fiscally responsible way, because it would have reduced 
revenues by much less than this bill. It also would have simplified 
estate-tax planning for married couples, who could carry over any 
unused exemption to the surviving spouse and so assured that the full 
$7 million would be available.
  Furthermore, that alternative would have transferred the revenue from 
the estate tax to strengthen the Social Security trust fund, a change 
that, according to the Social Security Actuary, would solve one quarter 
of the trust fund's shortfall.
  If the Republican leadership allowed us to vote on that--even as an 
added burden on a bill to raise the minimum wage--I would vote for it. 
But they could not do that, because that kind of true compromise--a 
reasonable and responsible compromise that would have a good chance of 
approval in the Senate--would not fit their plan to use the estate tax 
as a weight to sink the minimum wage increase.
  So, once again, I have no responsible choice but to oppose what the 
Republican leadership has put before us and to vote against this 
cynical maneuver disguised as a serious legislative proposal.
  Mr. KING of Iowa. Mr. Speaker, there is no doubt that most of the 
provisions contained in H.R. 5970 are good for America. I am in 
complete agreement with those who argue that no American family should 
be forced to sell off their loved one's life work in order to pay the 
federal inheritance tax bill. I have always considered the Death Tax to 
be a scourge on America, and I will continue working to bring about the 
day when this destructive tax is permanently repealed. In addition, as 
one who believes that our federal income tax code should be replaced by 
a national sales tax, under most circumstances, I would eagerly support 
the many provisions of this bill that are aimed at reducing the burden 
of taxation on hard-working Americans. Unfortunately, however, these 
provisions were brought before us this evening in an attempt to 
compensate for, and distract attention from, a politically-motivated, 
economically nonsensical, and utterly unprincipled move to raise the 
federally-mandated minimum wage.
  When we artificially raise wages, we will force small businesses to 
either hire fewer workers; shrink their labor force; transition to more 
efficient means of production, like automation; or simply close their 
doors altogether. The effect that this wage hike will have on the 
American worker is simple: it will price low-wage workers--the very 
people it is intended to help--out of the labor market.
  Labor is a commodity like corn, beans, gold or oil, and its value 
should be established by supply and demand in the marketplace--not by 
congressional mandate. If it makes sense to legislate a minimum wage, 
it also makes sense to legislate a living wage. And, if it makes sense 
to legislate a living wage, it makes sense to simply legislate 
prosperity . Yet, if Congress passed a law that everyone had to make 
$1,000,000 a year, there would only be a handful of people with a job 
in this country.
  Eliminating the Death Tax on small business owners stands on its own 
merit. But, adding inheritance tax reforms to a minimum wage mandate 
that will cripple small businesses is a losing proposition. While I am 
supportive of the provisions in this bill that will undoubtedly bring 
much needed relief to the American taxpayer, I would be doing my 
constituents and the people of this nation a great disservice if I 
attempted to use these ``sweeteners'' to force the poison pill of a 
minimum wage hike down the throats of America's small business owners.
  Mr. PASCRELL. Mr. Speaker, I rise tonight appalled by the way 
Republican leadership has decided to turn against American workers by 
playing politics, instead of passing a clean minimum wage increase.
  It is shameful that millions of Americans are suffering the economic 
injustice of working a full-time job and earning a wage that leaves 
them below the poverty line.
  It is unconscionable that we stand here tonight debating provisions 
on the estate tax and the extension of expiring tax provisions. These 
provisions only serve as a political ploy to kill any increase to the 
minimum wage.
  Working-class Americans have waited too long, close to a decade in 
fact, for an increase in the minimum wage. This has been the second 
longest period without a pay raise since the Federal minimum wage law 
was first enacted in 1938.
  Over this last decade while the minimum wage has remained stagnant, 
the cost of basic necessities such as energy and healthcare have 
skyrocketed--meaning that the minimum wage is no longer a livable wage.
  Today a minimum wage earner has to work a day and a half just to pay 
for a full tank of gas. That is simply shameful.
  As Americans we have always been told that if you have a job, and you 
work hard, you will have a secure future in our Nation. Yet, millions 
of Americans who do have jobs and who do work hard everyday have joined 
the ranks of the ``working poor.''
  In fact, the number of full-time year-round workers who are poor has 
more than doubled since the late 1970s.
  Let there be no doubt, a vote to increase the minimum wage to $7.25/
hour is a vote to alleviate poverty in America, and it is a vote to 
help eliminate the term ``working poor'' from our reality.
  Members of this body should be allowed a straight up-or-down vote on 
legislation to raise the minimum wage to a true livable wage of $7.25/
hour over the next 2 years.
  But instead the Republican leadership here in the House of 
Representatives has chosen to play dirty politics and attach poison 
pill provisions to this legislation with the implicit expectation of 
killing a real minimum wage increase.
  It is quite simply a slap in the face for working-class Americans.
  Ms. MILLENDER-McDONALD. Mr. Speaker, I rise today in strong 
opposition to the House Republican minimum wage legislation which is 
not a clean bill. A clean bill would not have poison pills in it.
  Mr. Speaker this is a sad day. The American people need our help. 
From coast to coast, the lowest paid Americans are clamoring for 
assistance as they struggle to live off of wages not suitable for this 
decade. It is obvious that an increase in the minimum wage is sadly 
overdue.
  Unfortunately, when the majority finally provides the opportunity to 
vote on increasing the minimum wage, it comes to us bloated, filled 
with provisions harmful to the American worker and which ensure that 
this legislation is never enacted.
  While it is unfortunate that the majority leadership has not seen fit 
to bring legislation to the floor that neither the American people nor 
most of my colleagues have had a chance to review, it is downright 
insulting that the legislation on the floor today was written knowing 
that it will never pass out of the Senate. This bill is dead on arrival 
in the Senate.
  For the last two years, the Democrats have fought to increase the 
minimum wage. The effect of the last minimum wage increase in

[[Page 16483]]

1996-97 has been completely eroded by inflation, which, when factored 
in, the $5.15 minimum wage today is lower than the $4.25 minimum wage 
level before the 1996-97 increase. At the same time fuel prices have 
continued to skyrocket, housing prices are soaring and health care 
continues to be out of reach for those whose jobs do not provide it for 
them.
  If the Democrat minimum wage initiative would come to the floor, an 
estimated 14.9 million workers would receive an increase in their 
hourly wage rate if the Democrat minimum wage were raised. Over half a 
million of these workers reside in my home State of California. But 
this Republican bill does not provide the minimum wage increase 
American workers need. It delays the increase and nullifies wage 
protections for tipped workers.
  Mr. Speaker, in the almost 10 years since the last increase in the 
minimum wage, the purchasing power of the minimum wage has deteriorated 
by 20 percent and the value of the minimum wage is at its lowest level 
since 1955 when adjusted for inflation. This is clearly unacceptable. 
The American people need us more than ever. I urge my colleagues to 
only support a clean bill focused solely on the minimum wage and to 
vote against this Republican legislation in its current form.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker it has been almost 10 
years since we've seen an increase in the Federal minimum wage.
  Unfortunately, this bill here today is not about helping American 
workers.
  The bill is full of poison pills--tax breaks for the wealthy and 
hand-outs for special interests.
  This is nothing more than a backdoor attempt to put money in the 
pockets of the wealthiest among us.
  We're playing politics and decent hardworking Americans are the ones 
paying the price.
  The reality is that there are millions of workers trying to support 
their families on $5.15 per hour.
  Each day millions of minimum wage workers are forced to choose 
between food, shelter, health care or clothing.
  No American who works hard for a living should have to make those 
types of choices.
  Mr. Speaker, it is time for a new direction that truly reflects our 
core American values.
  These hardworking Americans deserve an up-or-down vote on a clean 
minimum wage bill.
  Mr. UDALL of New Mexico. Mr. Speaker, for nearly a decade, millions 
of American workers have waited for an increase in the Federal minimum 
wage, but none has come. They have watched as the purchasing power of 
their paycheck has crumbled, giving way to inflation. Many are working 
families, struggling to make ends meet, yet for 9 years Congress has 
ignored them and refused to pass a clean, simple increase in the 
minimum wage.
  Nearly 44 percent of minimum wage workers work full time, nearly two-
thirds of whom are women. Even working full time, they often remain 
below the poverty line. They are unable to buy their own home, cannot 
afford health insurance for themselves and their children, and often 
take a second job just to pay the bills.
  Mr. Speaker it is time to increase the Federal minimum wage. I 
strongly support implementing a 2-year plan that would increase the 
minimum wage from $5.15 an hour to $7.25 an hour. However, I also 
strongly support passing such legislation cleanly, without attachments 
of tax cuts, without attachment of controversial language or convoluted 
provisions. We must demonstrate that we support those American 
families, those who are wondering why they are working 50-hour work 
weeks yet cannot seem to make ends meet.
  Ms. BORDALLO. Mr. Speaker, I rise today in strong support of 
providing American workers a living wage with which to support and 
improve their families' livelihoods. Those in America who receive the 
minimum wage for their labors are particularly vulnerable to 
experiencing greater financial pressures and a lower overall quality of 
life.
  The national minimum wage has not been increased in 9 years and has 
not kept pace with household expenses. Raising the minimum wage will 
help lift many families on Guam out of poverty. An increase in the 
Federal minimum wage is long overdue, as evidenced by the recent 
actions taken by the Guam Legislature and the Governor to increase the 
local minimum wage.
  Living wages help families ensure that their children receive proper 
nutrition, quality education, and good health care. These are essential 
to ensuring that children have happy, productive and healthy 
childhoods. Living wages earned by American workers also help American 
families realize important financial goals as well as improving, long-
term financial well-being. Eliminating high-interest debt, achieving 
home ownership, and investing now for a child's future higher education 
costs and a parents' retirement, for instance, are goals more easily 
realized by workers who earn a living wage.
  Americans have proven to be productive, innovative, and resourceful 
workers. Their wages should reflect this reality. A worker's wage 
represents his or her worth to an employer. But it also represents much 
more. Wages and salaries are the foundations upon which families are 
begun. Living wages and salaries provide the financial security under 
which those families can grow. A worker's wage or salary helps ensure 
his or her financial future. Receiving a living wage is well deserved 
by American workers.
  Mr. SCHIFF. Mr. Speaker, I rise today to express my disappointment 
that once again the Members of this House appear poised to let another 
opportunity pass us by that would have a meaningful impact in the lives 
of millions of American families. Today, we are voting on a bill that 
has been rushed to this House floor and purports to raise the Federal 
minimum wage. In reality, however, the bill before us seeks to muddy 
the waters about whether America's lowest paid workers deserve to make 
a living wage.
  In stark contrast to the bill before us today, Mr. Miller, the 
ranking member of the House Committee on Education and the Workforce, 
has introduced very simple legislation that would increase the Federal 
minimum wage to $7.25 per hour over the course of the next 2 years. 
This bill was introduced in May of 2005 and has yet to receive a 
hearing.
  The hastily drafted bill before us today, however, was only 
introduced earlier this afternoon, and the House leadership has brought 
it to the floor for a vote.
  This legislation adds unrelated and controversial provisions, that 
I'm sure some hope will end the debate and ensure that a meaningful 
increase in our minimum wage never takes place. We should instead, be 
voting today on a straightforward bill that simply raises the Federal 
minimum wage to a level that ensures that working families can emerge 
from the grasp of poverty.
  Before the House adjourns for the August recess, I believe we owe the 
American people a simple up-or-down vote on whether or not working 
Americans deserve a decent living wage.
  The current minimum wage of $5.15 per hour is not a living wage. It 
is not a wage on which single individuals, working full time, can 
adequately support themselves, and it is most certainly not a wage on 
which a single mother or single father can raise a family.
  Millions of hard-working Americans would directly benefit from a 
minimum wage increase. Some would argue that this would only benefit 
high school students and young adults who are being paid minimum wages 
on their first job at a fast food restaurant. In fact, more than 84 
percent of workers who would directly benefit from a minimum wage 
increase are above the age of 20. In addition, nearly 60 percent of 
those individuals work full time, and 45 percent of them are married 
and/or have children.
  They are the victims of our inaction, Mr. Speaker. In many cases, it 
is our children who will suffer. I am ashamed that nearly 36 million 
Americans live in poverty in our country, and that nearly 13 million of 
those who live below the poverty line are children. With a very simple 
vote today--on a very simple piece of legislation--we could 
dramatically increase the physical, mental, and financial wellbeing of 
countless American children. No one who works for a living should have 
to live in poverty, and the children of these working families must not 
be made to suffer for our collective lack of moral conviction.
  I call on my friends on the other side of the aisle, and I ask them 
to partner with us to pass a meaningful increase in the Federal minimum 
wage. We must pass legislation that does not contain controversial 
provisions that divide us. Instead, we should speak with one voice, as 
one Congress, and tell working Americans that we value their work, that 
we understand their sacrifices, and that they deserve to make a living 
wage.
  Ms. LEE. Mr. Speaker, tonight we should have had an opportunity to 
help lift 6.6 million Americans out of poverty by passing the first 
minimum wage increase in nearly a decade.
  As it is, it's an absolute disgrace that the minimum wage has been 
stagnant at $5.15 since 1997.
  Republican inaction has led to the fact that the minimum wage is at 
its lowest level in 50 years. In fact, if the minimum wage had just 
kept up with inflation since 1968, it would have been $8.88 in 2005. 
That is still, quite frankly, a pittance for what people need to live.
  But this increase is in jeopardy by a cynical, political ploy on the 
part of the House Republican leadership.

[[Page 16484]]

  Mr. Speaker, this sham minimum wage legislation contains ``poison 
pills.'' Namely, the incorporation of the estate tax cut and further 
tax cut extensions into the minimum wage bill.
  Even worse, under this sham Republican legislation 1.8 million 
workers will have to wait until June 2009 before the minimum wage 
reaches $7.25.
  Once again, the Republican majority is proving how much contempt they 
have for the working families of America.
  Mr. Speaker, Congress should be voting on a clean minimum wage bill 
that will provide a meaningful increase to working Americans. It's only 
fair.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 966, the bill is considered read and the 
previous question is ordered.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


     Motion to Recommit Offered by Mr. George Miller of California

  Mr. GEORGE MILLER of California. Mr. Speaker, I offer a motion to 
recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. GEORGE MILLER of California. I am in its present form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. George Miller of California moves to recommit the bill, 
     H.R. 5970 to the Committee on Education and the Workforce 
     with instructions to report the bill back to the House 
     forthwith with the following amendment:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Fair 
     Minimum Wage and Extension of Tax Relief Act''.
       (b) Table of Contents.--The table of contents for ths Act 
     is as follows:

Sec. 1. Short title; table of contents.

                 TITLE I--INCREASE IN THE MINIMUM WAGE

Sec. 101. Increase in the minimum wage.
Sec. 102. Applicability of minimum wage to the Commonwealth of the 
              Northern Mariana Islands.

   TITLE II--EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS

      Subtitle A--Extension and Modification of Certain Provisions

Sec. 201. Deduction for qualified tuition and related expenses.
Sec. 202. Extension and modification of new markets tax credit.
Sec. 203. Election to deduct State and local general sales taxes.
Sec. 204. Extension and modification of research credit.
Sec. 205. Work opportunity tax credit and welfare-to-work credit.
Sec. 206. Election to include combat pay as earned income for purposes 
              of earned income credit.
Sec. 207. Extension and modification of qualified zone academy bonds.
Sec. 208. Above-the-line deduction for certain expenses of elementary 
              and secondary school teachers.
Sec. 209. Extension and expansion of expensing of brownfields 
              remediation costs.
Sec. 210. Tax incentives for investment in the District of Columbia.
Sec. 211. Indian employment tax credit.
Sec. 212. Accelerated depreciation for business property on Indian 
              reservations.
Sec. 213. Fifteen-year straight-line cost recovery for qualified 
              leasehold improvements and qualified restaurant property.
Sec. 214. Cover over of tax on distilled spirits.
Sec. 215. Parity in application of certain limits to mental health 
              benefits.
Sec. 216. Corporate donations of scientific property used for research 
              and of computer technology and equipment.
Sec. 217. Availability of medical savings accounts.
Sec. 218. Taxable income limit on percentage depletion for oil and 
              natural gas produced from marginal properties.
Sec. 219. American Samoa economic development credit.
Sec. 220. Restructuring of New York Liberty Zone tax credits.
Sec. 221. Extension of bonus depreciation for certain qualified Gulf 
              Opportunity Zone property.
Sec. 222. Authority for undercover operations.
Sec. 223. Disclosures of certain tax return information.

                      Subtitle B--Other Provisions

Sec. 231. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 232. Credit for prior year minimum tax liability made refundable 
              after period of years.
Sec. 233. Returns required in connection with certain options.
Sec. 234. Partial expensing for advanced mine safety equipment.
Sec. 235. Mine rescue team training tax credit.
Sec. 236. Whistleblower reforms.
Sec. 237. Frivolous tax submissions.
Sec. 238. Addition of meningococcal and human papillomavirus vaccines 
              to list of taxable vaccines.
Sec. 239. Clarification of taxation of certain settlement funds made 
              permanent.
Sec. 240. Modification of active business definition under section 355 
              made permanent.
Sec. 241. Revision of State veterans limit made permanent.
Sec. 242. Capital gains treatment for certain self-created musical 
              works made permanent.
Sec. 243. Reduction in minimum vessel tonnage which qualifies for 
              tonnage tax made permanent.
Sec. 244. Modification of special arbitrage rule for certain funds made 
              permanent.
Sec. 245. Great Lakes domestic shipping to not disqualify vessel from 
              tonnage tax.
Sec. 246. Use of qualified mortgage bonds to finance residences for 
              veterans without regard to first-time homebuyer 
              requirement.
Sec. 247. Exclusion of gain from sale of a principal residence by 
              certain employees of the intelligence community.
Sec. 248. Treatment of coke and coke gas.
Sec. 249. Sale of property by judicial officers.
Sec. 250. Premiums for mortgage insurance.
Sec. 251. Modification of refunds for kerosene used in aviation.
Sec. 252. Deduction for qualified timber gain.
Sec. 253. Credit to holders of rural renaissance bonds.
Sec. 254. Restoration of deduction for travel expenses of spouse, etc. 
              accompanying taxpayer on business travel.
Sec. 255. Technical corrections.

  TITLE III--SURFACE MINING CONTROL AND RECLAMATION ACT AMENDMENTS OF 
                                  2006

Sec. 301. Short title.

               Subtitle A--Mining Control and Reclamation

Sec. 311. Abandoned Mine Reclamation Fund and purposes.
Sec. 312. Reclamation fee.
Sec. 313. Objectives of Fund.
Sec. 314. Reclamation of rural land.
Sec. 315. Liens.
Sec. 316. Certification.
Sec. 317. Remining incentives.
Sec. 318. Extension of limitation on application of prohibition on 
              issuance of permit.
Sec. 319. Tribal regulation of surface coal mining and reclamation 
              operations.

          Subtitle B--Coal Industry Retiree Health Benefit Act

Sec. 321. Certain related persons and successors in interest relieved 
              of liability if premiums prepaid.
Sec. 322. Transfers to funds; premium relief.
Sec. 323. Other provisions.

                 TITLE I--INCREASE IN THE MINIMUM WAGE

     SEC. 101. INCREASE IN THE MINIMUM WAGE.

       (a) In General.--Section 6(a)(1) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to 
     read as follows:
       ``(1) except as otherwise provided in this section, not 
     less than--
       ``(A) $5.15 an hour beginning September 1, 1997;
       ``(B) $5.85 an hour, beginning on the 60th day after the 
     date of enactment of the Fair Minimum Wage and Extension of 
     Tax Relief Act of 2006;
       ``(C) $6.55 an hour, beginning 12 months after that 60th 
     day; and
       ``(D) $7.25 an hour, beginning 24 months after that 60th 
     day;''.

     SEC. 102. APPLICABILITY OF MINIMUM WAGE TO THE COMMONWEALTH 
                   OF THE NORTHERN MARIANA ISLANDS.

       (a) In General.--Section 6 of the Fair Labor Standards Act 
     of 1938 (29 U.S.C. 206) shall apply to the Commonwealth of 
     the Northern Mariana Islands.
       (b) Transition.--Notwithstanding subsection (a), the 
     minimum wage applicable to the Commonwealth of the Northern 
     Mariana Islands under section 6(a)(1) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 206(a)(1)) shall be--
       (1) $3.55 an hour, beginning on the 60th day after the date 
     of enactment of this Act; and
       (2) increased by $0.50 an hour (or such lesser amount as 
     may be necessary to equal the minimum wage under section 
     6(a)(1) of such Act), beginning 6 months after the date of

[[Page 16485]]

     enactment of this Act and every 6 months thereafter until the 
     minimum wage applicable to the Commonwealth of the Northern 
     Mariana Islands under this subsection is equal to the minimum 
     wage set forth in such section.

   TITLE II--EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS

      Subtitle A--Extension and Modification of Certain Provisions

     SEC. 201. DEDUCTION FOR QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Section 222(e) is amended by striking 
     ``2005''and inserting ``2007''.
       (b) Conforming Amendments.--Section 222(b)(2)(B) is 
     amended--
       (1) by striking ``a taxable year beginning in 2004 or 
     2005'' and inserting ``any taxable year beginning after 
     2003'', and
       (2) by striking ``2004 and 2005'' in the heading and 
     inserting ``After 2003''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 202. EXTENSION AND MODIFICATION OF NEW MARKETS TAX 
                   CREDIT.

       (a) Extension.--Section 45D(f)(1)(D) is amended by striking 
     ``and 2007'' and inserting ``, 2007, and 2008''.
       (b) Regulations Regarding Non-Metropolitan Counties.--
     Section 45D(i) is amended by striking ``and'' at the end of 
     paragraph (4), by striking the period at the end of paragraph 
     (5) and inserting ``, and'', and by adding at the end the 
     following new paragraph:
       ``(6) which ensure that non-metropolitan counties receive a 
     proportional allocation of qualified equity investments.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 203. ELECTION TO DEDUCT STATE AND LOCAL GENERAL SALES 
                   TAXES.

       (a) In General.--Section 164(b)(5)(I) is amended by 
     striking ``2006'' and inserting ``2008''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 204. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.

       (a) Extension.--
       (1) In general.--Section 41(h)(1)(B) is amended by striking 
     ``2005'' and inserting ``2007''.
       (2) Conforming amendment.--Section 45C(b)(1)(D) is amended 
     by striking ``2005'' and inserting ``2007''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after December 31, 
     2005.
       (b) Increase in Rates of Alternative Incremental Credit.--
       (1) In general.--Subparagraph (A) of section 41(c)(4) 
     (relating to election of alternative incremental credit) is 
     amended--
       (A) by striking ``2.65 percent'' and inserting ``3 
     percent'',
       (B) by striking ``3.2 percent'' and inserting ``4 
     percent'', and
       (C) by striking ``3.75 percent'' and inserting ``5 
     percent''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after December 31, 
     2006.
       (c) Alternative Simplified Credit for Qualified Research 
     Expenses.--
       (1) In general.--Subsection (c) of section 41 (relating to 
     base amount) is amended by redesignating paragraphs (5) and 
     (6) as paragraphs (6) and (7), respectively, and by inserting 
     after paragraph (4) the following new paragraph:
       ``(5) Election of alternative simplified credit.--
       ``(A) In general.--At the election of the taxpayer, the 
     credit determined under subsection (a)(1) shall be equal to 
     12 percent of so much of the qualified research expenses for 
     the taxable year as exceeds 50 percent of the average 
     qualified research expenses for the 3 taxable years preceding 
     the taxable year for which the credit is being determined.
       ``(B) Special rule in case of no qualified research 
     expenses in any of 3 preceding taxable years.--
       ``(i) Taxpayers to which subparagraph applies.--The credit 
     under this paragraph shall be determined under this 
     subparagraph if the taxpayer has no qualified research 
     expenses in any one of the 3 taxable years preceding the 
     taxable year for which the credit is being determined.
       ``(ii) Credit rate.--The credit determined under this 
     subparagraph shall be equal to 6 percent of the qualified 
     research expenses for the taxable year.
       ``(C) Election.--An election under this paragraph shall 
     apply to the taxable year for which made and all succeeding 
     taxable years unless revoked with the consent of the 
     Secretary. An election under this paragraph may not be made 
     for any taxable year to which an election under paragraph (4) 
     applies.''.
       (2) Coordination with election of alternative incremental 
     credit.--
       (A) In general.--Section 41(c)(4)(B) (relating to election) 
     is amended by adding at the end the following: ``An election 
     under this paragraph may not be made for any taxable year to 
     which an election under paragraph (5) applies.''.
       (B) Transition rule.--In the case of an election under 
     section 41(c)(4) of the Internal Revenue Code of 1986 which 
     applies to the taxable year which includes the date of the 
     enactment of this Act, such election shall be treated as 
     revoked with the consent of the Secretary of the Treasury if 
     the taxpayer makes an election under section 41(c)(5) of such 
     Code (as added by subsection (c)) for such year.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after December 31, 
     2006.

     SEC. 205. WORK OPPORTUNITY TAX CREDIT AND WELFARE-TO-WORK 
                   CREDIT.

       (a) In General.--Sections 51(c)(4)(B) and 51A(f) are each 
     amended by striking ``2005'' and inserting ``2007''.
       (b) Eligibility of Ex-Felons Determined Without Regard to 
     Family Income.--Paragraph (4) of section 51(d) is amended by 
     adding ``and'' at the end of subparagraph (A), by striking 
     ``, and'' at the end of subparagraph (B) and inserting a 
     period, and by striking all that follows subparagraph (B).
       (c) Increase in Maximum Age for Eligibility of Food Stamp 
     Recipients.--Clause (i) of section 51(d)(8)(A) is amended by 
     striking ``25'' and inserting ``40''.
       (d) Extension of Paperwork Filing Deadline.--Section 
     51(d)(12)(A)(ii)(II) is amended by striking ``21st day'' and 
     inserting ``28th day''.
       (e) Consolidation of Work Opportunity Credit With Welfare-
     to-Work Credit.--
       (1) In general.--Paragraph (1) of section 51(d) is amended 
     by striking ``or'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, or'', and by adding at the end the following 
     new subparagraph:
       ``(I) a long-term family assistance recipient.''.
       (2) Long-term family assistance recipient.--Subsection (d) 
     of section 51 is amended by redesignating paragraphs (10) 
     through (12) as paragraphs (11) through (13), respectively, 
     and by inserting after paragraph (9) the following new 
     paragraph:
       ``(10) Long-term family assistance recipient.--The term 
     `long-term family assistance recipient' means any individual 
     who is certified by the designated local agency--
       ``(A) as being a member of a family receiving assistance 
     under a IV-A program (as defined in paragraph (2)(B)) for at 
     least the 18-month period ending on the hiring date,
       ``(B)(i) as being a member of a family receiving such 
     assistance for 18 months beginning after August 5, 1997, and
       ``(ii) as having a hiring date which is not more than 2 
     years after the end of the earliest such 18-month period, or
       ``(C)(i) as being a member of a family which ceased to be 
     eligible for such assistance by reason of any limitation 
     imposed by Federal or State law on the maximum period such 
     assistance is payable to a family, and
       ``(ii) as having a hiring date which is not more than 2 
     years after the date of such cessation.''.
       (3) Increased credit for employment of long-term family 
     assistance recipients.--Section 51 is amended by inserting 
     after subsection (d) the following new subsection:
       ``(e) Credit for Second-Year Wages for Employment of Long-
     Term Family Assistance Recipients.--
       ``(1) In general.--With respect to the employment of a 
     long-term family assistance recipient--
       ``(A) the amount of the work opportunity credit determined 
     under this section for the taxable year shall include 50 
     percent of the qualified second-year wages for such year, and
       ``(B) in lieu of applying subsection (b)(3), the amount of 
     the qualified first-year wages, and the amount of qualified 
     second-year wages, which may be taken into account with 
     respect to such a recipient shall not exceed $10,000 per 
     year.
       ``(2) Qualified second-year wages.--For purposes of this 
     subsection, the term `qualified second-year wages' means 
     qualified wages--
       ``(A) which are paid to a long-term family assistance 
     recipient, and
       ``(B) which are attributable to service rendered during the 
     1-year period beginning on the day after the last day of the 
     1-year period with respect to such recipient determined under 
     subsection (b)(2).
       ``(3) Special rules for agricultural and railway labor.--If 
     such recipient is an employee to whom subparagraph (A) or (B) 
     of subsection (h)(1) applies, rules similar to the rules of 
     such subparagraphs shall apply except that--
       ``(A) such subparagraph (A) shall be applied by 
     substituting `$10,000' for `$6,000', and
       ``(B) such subparagraph (B) shall be applied by 
     substituting `$833.33' for `$500'.''.
       (4) Repeal of separate welfare-to-work credit.--
       (A) In general.--Section 51A is hereby repealed.
       (B) Clerical amendment.--The table of sections for subpart 
     F of part IV of subchapter A of chapter 1 is amended by 
     striking the item relating to section 51A.
       (f) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to individuals 
     who begin

[[Page 16486]]

     work for the employer after December 31, 2005.
       (2) Consolidation.--The amendments made by subsections (b), 
     (c), (d), and (e) shall apply to individuals who begin work 
     for the employer after December 31, 2006.

     SEC. 206. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF EARNED INCOME CREDIT.

       (a) In General.--Section 32(c)(2)(B)(vi)(II) is amended by 
     striking ``2007'' and inserting ``2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 207. EXTENSION AND MODIFICATION OF QUALIFIED ZONE 
                   ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``and 2005'' and inserting ``2005, 2006, 
     and 2007''.
       (b) Special Rules Relating to Expenditures, Arbitrage, and 
     Reporting.--
       (1) In general.--Section 1397E is amended--
       (A) in subsection (d)(1), by striking ``and'' at the end of 
     subparagraph (C)(iii), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) the issue meets the requirements of subsections (f), 
     (g), and (h).'', and
       (B) by redesignating subsections (f), (g), (h), and (i) as 
     subsection (i), (j), (k), and (l), respectively, and by 
     inserting after subsection (e) the following new subsections:
       ``(f) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds from the sale of 
     the issue are to be spent for 1 or more qualified purposes 
     with respect to qualified zone academies within the 5-year 
     period beginning on the date of issuance of the qualified 
     zone academy bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds from the sale of the issue 
     will be incurred within the 6-month period beginning on the 
     date of issuance of the qualified zone academy bond, and
       ``(C) such purposes will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the issuer 
     establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     purposes will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the issuer shall redeem all of the 
     nonqualified bonds within 90 days after the end of such 
     period. For purposes of this paragraph, the amount of the 
     nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(g) Special Rules Relating to Arbitrage.--An issue shall 
     be treated as meeting the requirements of this subsection if 
     the issuer satisfies the arbitrage requirements of section 
     148 with respect to proceeds of the issue.
       ``(h) Reporting.--Issuers of qualified academy zone bonds 
     shall submit reports similar to the reports required under 
     section 149(e).''.
       (2) Conforming amendments.--Sections 54(l)(3)(B) and 
     1400N(l)(7)(B)(ii) are each amended by striking ``section 
     1397E(i)'' and inserting ``section 1397E(l)''.
       (c) Effective Dates.--
       (1) Extension.--The amendment made by subsection (a) shall 
     apply to obligations issued after December 31, 2005.
       (2) Special rules.--The amendments made by subsection (b) 
     shall apply to obligations issued after the date of the 
     enactment of this Act pursuant to allocations of the national 
     zone academy bond limitation for calendar years after 2005.

     SEC. 208. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EXPENSES OF 
                   ELEMENTARY AND SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) is 
     amended by striking ``or 2005'' and inserting ``2005, 2006, 
     or 2007''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 209. EXTENSION AND EXPANSION OF EXPENSING OF BROWNFIELDS 
                   REMEDIATION COSTS.

       (a) Extension.--Subsection (h) of section 198 is amended by 
     striking ``2005'' and inserting ``2007''.
       (b) Expansion.--Section 198(d)(1) (defining hazardous 
     substance) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) any petroleum product (as defined in section 
     4612(a)(3)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2005.

     SEC. 210. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of Zone.--
       (1) In general.--Subsection (f) of section 1400 is amended 
     by striking ``2005'' both places it appears and inserting 
     ``2007''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2005.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2005'' and inserting ``2007''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2005.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2006'' each place it appears and inserting 
     ``2008''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2010'' and inserting ``2012'', and
       (ii) by striking ``2010'' in the heading thereof and 
     inserting ``2012''.
       (B) Section 1400B(g)(2) is amended by striking ``2010'' and 
     inserting ``2012''.
       (C) Section 1400F(d) is amended by striking ``2010'' and 
     inserting ``2012''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2005.
       (B) Conforming amendments.--The amendments made by 
     paragraph (2) shall take effect on the date of the enactment 
     of this Act.
       (d) First-Time Homebuyer Credit.--
       (1) In general.--Subsection (i) of section 1400C is amended 
     by striking ``2006'' and inserting ``2008''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2005.

     SEC. 211. INDIAN EMPLOYMENT TAX CREDIT.

       (a) In General.--Section 45A(f) is amended by striking 
     ``2005'' and inserting ``2007''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 212. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATIONS.

       (a) In General.--Section 168(j)(8) is amended by striking 
     ``2005'' and inserting ``2007''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2005.

     SEC. 213. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR 
                   QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED 
                   RESTAURANT PROPERTY.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) are each amended by striking ``2006'' and 
     inserting ``2008''.
       (b) Treatment of Restaurant Property To Include New 
     Construction.--Paragraph (7) of section 168(e) (relating to 
     classification of property) is amended to read as follows:
       ``(7) Qualified restaurant property.--The term `qualified 
     restaurant property' means any section 1250 property which is 
     a building or an improvement to a building if more than 50 
     percent of the building's square footage is devoted to 
     preparation of, and seating for on-premises consumption of, 
     prepared meals.''.
       (c) Effective Dates.--
       (1) Subsection (a).--The amendments made by subsection (a) 
     shall apply to property placed in service after December 31, 
     2005.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 214. COVER OVER OF TAX ON DISTILLED SPIRITS.

       (a) In General.--Section 7652(f)(1) is amended by striking 
     ``2006'' and inserting ``2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to articles brought into the United States after 
     December 31, 2005.

     SEC. 215. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL 
                   HEALTH BENEFITS.

       (a) Amendment to the Internal Revenue Code of 1986.--
     Section 9812(f)(3) is amended by striking ``2006'' and 
     inserting ``2007''.
       (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 ``2006'' and inserting ``2007''.
       (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 ``2006''and inserting ``2007''.

     SEC. 216. CORPORATE DONATIONS OF SCIENTIFIC PROPERTY USED FOR 
                   RESEARCH AND OF COMPUTER TECHNOLOGY AND 
                   EQUIPMENT.

       (a) Extension of Computer Technology and Equipment 
     Donation.--
       (1) In general.--Section 170(e)(6)(G) is amended by 
     striking ``2005'' and inserting ``2007''.

[[Page 16487]]

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2005.
       (b) Expansion of Charitable Contribution Allowed for 
     Scientific Property Used for Research and for Computer 
     Technology and Equipment Used for Educational Purposes.--
       (1) Scientific property used for research.--
       (A) In general.--Clause (ii) of section 170(e)(4)(B) 
     (defining qualified research contributions) is amended by 
     inserting ``or assembled'' after ``constructed''.
       (B) Conforming amendment.--Clause (iii) of section 
     170(e)(4)(B) is amended by inserting ``or assembly'' after 
     ``construction''.
       (2) Computer technology and equipment for educational 
     purposes.--
       (A) In general.--Clause (ii) of section 170(e)(6)(B) is 
     amended by inserting ``or assembled'' after ``constructed'' 
     and ``or assembling'' after ``construction''.
       (B) Conforming amendment.--Subparagraph (D) of section 
     170(e)(6) is amended by inserting ``or assembled'' after 
     ``constructed'' and ``or assembly'' after ``construction''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 217. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

       (a) In General.--Paragraphs (2) and (3)(B) of section 
     220(i) are each amended by striking ``2005'' each place it 
     appears in the text and headings and inserting ``2007''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 220(j) is amended--
       (A) in the text by striking ``or 2004'' each place it 
     appears and inserting ``2004, 2005, or 2006'', and
       (B) in the heading by striking ``or 2004'' and inserting 
     ``2004, 2005, or 2006'' .
       (2) Subparagraph (A) of section 220(j)(4) is amended by 
     striking ``and 2004'' and inserting ``2004, 2005, and 2006''.
       (c) Time for Filing Reports, etc.--
       (1) The report required by section 220(j)(4) of the 
     Internal Revenue Code of 1986 to be made on August 1, 2005, 
     shall be treated as timely if made before the close of the 
     90-day period beginning on the date of the enactment of this 
     Act.
       (2) The determination and publication required by section 
     220(j)(5) of such Code with respect to calendar year 2005 
     shall be treated as timely if made before the close of the 
     120-day period beginning on the date of the enactment of this 
     Act. If the determination under the preceding sentence is 
     that 2005 is a cut-off year under section 220(i) of such 
     Code, the cut-off date under such section 220(i) shall be the 
     last day of such 120-day period.

     SEC. 218. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 
                   OIL AND NATURAL GAS PRODUCED FROM MARGINAL 
                   PROPERTIES.

       (a) In General.--Section 613A(c)(6)(H) is amended by 
     striking ``2006'' and inserting ``2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 219. AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT.

       (a) In General.--For purposes of section 30A of the 
     Internal Revenue Code of 1986, a domestic corporation shall 
     be treated as a qualified domestic corporation to which such 
     section applies if such corporation--
       (1) is an existing credit claimant with respect to American 
     Samoa, and
       (2) elected the application of section 936 of the Internal 
     Revenue Code of 1986 for its last taxable year beginning 
     before January 1, 2006.
       (b) Special Rules for Application of Section.--The 
     following rules shall apply in applying section 30A of the 
     Internal Revenue Code of 1986 for purposes of this section:
       (1) Amount of credit.--Notwithstanding section 30A(a)(1) of 
     such Code, the amount of the credit determined under section 
     30A(a)(1) of such Code for any taxable year shall be the 
     amount determined under section 30A(d) of such Code, except 
     that section 30A(d) shall be applied without regard to 
     paragraph (3) thereof.
       (2) Separate application.--In applying section 30A(a)(3) of 
     such Code in the case of a corporation treated as a qualified 
     domestic corporation by reason of this section, section 30A 
     of such Code (and so much of section 936 of such Code as 
     relates to such section 30A) shall be applied separately with 
     respect to American Samoa.
       (3) Foreign tax credit allowed.--Notwithstanding section 
     30A(e) of such Code, the provisions of section 936(c) of such 
     Code shall not apply with respect to the credit allowed by 
     reason of this section.
       (c) Definitions.--For purposes of this section, any term 
     which is used in this section which is also used in section 
     30A or 936 of such Code shall have the same meaning given 
     such term by such section 30A or 936.
       (d) Application of Section.--Notwithstanding section 30A(h) 
     or section 936(j) of such Code, this section (and so much of 
     section 30A and section 936 of such Code as relates to this 
     section) shall apply to the first two taxable years of a 
     corporation to which subsection (a) applies which begin after 
     December 31, 2005, and before January 1, 2008.

     SEC. 220. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

       (a) In General.--Part I of subchapter Y of chapter 1 is 
     amended by redesignating section 1400L as 1400K and by adding 
     at the end the following new section:

     ``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so much of the portion of the qualifying 
     project expenditure amount allocated under subsection (b)(3) 
     to such governmental unit for the calendar year as is 
     allocated by such governmental unit to such period under 
     subsection (b)(4).
       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--
       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and
       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be taken into account by such governmental unit 
     under subsection (a) for any calendar year in the credit 
     period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $1,750,000,000.
       ``(C) Annual limit.--
       ``(i) In general.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--

       ``(I) the applicable limit, plus
       ``(II) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.

       ``(ii) Applicable limit.--For purposes of clause (i), the 
     applicable limit for any calendar year is--

       ``(I) in the case of calendar years 2007 through 2016, 
     $100,000,000,
       ``(II) in the case of calendar year 2017 or 2018, 
     $200,000,000,
       ``(III) in the case of calendar year 2019, $150,000,000,
       ``(IV) in the case of calendar year 2020 or 2021, 
     $100,000,000, and
       ``(V) in the case of any calendar year after 2021, zero.

       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

       ``(I) such excess, or
       ``(II) the qualifying project expenditure amount for such 
     calendar year, reduced by

       ``(ii) the aggregate amount allocated under this 
     subparagraph for all preceding calendar years.
       ``(4) Allocation to payroll periods.--Each New York Liberty 
     Zone governmental unit which has been allocated a portion of 
     the qualifying project expenditure amount under paragraph (3) 
     for a calendar year may allocate such portion to payroll 
     periods beginning in such calendar year as such governmental 
     unit determines appropriate.
       ``(c) Carryover of Unused Allocations.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     the amount allocated under subsection (b)(3) to a New York 
     Liberty Zone governmental unit for any calendar year exceeds 
     the aggregate taxes imposed by section 3402 for which such 
     governmental unit is liable under section 3403 for periods 
     beginning in such year, such excess shall be carried to the 
     succeeding calendar year and added to the allocation of such 
     governmental unit for such succeeding calendar year. No 
     amount may be carried under the preceding sentence to a 
     calendar year after 2026.

[[Page 16488]]

       ``(2) Reallocation.--If a New York Liberty Zone 
     governmental unit does not use an amount allocated to it 
     under subsection (b)(3) within the time prescribed by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York, then such amount shall after such time 
     be treated for purposes of subsection (b)(3) in the same 
     manner as if it had never been allocated.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Credit period.--The term `credit period' means the 
     15-year period beginning on January 1, 2007.
       ``(2) New york liberty zone governmental unit.--The term 
     `New York Liberty Zone governmental unit' means--
       ``(A) the State of New York,
       ``(B) the City of New York, New York, and
       ``(C) any agency or instrumentality of such State or City.
       ``(3) Treatment of funds.--Any expenditure for a qualifying 
     project taken into account for purposes of the credit under 
     this section shall be considered State and local funds for 
     the purpose of any Federal program.
       ``(4) Treatment of credit amounts for purposes of 
     withholding taxes.--For purposes of this title, a New York 
     Liberty Zone governmental unit shall be treated as having 
     paid to the Secretary, on the day on which wages are paid to 
     employees, an amount equal to the amount of the credit 
     allowed to such entity under subsection (a) with respect to 
     such wages, but only if such governmental unit deducts and 
     withholds wages for such payroll period under section 3401 
     (relating to wage withholding).
       ``(e) Reporting.--The Governor of the State of New York and 
     the Mayor of the City of New York, New York, shall jointly 
     submit to the Secretary an annual report--
       ``(1) which certifies--
       ``(A) the qualifying project expenditure amount for the 
     calendar year, and
       ``(B) the amount allocated to each New York Liberty Zone 
     governmental unit under subsection (b)(3) for the calendar 
     year, and
       ``(2) includes such other information as the Secretary may 
     require to carry out this section.
       ``(f) Guidance.--The Secretary may prescribe such guidance 
     as may be necessary or appropriate to ensure compliance with 
     the purposes of this section.
       ``(g) Termination.--No credit shall be allowed under 
     subsection (a) for any calender year after 2026.''.
       (b) Termination of Certain New York Liberty Zone 
     Benefits.--
       (1) Special allowance and expensing.--Section 
     1400K(b)(2)(A)(v), as redesignated by subsection (a), is 
     amended by striking ``the termination date'' and inserting 
     ``the date of the enactment of the Fair Minimum Wage and 
     Extension of Tax Relief Act or the termination date if 
     pursuant to a binding contract in effect on such enactment 
     date''.
       (2) Leasehold.--Section 1400K(c)(2)(B), as so redesignated, 
     is amended by striking ``before January 1, 2007'' and 
     inserting ``on or before the date of the enactment of the 
     Fair Minimum Wage and Extension of Tax Relief Act or before 
     January 1, 2007, if pursuant to a binding contract in effect 
     on such enactment date''.
       (c) Conforming Amendments.--
       (1) Section 38(c)(3)(B) is amended by striking ``section 
     1400L(a)'' and inserting ``section 1400K(a)''.
       (2) Section 168(k)(2)(D)(ii) is amended by striking 
     ``section 1400L(c)(2)'' and inserting ``1400K(c)(2)''.
       (3) The table of sections for part I of subchapter Y of 
     chapter 1 is amended by striking ``1400L'' and inserting 
     ``1400K''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to periods 
     beginning after December 31, 2006.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall take effect as if included in section 301 of the Job 
     Creation and Worker Assistance Act of 2002.

     SEC. 221. EXTENSION OF BONUS DEPRECIATION FOR CERTAIN 
                   QUALIFIED GULF OPPORTUNITY ZONE PROPERTY.

       (a) In General.--Subsection (d) of section 1400N is amended 
     by adding at the end the following new paragraph:
       ``(6) Extension for certain property.--
       ``(A) In general.--In the case of any specified Gulf 
     Opportunity Zone extension property, paragraph (2)(A) shall 
     be applied without regard to clause (v) thereof.
       ``(B) Specified gulf opportunity zone extension property.--
     For purposes of this paragraph, the term `specified Gulf 
     Opportunity Zone extension property' means property--
       ``(i) substantially all of the use of which is in one or 
     more specified portions of the GO Zone, and
       ``(ii) which is--

       ``(I) nonresidential real property or residential rental 
     property which is placed in service by the taxpayer on or 
     before December 31, 2009, or
       ``(II) in the case of a taxpayer who places a building 
     described in subclause (I) in service on or before December 
     31, 2009, property described in section 168(k)(2)(A)(i) if 
     substantially all of the use of such property is in such 
     building and such property is placed in service by the 
     taxpayer not later than 90 days after such building is placed 
     in service.

       ``(C) Specified portions of the go zone.--For purposes of 
     this paragraph, the term `specified portions of the GO Zone' 
     means those portions of the GO Zone which are in any county 
     or parish which is identified by the Secretary as being a 
     county or parish in which hurricanes occurring during 2005 
     damaged (in the aggregate) more than 40 percent of the 
     housing units in such county or parish which were occupied 
     (determined according to the 2000 Census).''.
       (b) Extension Not Applicable to Increased Section 179 
     Expensing.--Paragraph (2) of section 1400N(e) is amended by 
     inserting ``without regard to subsection (d)(6)'' after 
     ``subsection (d)(2)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 101 of the Gulf 
     Opportunity Zone Act of 2005.

     SEC. 222. AUTHORITY FOR UNDERCOVER OPERATIONS.

       Paragraph (6) of section 7608(c) (relating to application 
     of section) is amended by striking ``2007'' both places it 
     appears and inserting ``2008''.

     SEC. 223. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION.

       (a) Disclosures To Facilitate Combined Employment Tax 
     Reporting.--
       (1) In general.--Subparagraph (B) of section 6103(d)(5) 
     (relating to termination) is amended by striking ``2006'' and 
     inserting ``2007''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to disclosures after December 31, 2006.
       (b) Disclosures Relating to Terrorist Activities.--
       (1) In general.--Clause (iv) of section 6103(i)(3)(C) and 
     subparagraph (E) of section 6103(i)(7) are each amended by 
     striking ``2006'' and inserting ``2007''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to disclosures after December 31, 2006.
       (c) Disclosures Relating to Student Loans.--
       (1) In general.--Subparagraph (D) of section 6103(l)(13) 
     (relating to termination) is amended by striking ``2006'' and 
     inserting ``2007''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to requests made after December 31, 2006.

                      Subtitle B--Other Provisions

     SEC. 231. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subsection (d) of section 199 (relating to 
     definitions and special rules) is amended by redesignating 
     paragraph (8) as paragraph (9) and by inserting after 
     paragraph (7) the following new paragraph:
       ``(8) Treatment of activities in puerto rico.--
       ``(A) In general.--In the case of any taxpayer with gross 
     receipts for any taxable year from sources within the 
     Commonwealth of Puerto Rico, if all of such receipts are 
     taxable under section 1 or 11 for such taxable year, then for 
     purposes of determining the domestic production gross 
     receipts of such taxpayer for such taxable year under 
     subsection (c)(4), the term `United States' shall include the 
     Commonwealth of Puerto Rico.
       ``(B) Special rule for applying wage limitation.--In the 
     case of any taxpayer described in subparagraph (A), for 
     purposes of applying the limitation under subsection (b) for 
     any taxable year, the determination of W-2 wages of such 
     taxpayer shall be made without regard to any exclusion under 
     section 3401(a)(8) for remuneration paid for services 
     performed in Puerto Rico.
       ``(C) Termination.--This paragraph shall apply only with 
     respect to the first 2 taxable years of the taxpayer 
     beginning after December 31, 2005, and before January 1, 
     2008.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 232. CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY MADE 
                   REFUNDABLE AFTER PERIOD OF YEARS.

       (a) In General.--Section 53 (relating to credit for prior 
     year minimum tax liability) is amended by adding at the end 
     the following new subsection:
       ``(e) Special Rule for Individuals With Long-Term Unused 
     Credits.--
       ``(1) In general.--If an individual has a long-term unused 
     minimum tax credit for any taxable year beginning before 
     January 1, 2013, the amount determined under subsection (c) 
     for such taxable year shall not be less than the AMT 
     refundable credit amount for such taxable year.
       ``(2) Amt refundable credit amount.--For purposes of 
     paragraph (1)--
       ``(A) In general.--The term `AMT refundable credit amount' 
     means, with respect to any taxable year, the amount equal to 
     the greater of--
       ``(i) the lesser of--

       ``(I) $5,000, or
       ``(II) the amount of long-term unused minimum tax credit 
     for such taxable year, or

       ``(ii) 20 percent of the amount of such credit.
       ``(B) Phaseout of amt refundable credit amount.--
       ``(i) In general.--In the case of an individual whose 
     adjusted gross income for any

[[Page 16489]]

     taxable year exceeds the threshold amount (within the meaning 
     of section 151(d)(3)(C)), the AMT refundable credit amount 
     determined under subparagraph (A) for such taxable year shall 
     be reduced by the applicable percentage (within the meaning 
     of section 151(d)(3)(B)).
       ``(ii) Adjusted gross income.--For purposes of clause (i), 
     adjusted gross income shall be determined without regard to 
     sections 911, 931, and 933.
       ``(3) Long-term unused minimum tax credit.--
       ``(A) In general.--For purposes of this subsection, the 
     term `long-term unused minimum tax credit' means, with 
     respect to any taxable year, the portion of the minimum tax 
     credit determined under subsection (b) attributable to the 
     adjusted net minimum tax for taxable years before the 3rd 
     taxable year immediately preceding such taxable year.
       ``(B) First-in, first-out ordering rule.--For purposes of 
     subparagraph (A), credits shall be treated as allowed under 
     subsection (a) on a first-in, first-out basis.
       ``(4) Credit refundable.--For purposes of this title (other 
     than this section), the credit allowed by reason of this 
     subsection shall be treated as if it were allowed under 
     subpart C.''.
       (b) Conforming Amendments.--
       (1) Section 6211(b)(4)(A) is amended by striking ``and 34'' 
     and inserting ``34, and 53(e)''.
       (2) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting ``or 53(e)'' after 
     ``section 35''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 233. RETURNS REQUIRED IN CONNECTION WITH CERTAIN 
                   OPTIONS.

       (a) In General.--So much of section 6039(a) as follows 
     paragraph (2) is amended to read as follows:
     ``shall, for such calendar year, make a return at such time 
     and in such manner, and setting forth such information, as 
     the Secretary may by regulations prescribe.''.
       (b) Statements to Persons With Respect to Whom Information 
     Is Furnished.--Section 6039 is amended by redesignating 
     subsections (b) and (c) as subsection (c) and (d), 
     respectively, and by inserting after subsection (a) the 
     following new subsection:
       ``(b) Statements to Be Furnished to Persons With Respect to 
     Whom Information Is Reported.--Every corporation making a 
     return under subsection (a) shall furnish to each person 
     whose name is set forth in such return a written statement 
     setting forth such information as the Secretary may by 
     regulations prescribe. The written statement required under 
     the preceding sentence shall be furnished to such person on 
     or before January 31 of the year following the calendar year 
     for which the return under subsection (a) was made.''.
       (c) Conforming Amendments.--
       (1) Section 6724(d)(1)(B) is amended by striking ``or'' at 
     the end of clause (xvii), by striking ``and'' at the end of 
     clause (xviii) and inserting ``or'', and by adding at the end 
     the following new clause:
       ``(xix) section 6039(a) (relating to returns required with 
     respect to certain options), and''.
       (2) Section 6724(d)(2)(B) is amended by striking ``section 
     6039(a)'' and inserting ``section 6039(b)''.
       (3) The heading of section 6039 and the item relating to 
     such section in the table of sections of subpart A of part 
     III of subchapter A of chapter 61 of such Code are each 
     amended by striking ``Information'' and inserting 
     ``Returns''.
       (4) The heading of subsection (a) of section 6039 is 
     amended by striking ``Furnishing of Information'' and 
     inserting ``Requirement of Reporting''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after the date of the 
     enactment of this Act.

     SEC. 234. PARTIAL EXPENSING FOR ADVANCED MINE SAFETY 
                   EQUIPMENT.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 179D the following new 
     section:

     ``SEC. 179E. ELECTION TO EXPENSE ADVANCED MINE SAFETY 
                   EQUIPMENT.

       ``(a) Treatment as Expenses.--A taxpayer may elect to treat 
     50 percent of the cost of any qualified advanced mine safety 
     equipment property as an expense which is not chargeable to 
     capital account. Any cost so treated shall be allowed as a 
     deduction for the taxable year in which the qualified 
     advanced mine safety equipment property is placed in service.
       ``(b) Election.--
       ``(1) In general.--An election under this section for any 
     taxable year shall be made on the taxpayer's return of the 
     tax imposed by this chapter for the taxable year. Such 
     election shall specify the advanced mine safety equipment 
     property to which the election applies and shall be made in 
     such manner as the Secretary may by regulations prescribe.
       ``(2) Election irrevocable.--Any election made under this 
     section may not be revoked except with the consent of the 
     Secretary.
       ``(c) Qualified Advanced Mine Safety Equipment Property.--
     For purposes of this section, the term `qualified advanced 
     mine safety equipment property' means any advanced mine 
     safety equipment property for use in any underground mine 
     located in the United States--
       ``(1) the original use of which commences with the 
     taxpayer, and
       ``(2) which is placed in service by the taxpayer after the 
     date of the enactment of this section.
       ``(d) Advanced Mine Safety Equipment Property.--For 
     purposes of this section, the term `advanced mine safety 
     equipment property' means any of the following:
       ``(1) Emergency communication technology or device which is 
     used to allow a miner to maintain constant communication with 
     an individual who is not in the mine.
       ``(2) Electronic identification and location device which 
     allows an individual who is not in the mine to track at all 
     times the movements and location of miners working in or at 
     the mine.
       ``(3) Emergency oxygen-generating, self-rescue device which 
     provides oxygen for at least 90 minutes.
       ``(4) Pre-positioned supplies of oxygen which (in 
     combination with self-rescue devices) can be used to provide 
     each miner on a shift, in the event of an accident or other 
     event which traps the miner in the mine or otherwise 
     necessitates the use of such a self-rescue device, the 
     ability to survive for at least 48 hours.
       ``(5) Comprehensive atmospheric monitoring system which 
     monitors the levels of carbon monoxide, methane, and oxygen 
     that are present in all areas of the mine and which can 
     detect smoke in the case of a fire in a mine.
       ``(e) Coordination With Section 179.--No expenditures shall 
     be taken into account under subsection (a) with respect to 
     the portion of the cost of any property specified in an 
     election under section 179.
       ``(f) Reporting.--No deduction shall be allowed under 
     subsection (a) to any taxpayer for any taxable year unless 
     such taxpayer files with the Secretary a report containing 
     such information with respect to the operation of the mines 
     of the taxpayer as the Secretary shall require.
       ``(g) Termination.--This section shall not apply to 
     property placed in service after December 31, 2008.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1) is amended by striking ``or'' at the 
     end of subparagraph (J), by striking the period at the end of 
     subparagraph (K) and inserting ``, or'', and by inserting 
     after subparagraph (K) the following new subparagraph:
       ``(L) expenditures for which a deduction is allowed under 
     section 179E.''.
       (2) Section 312(k)(3)(B) is amended by striking ``or 179D'' 
     each place it appears in the heading and text thereof and 
     inserting ``179D, or 179E''.
       (3) Paragraphs (2)(C) and (3)(C) of section 1245(a) are 
     each amended by inserting ``179E,'' after ``179D,''.
       (4) The table of sections for part VI of subchapter B of 
     chapter 1 is amended by inserting after the item relating to 
     section 179D the following new item:

``Sec. 179E. Election to expense advanced mine safety equipment.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred after the date of the 
     enactment of this Act.

     SEC. 235. MINE RESCUE TEAM TRAINING TAX CREDIT.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45N. MINE RESCUE TEAM TRAINING CREDIT.

       ``(a) Amount of Credit.--For purposes of section 38, the 
     mine rescue team training credit determined under this 
     section with respect to each qualified mine rescue team 
     employee of an eligible employer for any taxable year is an 
     amount equal to the lesser of--
       ``(1) 20 percent of the amount paid or incurred by the 
     taxpayer during the taxable year with respect to the training 
     program costs of such qualified mine rescue team employee 
     (including wages of such employee while attending such 
     program), or
       ``(2) $10,000.
       ``(b) Qualified Mine Rescue Team Employee.--For purposes of 
     this section, the term `qualified mine rescue team employee' 
     means with respect to any taxable year any full-time employee 
     of the taxpayer who is--
       ``(1) a miner eligible for more than 6 months of such 
     taxable year to serve as a mine rescue team member as a 
     result of completing, at a minimum, an initial 20-hour course 
     of instruction as prescribed by the Mine Safety and Health 
     Administration's Office of Educational Policy and 
     Development, or
       ``(2) a miner eligible for more than 6 months of such 
     taxable year to serve as a mine rescue team member by virtue 
     of receiving at least 40 hours of refresher training in such 
     instruction.
       ``(c) Eligible Employer.--For purposes of this section, the 
     term `eligible employer' means any taxpayer which employs 
     individuals as miners in underground mines in the United 
     States.

[[Page 16490]]

       ``(d) Wages.--For purposes of this section, the term 
     `wages' has the meaning given to such term by subsection (b) 
     of section 3306 (determined without regard to any dollar 
     limitation contained in such section).
       ``(e) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 2008.''.
       (b) Credit Made Part of General Business Credit.--Section 
     38(b) is amended by striking ``and'' at the end of paragraph 
     (29), by striking the period at the end of paragraph (30) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(31) the mine rescue team training credit determined 
     under section 45N(a).''.
       (c) No Double Benefit.--Section 280C is amended by adding 
     at the end the following new subsection:
       ``(e) Mine Rescue Team Training Credit.--No deduction shall 
     be allowed for that portion of the expenses otherwise 
     allowable as a deduction for the taxable year which is equal 
     to the amount of the credit determined for the taxable year 
     under section 45N(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. 45N. Mine rescue team training credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 236. WHISTLEBLOWER REFORMS.

       (a) Awards to Whistleblowers.--
       (1) In general.--Section 7623 (relating to expenses of 
     detection of underpayments and fraud, etc.) is amended--
       (A) by striking ``The Secretary'' and inserting ``(a) In 
     General.--The Secretary'',
       (B) by striking ``and'' at the end of paragraph (1) and 
     inserting ``or'',
       (C) by striking ``(other than interest)'', and
       (D) by adding at the end the following new subsection:
       ``(b) Awards to Whistleblowers.--
       ``(1) In general.--If the Secretary proceeds with any 
     administrative or judicial action described in subsection (a) 
     based on information brought to the Secretary's attention by 
     an individual, such individual shall, subject to paragraph 
     (2), receive as an award at least 15 percent but not more 
     than 30 percent of the collected proceeds (including 
     penalties, interest, additions to tax, and additional 
     amounts) resulting from the action (including any related 
     actions) or from any settlement in response to such action. 
     The determination of the amount of such award by the 
     Whistleblower Office shall depend upon the extent to which 
     the individual substantially contributed to such action.
       ``(2) Award in case of less substantial contribution.--
       ``(A) In general.--In the event the action described in 
     paragraph (1) is one which the Whistleblower Office 
     determines to be based principally on disclosures of specific 
     allegations (other than information provided by the 
     individual described in paragraph (1)) resulting from a 
     judicial or administrative hearing, from a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, the Whistleblower Office may award such sums as it 
     considers appropriate, but in no case more than 10 percent of 
     the collected proceeds (including penalties, interest, 
     additions to tax, and additional amounts) resulting from the 
     action (including any related actions) or from any settlement 
     in response to such action, taking into account the 
     significance of the individual's information and the role of 
     such individual and any legal representative of such 
     individual in contributing to such action.
       ``(B) Nonapplication of paragraph where individual is 
     original source of information.--Subparagraph (A) shall not 
     apply if the information resulting in the initiation of the 
     action described in paragraph (1) was originally provided by 
     the individual described in paragraph (1).
       ``(3) Reduction in or denial of award.--If the 
     Whistleblower Office determines that the claim for an award 
     under paragraph (1) or (2) is brought by an individual who 
     planned and initiated the actions that led to the 
     underpayment of tax or actions described in subsection 
     (a)(2), then the Whistleblower Office may appropriately 
     reduce such award. If such individual is convicted of 
     criminal conduct arising from the role described in the 
     preceding sentence, the Whistleblower Office shall deny any 
     award.
       ``(4) Appeal of award determination.--Any determination 
     regarding an award under paragraph (1), (2), or (3) may, 
     within 30 days of such determination, be appealed to the Tax 
     Court (and the Tax Court shall have jurisdiction with respect 
     to such matter).
       ``(5) Application of this subsection.--This subsection 
     shall apply with respect to any action--
       ``(A) against any taxpayer, but in the case of any 
     individual, only if such individual's gross income exceeds 
     $200,000 for any taxable year subject to such action, and
       ``(B) if the tax, penalties, interest, additions to tax, 
     and additional amounts in dispute exceed $2,000,000.
       ``(6) Additional rules.--
       ``(A) No contract necessary.--No contract with the Internal 
     Revenue Service is necessary for any individual to receive an 
     award under this subsection.
       ``(B) Representation.--Any individual described in 
     paragraph (1) or (2) may be represented by counsel.
       ``(C) Submission of information.--No award may be made 
     under this subsection based on information submitted to the 
     Secretary unless such information is submitted under penalty 
     of perjury.''.
       (2) Assignment to special trial judges.--
       (A) In general.--Section 7443A(b) (relating to proceedings 
     which may be assigned to special trial judges) is amended by 
     striking ``and'' at the end of paragraph (4), by 
     redesignating paragraph (5) as paragraph (6), and by 
     inserting after paragraph (4) the following new paragraph:
       ``(5) any proceeding under section 7623(b)(4), and''.
       (B) Conforming amendment.--Section 7443A(c) is amended by 
     striking ``or (4)'' and inserting ``(4), or (5)''.
       (3) Deduction allowed whether or not taxpayer itemizes.--
     Subsection (a) of section 62 (relating to general rule 
     defining adjusted gross income) is amended by inserting after 
     paragraph (20) the following new paragraph:
       ``(21) Attorneys fees relating to awards to 
     whistleblowers.--Any deduction allowable under this chapter 
     for attorney fees and court costs paid by, or on behalf of, 
     the taxpayer in connection with any award under section 
     7623(b) (relating to awards to whistleblowers). The preceding 
     sentence shall not apply to any deduction in excess of the 
     amount includible in the taxpayer's gross income for the 
     taxable year on account of such award.''.
       (b) Whistleblower Office.--
       (1) In general.--Not later than the date which is 12 months 
     after the date of the enactment of this Act, the Secretary of 
     the Treasury shall issue guidance for the operation of a 
     whistleblower program to be administered in the Internal 
     Revenue Service by an office to be known as the 
     ``Whistleblower Office'' which--
       (A) shall at all times operate at the direction of the 
     Commissioner of Internal Revenue and coordinate and consult 
     with other divisions in the Internal Revenue Service as 
     directed by the Commissioner of Internal Revenue,
       (B) shall analyze information received from any individual 
     described in section 7623(b) of the Internal Revenue Code of 
     1986 and either investigate the matter itself or assign it to 
     the appropriate Internal Revenue Service office, and
       (C) in its sole discretion, may ask for additional 
     assistance from such individual or any legal representative 
     of such individual.
       (2) Request for assistance.--The guidance issued under 
     paragraph (1) shall specify that any assistance requested 
     under paragraph (1)(C) shall be under the direction and 
     control of the Whistleblower Office or the office assigned to 
     investigate the matter under paragraph (1)(A). No individual 
     or legal representative whose assistance is so requested may 
     by reason of such request represent himself or herself as an 
     employee of the Federal Government.
       (c) Report by Secretary.--The Secretary of the Treasury 
     shall each year conduct a study and report to Congress on the 
     use of section 7623 of the Internal Revenue Code of 1986, 
     including--
       (1) an analysis of the use of such section during the 
     preceding year and the results of such use, and
       (2) any legislative or administrative recommendations 
     regarding the provisions of such section and its application.
       (d) Effective Date.--The amendments made by subsection (a) 
     shall apply to information provided on or after the date of 
     the enactment of this Act.

     SEC. 237. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect, and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or

[[Page 16491]]

       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(f) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 238. ADDITION OF MENINGOCOCCAL AND HUMAN PAPILLOMAVIRUS 
                   VACCINES TO LIST OF TAXABLE VACCINES.

       (a) Meningococcal Vaccine.--Section 4132(a)(1) (defining 
     taxable vaccine) is amended by adding at the end the 
     following new subparagraph:
       ``(O) Any meningococcal vaccine.''.
       (b) Human Papillomavirus Vaccine.--Section 4132(a)(1), as 
     amended by subsection (a), is amended by adding at the end 
     the following new subparagraph:
       ``(P) Any vaccine against the human papillomavirus.''.
       (c) Effective Date.--
       (1) Sales, etc.--The amendments made by this section shall 
     apply to sales and uses on or after the first day of the 
     first month which begins more than 4 weeks after the date of 
     the enactment of this Act.
       (2) Deliveries.--For purposes of paragraph (1) and section 
     4131 of the Internal Revenue Code of 1986, in the case of 
     sales on or before the effective date described in such 
     paragraph for which delivery is made after such date, the 
     delivery date shall be considered the sale date.

     SEC. 239. CLARIFICATION OF TAXATION OF CERTAIN SETTLEMENT 
                   FUNDS MADE PERMANENT.

       (a) In General.--Subsection (g) of section 468B, as amended 
     by section 201 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking paragraph 
     (3).
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 201 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 240. MODIFICATION OF ACTIVE BUSINESS DEFINITION UNDER 
                   SECTION 355 MADE PERMANENT.

       (a) In General.--Subparagraphs (A) and (D) of section 
     355(b)(3), as amended by section 202 of the Tax Increase 
     Prevention and Reconciliation Act of 2005, are each amended 
     by striking ``and on or before December 31, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 202 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 241. REVISION OF STATE VETERANS LIMIT MADE PERMANENT.

       (a) In General.--Subparagraph (B) of section 143(l)(3), as 
     amended by section 203 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking clause 
     (iv).
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 203 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 242. CAPITAL GAINS TREATMENT FOR CERTAIN SELF-CREATED 
                   MUSICAL WORKS MADE PERMANENT.

       (a) In General.--Paragraph (3) of section 1221(b), as 
     amended by section 204 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking ``before 
     January 1, 2011,''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 204 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 243. REDUCTION IN MINIMUM VESSEL TONNAGE WHICH QUALIFIES 
                   FOR TONNAGE TAX MADE PERMANENT.

       (a) In General.--Paragraph (4) of section 1355(a), as 
     amended by section 205 of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking ``10,000 
     (6,000, in the case of taxable years beginning after December 
     31, 2005, and ending before January 1, 2011)'' and inserting 
     ``6,000''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 205 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 244. MODIFICATION OF SPECIAL ARBITRAGE RULE FOR CERTAIN 
                   FUNDS MADE PERMANENT.

       (a) In General.--Section 206 of the Tax Increase Prevention 
     and Reconciliation Act of 2005 is amended by striking ``and 
     before August 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 206 of the Tax 
     Increase Prevention and Reconciliation Act of 2005.

     SEC. 245. GREAT LAKES DOMESTIC SHIPPING TO NOT DISQUALIFY 
                   VESSEL FROM TONNAGE TAX.

       (a) In General.--Section 1355 (relating to definitions and 
     special rules) is amended by redesignating subsection (g) as 
     subsection (h) and by inserting after subsection (f) the 
     following new subsection:
       ``(g) Great Lakes Domestic Shipping to Not Disqualify 
     Vessel.--
       ``(1) In general.--If the electing corporation elects (at 
     such time and in such manner as the Secretary may require) to 
     apply this subsection for any taxable year to any qualifying 
     vessel which is used in qualified zone domestic trade during 
     the taxable year--
       ``(A) solely for purposes of subsection (a)(4), such use 
     shall be treated as use in United States foreign trade (and 
     not as use in United States domestic trade), and
       ``(B) subsection (f) shall not apply with respect to such 
     vessel for such taxable year.
       ``(2) Effect of temporarily operating vessel in united 
     states domestic trade.--In the case of a qualifying vessel to 
     which this subsection applies--
       ``(A) In general.--An electing corporation shall be treated 
     as using such vessel in qualified zone domestic trade during 
     any period of temporary use in the United States domestic 
     trade (other than qualified zone domestic trade) if the 
     electing corporation gives timely notice to the Secretary 
     stating--
       ``(i) that it temporarily operates or has operated in the 
     United States domestic trade (other than qualified zone 
     domestic trade) a qualifying vessel which had been used in 
     the United States foreign trade or qualified zone domestic 
     trade, and
       ``(ii) its intention to resume operation of the vessel in 
     the United States foreign trade or qualified zone domestic 
     trade.

[[Page 16492]]

       ``(B) Notice.--Notice shall be deemed timely if given not 
     later than the due date (including extensions) for the 
     corporation's tax return for the taxable year in which the 
     temporary cessation begins.
       ``(C) Period disregard in effect.--The period of temporary 
     use under subparagraph (A) continues until the earlier of the 
     date of which--
       ``(i) the electing corporation abandons its intention to 
     resume operations of the vessel in the United States foreign 
     trade or qualified zone domestic trade, or
       ``(ii) the electing corporation resumes operation of the 
     vessel in the United States foreign trade or qualified zone 
     domestic trade.
       ``(D) No disregard if domestic trade use exceeds 30 days.--
     Subparagraph (A) shall not apply to any qualifying vessel 
     which is operated in the United States domestic trade (other 
     than qualified zone domestic trade) for more than 30 days 
     during the taxable year.
       ``(3) Allocation of income and deductions to qualifying 
     shipping activities.--In the case of a qualifying vessel to 
     which this subsection applies, the Secretary shall prescribe 
     rules for the proper allocation of income, expenses, losses, 
     and deductions between the qualified shipping activities and 
     the other activities of such vessel.
       ``(4) Qualified zone domestic trade.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified zone domestic trade' 
     means the transportation of goods or passengers between 
     places in the qualified zone if such transportation is in the 
     United States domestic trade.
       ``(B) Qualified zone.--The term `qualified zone' means the 
     Great Lakes Waterway and the St. Lawrence Seaway.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 246. USE OF QUALIFIED MORTGAGE BONDS TO FINANCE 
                   RESIDENCES FOR VETERANS WITHOUT REGARD TO 
                   FIRST-TIME HOMEBUYER REQUIREMENT.

       (a) In General.--Section 143(d)(2) (relating to exceptions 
     to 3-year requirement) is amended by striking ``and'' at the 
     end of subparagraph (B), by adding ``and'' at the end of 
     subparagraph (C), and by inserting after subparagraph (C) the 
     following new subparagraph:
       ``(D) in the case of bonds issued after the date of the 
     enactment of this subparagraph and before January 1, 2008, 
     financing of any residence for a veteran (as defined in 
     section 101 of title 38, United States Code), if such veteran 
     has not previously qualified for and received such financing 
     by reason of this subparagraph,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 247. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL 
                   RESIDENCE BY CERTAIN EMPLOYEES OF THE 
                   INTELLIGENCE COMMUNITY.

       (a) In General.--Subparagraph (A) of section 121(d)(9) 
     (relating to exclusion of gain from sale of principal 
     residence) is amended by striking ``duty'' and all that 
     follows and inserting ``duty--
       ``(i) as a member of the uniformed services,
       ``(ii) as a member of the Foreign Service of the United 
     States, or
       ``(iii) as an employee of the intelligence community.''.
       (b) Employee of Intelligence Community Defined.--
     Subparagraph (C) of section 121(d)(9) is amended by 
     redesignating clause (iv) as clause (v) and by inserting 
     after clause (iii) the following new clause:
       ``(iv) Employee of intelligence community.--The term 
     `employee of the intelligence community' means an employee 
     (as defined by section 2105 of title 5, United States Code) 
     of--

       ``(I) the Office of the Director of National Intelligence,
       ``(II) the Central Intelligence Agency,
       ``(III) the National Security Agency,
       ``(IV) the Defense Intelligence Agency,
       ``(V) the National Geospatial-Intelligence Agency,
       ``(VI) the National Reconnaissance Office,
       ``(VII) any other office within the Department of Defense 
     for the collection of specialized national intelligence 
     through reconnaissance programs,
       ``(VIII) any of the intelligence elements of the Army, the 
     Navy, the Air Force, the Marine Corps, the Federal Bureau of 
     Investigation, the Department of Treasury, the Department of 
     Energy, and the Coast Guard,
       ``(IX) the Bureau of Intelligence and Research of the 
     Department of State, or
       ``(X) any of the elements of the Department of Homeland 
     Security concerned with the analyses of foreign intelligence 
     information.''.

       (c) Special Rule.--Subparagraph (C) of section 121(d)(9), 
     as amended by subsection (b), is amended by adding at the end 
     the following new clause:
       ``(vi) Special rule relating to intelligence community.--An 
     employee of the intelligence community shall not be treated 
     as serving on qualified extended duty unless such duty is at 
     a duty station located outside the United States.''.
       (d) Conforming Amendment.--The heading for section 
     121(d)(9) is amended to read as follows: ``Uniformed 
     services, foreign service, and intelligence community''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to sales or exchanges after the date of the 
     enactment of this Act and before January 1, 2011.

     SEC. 248. TREATMENT OF COKE AND COKE GAS.

       (a) Nonapplication of Phaseout.--Section 45K(g)(2) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Nonapplication of phaseout.--Subsection (b)(1) shall 
     not apply.''.
       (b) Clarification of Qualifying Facility.--Section 
     45K(g)(1) is amended by inserting ``(other than from 
     petroleum based products)'' after ``coke or coke gas''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 1321 of the 
     Energy Policy Act of 2005.

     SEC. 249. SALE OF PROPERTY BY JUDICIAL OFFICERS.

       (a) In General.--Section 1043(b) (relating to the sale of 
     property to comply with conflict-of-interest requirements) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by inserting ``, or a judicial 
     officer,'' after ``an officer or employee of the executive 
     branch''; and
       (B) in subparagraph (B), by inserting ``judicial canon,'' 
     after ``any statute, regulation, rule,'';
       (2) in paragraph (2)--
       (A) in subparagraph (A), by inserting ``judicial canon,'' 
     after ``any Federal conflict of interest statute, regulation, 
     rule,''; and
       (B) in subparagraph (B), by inserting after ``the Director 
     of the Office of Government Ethics,'' the following: ``in the 
     case of executive branch officers or employees, or by the 
     Judicial Conference of the United States (or its designee), 
     in the case of judicial officers,''; and
       (3) in paragraph (5)(B), by inserting ``judicial canon,'' 
     after ``any statute, regulation, rule,''.
       (b) Judicial Officer Defined.--Section 1043(b) is amended 
     by adding at the end the following new paragraph:
       ``(6) Judicial officer.--The term `judicial officer' means 
     the Chief Justice of the United States, the Associate 
     Justices of the Supreme Court, and the judges of the United 
     States courts of appeals, United States district courts, 
     including the district courts in Guam, the Northern Mariana 
     Islands, and the Virgin Islands, Court of Appeals for the 
     Federal Circuit, Court of International Trade, Tax Court, 
     Court of Federal Claims, Court of Appeals for Veterans 
     Claims, United States Court of Appeals for the Armed Forces, 
     and any court created by Act of Congress, the judges of which 
     are entitled to hold office during good behavior.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales after the date of enactment of this Act.

     SEC. 250. PREMIUMS FOR MORTGAGE INSURANCE.

       (a) In General.--Section 163(h)(3) (relating to qualified 
     residence interest) is amended by adding at the end the 
     following new subparagraph:
       ``(E) Mortgage insurance premiums treated as interest.--
       ``(i) In general.--Premiums paid or accrued for qualified 
     mortgage insurance by a taxpayer during the taxable year in 
     connection with acquisition indebtedness with respect to a 
     qualified residence of the taxpayer shall be treated for 
     purposes of this section as interest which is qualified 
     residence interest.
       ``(ii) Phaseout.--The amount otherwise treated as interest 
     under clause (i) shall be reduced (but not below zero) by 10 
     percent of such amount for each $1,000 ($500 in the case of a 
     married individual filing a separate return) (or fraction 
     thereof) that the taxpayer's adjusted gross income for the 
     taxable year exceeds $100,000 ($50,000 in the case of a 
     married individual filing a separate return).
       ``(iii) Limitation.--Clause (i) shall not apply with 
     respect to any mortgage insurance contracts issued before 
     January 1, 2007.
       ``(iv) Termination.--Clause (i) shall not apply to 
     amounts--

       ``(I) paid or accrued after December 31, 2007, or
       ``(II) properly allocable to any period after such date.''.

       (b) Definition and Special Rules.--Section 163(h)(4) 
     (relating to other definitions and special rules) is amended 
     by adding at the end the following new subparagraphs:
       ``(E) Qualified mortgage insurance.--The term `qualified 
     mortgage insurance' means--
       ``(i) mortgage insurance provided by the Veterans 
     Administration, the Federal Housing Administration, or the 
     Rural Housing Administration, and
       ``(ii) private mortgage insurance (as defined by section 2 
     of the Homeowners Protection Act of 1998 (12 U.S.C. 4901), as 
     in effect on the date of the enactment of this subparagraph).
       ``(F) Special rules for prepaid qualified mortgage 
     insurance.--Any amount paid by the taxpayer for qualified 
     mortgage insurance that is properly allocable to any mortgage 
     the payment of which extends to periods that are after the 
     close of the taxable year in which such amount is paid shall 
     be chargeable to capital account and shall be treated as paid 
     in such periods to which so

[[Page 16493]]

     allocated. No deduction shall be allowed for the unamortized 
     balance of such account if such mortgage is satisfied before 
     the end of its term. The preceding sentences shall not apply 
     to amounts paid for qualified mortgage insurance provided by 
     the Veterans Administration or the Rural Housing 
     Administration.''.
       (c) Information Returns Relating to Mortgage Insurance.--
     Section 6050H (relating to returns relating to mortgage 
     interest received in trade or business from individuals) is 
     amended by adding at the end the following new subsection:
       ``(h) Returns Relating to Mortgage Insurance Premiums.--
       ``(1) In general.--The Secretary may prescribe, by 
     regulations, that any person who, in the course of a trade or 
     business, receives from any individual premiums for mortgage 
     insurance aggregating $600 or more for any calendar year, 
     shall make a return with respect to each such individual. 
     Such return shall be in such form, shall be made at such 
     time, and shall contain such information as the Secretary may 
     prescribe.
       ``(2) Statement to be furnished to individuals with respect 
     to whom information is required.--Every person required to 
     make a return under paragraph (1) shall furnish to each 
     individual with respect to whom a return is made a written 
     statement showing such information as the Secretary may 
     prescribe. Such written statement shall be furnished on or 
     before January 31 of the year following the calendar year for 
     which the return under paragraph (1) was required to be made.
       ``(3) Special rules.--For purposes of this subsection--
       ``(A) rules similar to the rules of subsection (c) shall 
     apply, and
       ``(B) the term `mortgage insurance' means--
       ``(i) mortgage insurance provided by the Veterans 
     Administration, the Federal Housing Administration, or the 
     Rural Housing Administration, and
       ``(ii) private mortgage insurance (as defined by section 2 
     of the Homeowners Protection Act of 1998 (12 U.S.C. 4901), as 
     in effect on the date of the enactment of this 
     subsection).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or accrued after December 31, 
     2006.

     SEC. 251. MODIFICATION OF REFUNDS FOR KEROSENE USED IN 
                   AVIATION.

       (a) In General.--Paragraph (4) of section 6427(l) (relating 
     to nontaxable uses of diesel fuel and kerosene) is amended to 
     read as follows:
       ``(4) Refunds for kerosene used in aviation.--
       ``(A) Kerosene used in commercial aviation.--In the case of 
     kerosene used in commercial aviation (as defined in section 
     4083(b)) (other than supplies for vessels or aircraft within 
     the meaning of section 4221(d)(3)), paragraph (1) shall not 
     apply to so much of the tax imposed by section 4041 or 4081, 
     as the case may be, as is attributable to--
       ``(i) the Leaking Underground Storage Tank Trust Fund 
     financing rate imposed by such section, and
       ``(ii) so much of the rate of tax specified in section 
     4041(c) or 4081(a)(2)(A)(iii), as the case may be, as does 
     not exceed 4.3 cents per gallon.
       ``(B) Kerosene used in noncommercial aviation.--In the case 
     of kerosene used in aviation that is not commercial aviation 
     (as so defined) (other than any use which is exempt from the 
     tax imposed by section 4041(c) other than by reason of a 
     prior imposition of tax), paragraph (1) shall not apply to--
       ``(i) any tax imposed by section 4041(c), and
       ``(ii) so much of the tax imposed by section 4081 as is 
     attributable to--

       ``(I) the Leaking Underground Storage Tank Trust Fund 
     financing rate imposed by such section, and
       ``(II) so much of the rate of tax specified in section 
     4081(a)(2)(A)(iii) as does not exceed the rate specified in 
     section 4081(a)(2)(C)(ii).

       ``(C) Payments to ultimate, registered vendor.--
       ``(i) In general.--With respect to any kerosene used in 
     aviation (other than kerosene described in clause (ii) or 
     kerosene to which paragraph (5) applies), if the ultimate 
     purchaser of such kerosene waives (at such time and in such 
     form and manner as the Secretary shall prescribe) the right 
     to payment under paragraph (1) and assigns such right to the 
     ultimate vendor, then the Secretary shall pay the amount 
     which would be paid under paragraph (1) to such ultimate 
     vendor, but only if such ultimate vendor--

       ``(I) is registered under section 4101, and
       ``(II) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).

       ``(ii) Payments for kerosene used in noncommercial 
     aviation.--The amount which would be paid under paragraph (1) 
     with respect to any kerosene to which subparagraph (B) 
     applies shall be paid only to the ultimate vendor of such 
     kerosene. A payment shall be made to such vendor if such 
     vendor--

       ``(I) is registered under section 4101, and
       ``(II) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).''.

       (b) Conforming Amendments.--
       (1) Section 6427(l) is amended by striking paragraph (5) 
     and by redesignating paragraph (6) as paragraph (5).
       (2) Section 4082(d)(2)(B) is amended by striking ``section 
     6427(l)(6)(B)'' and inserting ``section 6427(l)(5)(B)''.
       (3) Section 6427(i)(4)(A) is amended--
       (A) by striking ``paragraph (4)(B), (5), or (6)'' each 
     place it appears and inserting ``paragraph (4)(C) or (5)'', 
     and
       (B) by striking ``(l)(5), and (l)(6)'' and inserting 
     ``(l)(4)(C)(ii), and (l)(5)''.
       (4) Section 6427(l)(1) is amended by striking ``paragraph 
     (4)(B)'' and inserting ``paragraph (4)(C)(i)''.
       (5) Section 9502(d) is amended--
       (A) in paragraph (2), by striking ``and (l)(5)'', and
       (B) in paragraph (3), by striking ``or (5)''.
       (6) Section 9503(c)(7) is amended--
       (A) by amending subparagraphs (A) and (B) to read as 
     follows:
       ``(A) 4.3 cents per gallon of kerosene subject to section 
     6427(l)(4)(A) with respect to which a payment has been made 
     by the Secretary under section 6427(l), and
       ``(B) 21.8 cents per gallon of kerosene subject to section 
     6427(l)(4)(B) with respect to which a payment has been made 
     by the Secretary under section 6427(l).'', and
       (B) in the matter following subparagraph (B), by striking 
     ``or (5)''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to kerosene sold after September 30, 2005.
       (2) Special rule for pending claims.--In the case of 
     kerosene sold for use in aviation (other than kerosene to 
     which section 6427(l)(4)(C)(ii) of the Internal Revenue Code 
     of 1986 (as added by subsection (a)) applies or kerosene to 
     which section 6427(l)(5) of such Code (as redesignated by 
     subsection (b)) applies) after September 30, 2005, and before 
     the date of the enactment of this Act, the ultimate purchaser 
     shall be treated as having waived the right to payment under 
     section 6427(l)(1) of such Code and as having assigned such 
     right to the ultimate vendor if such ultimate vendor has met 
     the requirements of subparagraph (A), (B), or (D) of section 
     6416(a)(1) of such Code.
       (d) Special Rule for Kerosene Used in Aviation on a Farm 
     for Farming Purposes.--
       (1) Refunds for purchases after december 31, 2004, and 
     before october 1, 2005.--The Secretary of the Treasury shall 
     pay to the ultimate purchaser of any kerosene which is used 
     in aviation on a farm for farming purposes and which was 
     purchased after December 31, 2004, and before October 1, 
     2005, an amount equal to the aggregate amount of tax imposed 
     on such fuel under section 4041 or 4081 of the Internal 
     Revenue Code of 1986, as the case may be, reduced by any 
     payment to the ultimate vendor under section 6427(l)(5)(C) of 
     such Code (as in effect on the day before the date of the 
     enactment of the Safe, Accountable, Flexible, Efficient 
     Transportation Equity Act: a Legacy for Users).
       (2) Use on a farm for farming purposes.--For purposes of 
     paragraph (1), kerosene shall be treated as used on a farm 
     for farming purposes if such kerosene is used for farming 
     purposes (within the meaning of section 6420(c)(3) of the 
     Internal Revenue Code of 1986) in carrying on a trade or 
     business on a farm situated in the United States. For 
     purposes of the preceding sentence, rules similar to the 
     rules of section 6420(c)(4) of such Code shall apply.
       (3) Time for filing claims.--No claim shall be allowed 
     under paragraph (1) unless the ultimate purchaser files such 
     claim before the date that is 3 months after the date of the 
     enactment of this Act.
       (4) No double benefit.--No amount shall be paid under 
     paragraph (1) or section 6427(l) of the Internal Revenue Code 
     of 1986 with respect to any kerosene described in paragraph 
     (1) to the extent that such amount is in excess of the tax 
     imposed on such kerosene under section 4041 or 4081 of such 
     Code, as the case may be.
       (5) Applicable laws.--For purposes of this subsection, 
     rules similar to the rules of section 6427(j) of the Internal 
     Revenue Code of 1986 shall apply.

     SEC. 252. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       (a) In General.--Part I of subchapter P of chapter 1 is 
     amended by adding at the end the following new section:

     ``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       ``(a) In General.--In the case of a taxpayer which elects 
     the application of this section for a taxable year, there 
     shall be allowed a deduction against gross income equal to 60 
     percent of the lesser of--
       ``(1) the taxpayer's qualified timber gain for such year, 
     or
       ``(2) the taxpayer's net capital gain for such year.
       ``(b) Qualified Timber Gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(1) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(2) the sum of the taxpayer's losses described in such 
     subsections for such year.
       ``(c) Special Rules for Pass-Thru Entities.--In the case of 
     any qualified timber gain of a pass-thru entity (as defined 
     in section 1(h)(10))--

[[Page 16494]]

       ``(1) the election under this section shall be made 
     separately by each taxpayer subject to tax on such gain, and
       ``(2) the Secretary may prescribe such regulations as are 
     appropriate to apply this section to such gain.
       ``(d) Termination.--No disposition of timber after December 
     31, 2007, shall be taken into account under subsection 
     (b).''.
       (b) Coordination With Maximum Capital Gains Rates.--
       (1) Taxpayers other than corporations.--Paragraph (2) of 
     section 1(h) is amended to read as follows:
       ``(2) Reduction of net capital gain.--For purposes of this 
     subsection, the net capital gain for any taxable year shall 
     be reduced (but not below zero) by the sum of--
       ``(A) the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii), and
       ``(B) in the case of a taxable year with respect to which 
     an election is in effect under section 1203, the lesser of--
       ``(i) the amount described in paragraph (1) of section 
     1203(a), or
       ``(ii) the amount described in paragraph (2) of such 
     section.''.
       (2) Corporations.--Section 1201 is amended by redesignating 
     subsection (b) as subsection (c) and inserting after 
     subsection (a) the following new subsection:
       ``(b) Qualified Timber Gain Not Taken Into Account.--For 
     purposes of this section, in the case of a corporation with 
     respect to which an election is in effect under section 1203, 
     the net capital gain for any taxable year shall be reduced 
     (but not below zero) by the corporation's qualified timber 
     gain (as defined in section 1203(b)).''.
       (c) Deduction Allowed Whether or Not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62, as amended 
     by this Act, is amended by inserting before the last sentence 
     the following new paragraph:
       ``(22) Qualified timber gains.--The deduction allowed by 
     section 1203.''.
       (d) Deduction Allowed in Computing Adjusted Current 
     Earnings.--Subparagraph (C) of section 56(g)(4) is amended by 
     adding at the end the following new clause:
       ``(vii) Deduction for qualified timber gain.--Clause (i) 
     shall not apply to any deduction allowed under section 
     1203.''.
       (e) Deduction Allowed in Computing Taxable Income of 
     Electing Small Business Trusts.--Subparagraph (C) of section 
     641(c)(2) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) The deduction allowed under section 1203.''.
       (f) Conforming Amendments.--
       (1) Subparagraph (B) of section 172(d)(2) is amended to 
     read as follows:
       ``(B) the exclusion under section 1202 and the deduction 
     under section 1203 shall not be allowed.''.
       (2) Paragraph (4) of section 642(c) is amended by striking 
     the first sentence and inserting the following: ``To the 
     extent that the amount otherwise allowable as a deduction 
     under this subsection consists of gain described in section 
     1202(a) or qualified timber gain (as defined in section 
     1203(b)), proper adjustment shall be made for any exclusion 
     allowable to the estate or trust under section 1202 and for 
     any deduction allowable to the estate or trust under section 
     1203.''.
       (3) Paragraph (3) of section 643(a) is amended by striking 
     the last sentence and inserting the following: ``The 
     exclusion under section 1202 and the deduction under section 
     1203 shall not be taken into account.''.
       (4) Subparagraph (C) of section 643(a)(6) is amended to 
     read as follows:
       ``(C) Paragraph (3) shall not apply to a foreign trust. In 
     the case of such a trust--
       ``(i) there shall be included gains from the sale or 
     exchange of capital assets, reduced by losses from such sales 
     or exchanges to the extent such losses do not exceed gains 
     from such sales or exchanges, and
       ``(ii) the deduction under section 1203 shall not be taken 
     into account.''.
       (5) Paragraph (4) of section 691(c) is amended by inserting 
     ``1203,'' after ``1202,''.
       (6) Paragraph (2) of section 871(a) is amended by striking 
     ``section 1202'' and inserting ``sections 1202 and 1203''.
       (7) The table of sections for part I of subchapter P of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Sec. 1203. Deduction for qualified timber gain.''.

       (g) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Taxable years which include date of enactment.--In the 
     case of any taxable year which includes the date of the 
     enactment of this Act, for purposes of the Internal Revenue 
     Code of 1986, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in section 1203(b) 
     of such Code, as added by this section, if only dispositions 
     of timber after such date were taken into account.

     SEC. 253. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       (a) In General.--Subpart H of part IV of subchapter A of 
     chapter 1 (relating to credits against tax) is amended by 
     adding at the end the following new section:

     ``SEC. 54A. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a rural renaissance bond on a credit allowance date of 
     such bond, which occurs during the taxable year, there shall 
     be allowed as a credit against the tax imposed by this 
     chapter for such taxable year an amount equal to the sum of 
     the credits determined under subsection (b) with respect to 
     credit allowance dates during such year on which the taxpayer 
     holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a rural renaissance bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any rural renaissance bond is the product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any rural renaissance bond, the Secretary shall 
     determine daily or caused to be determined daily a credit 
     rate which shall apply to the first day on which there is a 
     binding, written contract for the sale or exchange of the 
     bond. The credit rate for any day is the credit rate which 
     the Secretary or the Secretary's designee estimates will 
     permit the issuance of rural renaissance bonds with a 
     specified maturity or redemption date without discount and 
     without interest cost to the qualified issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term also includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than subpart C and this section).
       ``(d) Rural Renaissance Bond.--For purposes of this 
     section--
       ``(1) In general.--The term `rural renaissance bond' means 
     any bond issued as part of an issue if--
       ``(A) the bond is issued by a qualified issuer,
       ``(B) 95 percent or more of the proceeds from the sale of 
     such issue are to be used for capital expenditures incurred 
     for 1 or more qualified projects,
       ``(C) the qualified issuer designates such bond for 
     purposes of this section and the bond is in registered form, 
     and
       ``(D) the issue meets the requirements of subsections (e) 
     and (h).
       ``(2) Qualified project; special use rules.--
       ``(A) In general.--The term `qualified project' means 1 or 
     more projects described in subparagraph (B) located in a 
     rural area.
       ``(B) Projects described.--A project described in this 
     subparagraph is--
       ``(i) a water or waste treatment project,
       ``(ii) an affordable housing project,
       ``(iii) a community facility project, including hospitals, 
     fire and police stations, and nursing and assisted-living 
     facilities,
       ``(iv) a value-added agriculture or renewable energy 
     facility project for agricultural producers or farmer-owned 
     entities, including any project to promote the production, 
     processing, or retail sale of ethanol (including fuel at 
     least 85 percent of the volume of which consists of ethanol), 
     biodiesel, animal waste, biomass, raw commodities, or wind as 
     a fuel,
       ``(v) a distance learning or telemedicine project,
       ``(vi) a rural utility infrastructure project, including 
     any electric or telephone system,
       ``(vii) a project to expand broadband technology,
       ``(viii) a rural teleworks project, and
       ``(ix) any project described in any preceding clause 
     carried out by the Delta Regional Authority.
       ``(C) Special rules.--For purposes of this paragraph--
       ``(i) any project described in subparagraph (B)(iv) for a 
     farmer-owned entity may be considered a qualified project if 
     such entity is located in a rural area, or in the case of a 
     farmer-owned entity the headquarters of which are located in 
     a nonrural area, if the project is located in a rural area, 
     and
       ``(ii) any project for a farmer-owned entity which is a 
     facility described in subparagraph

[[Page 16495]]

     (B)(iv) for agricultural producers may be considered a 
     qualified project regardless of whether the facility is 
     located in a rural or nonrural area.
       ``(3) Special use rules.--
       ``(A) Refinancing rules.--For purposes of paragraph (1)(B), 
     a qualified project may be refinanced with proceeds of a 
     rural renaissance bond only if the indebtedness being 
     refinanced (including any obligation directly or indirectly 
     refinanced by such indebtedness) was originally incurred 
     after the date of the enactment of this section.
       ``(B) Reimbursement.--For purposes of paragraph (1)(B), a 
     rural renaissance bond may be issued to reimburse a borrower 
     for amounts paid after the date of the enactment of this 
     section with respect to a qualified project, but only if--
       ``(i) prior to the payment of the original expenditure, the 
     borrower declared its intent to reimburse such expenditure 
     with the proceeds of a rural renaissance bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the qualified issuer adopts an official intent 
     to reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(C) Treatment of changes in use.--For purposes of 
     paragraph (1)(B), the proceeds of an issue shall not be 
     treated as used for a qualified project to the extent that a 
     borrower takes any action within its control which causes 
     such proceeds not to be used for a qualified project. The 
     Secretary shall prescribe regulations specifying remedial 
     actions that may be taken (including conditions to taking 
     such remedial actions) to prevent an action described in the 
     preceding sentence from causing a bond to fail to be a rural 
     renaissance bond.
       ``(e) Maturity Limitations.--
       ``(1) Duration of term.--A bond shall not be treated as a 
     rural renaissance bond if the maturity of such bond exceeds 
     the maximum term determined by the Secretary under paragraph 
     (2) with respect to such bond.
       ``(2) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined without regard to the requirements 
     of paragraph (3) and using as a discount rate the average 
     annual interest rate of tax-exempt obligations having a term 
     of 10 years or more which are issued during the month. If the 
     term as so determined is not a multiple of a whole year, such 
     term shall be rounded to the next highest whole year.
       ``(3) Ratable principal amortization required.--A bond 
     shall not be treated as a rural renaissance bond unless it is 
     part of an issue which provides for an equal amount of 
     principal to be paid by the qualified issuer during each 
     calendar year that the issue is outstanding.
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a rural renaissance 
     bond limitation of $200,000,000.
       ``(2) Allocation by secretary.--The Secretary shall 
     allocate the amount described in paragraph (1) among 
     qualified projects in such manner as the Secretary determines 
     appropriate.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(h) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the qualified issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds from the sale of 
     the issue are to be spent for 1 or more qualified projects 
     within the 5-year period beginning on the date of issuance of 
     the rural renaissance bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds from the sale of the issue 
     will be incurred within the 6-month period beginning on the 
     date of issuance of the rural renaissance bond or, in the 
     case of a rural renaissance bond, the proceeds of which are 
     to be loaned to 2 or more borrowers, such binding commitment 
     will be incurred within the 6-month period beginning on the 
     date of the loan of such proceeds to a borrower, and
       ``(C) such projects will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the qualified 
     issuer establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     projects will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the qualified issuer shall redeem 
     all of the nonqualified bonds within 90 days after the end of 
     such period. For purposes of this paragraph, the amount of 
     the nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(i) Special Rules Relating to Arbitrage.--A bond which is 
     part of an issue shall not be treated as a rural renaissance 
     bond unless, with respect to the issue of which the bond is a 
     part, the qualified issuer satisfies the arbitrage 
     requirements of section 148 with respect to proceeds of the 
     issue.
       ``(j) Qualified Issuer.--For purposes of this section--
       ``(1) In general.--The term `qualified issuer' means any 
     not-for-profit cooperative lender which has as of the date of 
     the enactment of this section received a guarantee under 
     section 306 of the Rural Electrification Act and which meets 
     the requirement of paragraph (2).
       ``(2) User fee requirement.--The requirement of this 
     paragraph is met if the issuer of any rural renaissance bond 
     makes grants for qualified projects as defined under 
     subsection (d)(2) on a semi-annual basis every year that such 
     bond is outstanding in an annual amount equal to one-half of 
     the rate on United States Treasury Bills of the same maturity 
     multiplied by the outstanding principal balance of rural 
     renaissance bonds issued by such issuer.
       ``(k) Special Rules Relating to Pool Bonds.--No portion of 
     a pooled financing bond may be allocable to a loan unless the 
     borrower has entered into a written loan commitment for such 
     portion prior to the issue date of such issue.
       ``(l) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Pooled financing bond.--The term `pooled financing 
     bond' shall have the meaning given such term by section 
     149(f)(4)(A).
       ``(3) Rural area.--The term `rural area' means any area 
     other than--
       ``(A) a city or town which has a population of greater than 
     50,000 inhabitants, or
       ``(B) the urbanized area contiguous and adjacent to such a 
     city or town.
       ``(4) Partnership; s corporation; and other pass-thru 
     entities.--
       ``(A) In general.--Under regulations prescribed by the 
     Secretary, in the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under subsection (a).
       ``(B) No basis adjustment.--In the case of a bond held by a 
     partnership or an S corporation, rules similar to the rules 
     under section 1397E(l) shall apply.
       ``(5) Bonds held by regulated investment companies.--If any 
     rural renaissance bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(6) Reporting.--Issuers of rural renaissance bonds shall 
     submit reports similar to the reports required under section 
     149(e).''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on rural renaissance bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A(f) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54A(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) The table of sections for subpart H of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

    ``Sec. 54A. Credit to holders of rural renaissance bonds.''

     .  (2) Section 54(c)(2) is amended by inserting ``, section 
     54A,'' after ``subpart C''.
       (3) Section 1400N(l)(3)(B) is amended by inserting ``, 
     section 54A,'' after ``subpart C''.
       (d) Issuance of Regulations.--The Secretary of Treasury 
     shall issue regulations required under section 54A of the 
     Internal Revenue Code of 1986 (as added by this section) not 
     later than 120 days after the date of the enactment of this 
     Act.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act and before January 1, 2010.

[[Page 16496]]



     SEC. 254. RESTORATION OF DEDUCTION FOR TRAVEL EXPENSES OF 
                   SPOUSE, ETC. ACCOMPANYING TAXPAYER ON BUSINESS 
                   TRAVEL.

       (a) In General.--Subsection (m) of section 274 (relating to 
     additional limitations on travel expenses) is amended by 
     adding at the end the following new paragraph:
       ``(4) Termination.--Paragraph (3) shall not apply to any 
     expense paid or incurred after the date of the enactment of 
     this paragraph and before January 1, 2008.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

     SEC. 255. TECHNICAL CORRECTIONS.

       (a) Technical Correction Relating to Look-Through Treatment 
     of Payments Between Related Controlled Foreign Corporations 
     Under the Foreign Personal Holding Company Rules.--
       (1) In general.--
       (A) The first sentence of section 954(c)(6)(A), as amended 
     by section 103(b) of the Tax Increase Prevention and 
     Reconciliation Act of 2005, is amended by striking ``which is 
     not subpart F income'' and inserting ``which is neither 
     subpart F income nor income treated as effectively connected 
     with the conduct of a trade or business in the United 
     States''.
       (B) Section 954(c)(6)(A), as so amended, is amended by 
     striking the last sentence and inserting the following: ``The 
     Secretary shall prescribe such regulations as may be 
     necessary or appropriate to carry out this paragraph, 
     including such regulations as may be necessary or appropriate 
     to prevent the abuse of the purposes of this paragraph.''
       (2) Effective date.--The amendments made by this subsection 
     shall take effect as if included in section 103(b) of the Tax 
     Increase Prevention and Reconciliation Act of 2005.
       (b) Technical Correction Regarding Authority to Exercise 
     Reasonable Cause and Good Faith Exception.--
       (1) In general.--Section 903(d)(2)(B)(iii) of the American 
     Jobs Creation Act of 2004, as amended by section 303(a) of 
     the Gulf Opportunity Zone Act of 2005, is amended by 
     inserting ``or the Secretary's delegate'' after ``the 
     Secretary of the Treasury''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.

  TITLE III--SURFACE MINING CONTROL AND RECLAMATION ACT AMENDMENTS OF 
                                  2006

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Surface Mining Control and 
     Reclamation Act Amendments of 2006''.

               Subtitle A--MINING CONTROL AND RECLAMATION

     SEC. 311. ABANDONED MINE RECLAMATION FUND AND PURPOSES.

       (a) In General.--Section 401 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1231) is amended--
       (1) in subsection (c)--
       (A) by striking paragraphs (2) and (6); and
       (B) by redesignating paragraphs (3), (4), and (5) and 
     paragraphs (7) through (13) as paragraphs (2) through (11), 
     respectively;
       (2) by striking subsection (d) and inserting the following:
       ``(d) Availability of Moneys; No Fiscal Year Limitation.--
       ``(1) In general.--Moneys from the fund for expenditures 
     under subparagraphs (A) through (D) of section 402(g)(3) 
     shall be available only when appropriated for those 
     subparagraphs.
       ``(2) No fiscal year limitation.--Appropriations described 
     in paragraph (1) shall be made without fiscal year 
     limitation.
       ``(3) Other purposes.--Moneys from the fund shall be 
     available for all other purposes of this title without prior 
     appropriation as provided in subsection (f).'';
       (3) in subsection (e)--
       (A) in the second sentence, by striking ``the needs of such 
     fund'' and inserting ``achieving the purposes of the 
     transfers under section 402(h)''; and
       (B) in the third sentence, by inserting before the period 
     the following: ``for the purpose of the transfers under 
     section 402(h)''; and
       (4) by adding at the end the following:
       ``(f) General Limitation on Obligation Authority.--
       ``(1) In general.--From amounts deposited into the fund 
     under subsection (b), the Secretary shall distribute during 
     each fiscal year beginning after September 30, 2007, an 
     amount determined under paragraph (2).
       ``(2) Amounts.--
       ``(A) For fiscal years 2008 through 2022.--For each of 
     fiscal years 2008 through 2022, the amount distributed by the 
     Secretary under this subsection shall be equal to--
       ``(i) the amounts deposited into the fund under paragraphs 
     (1), (2), and (4) of subsection (b) for the preceding fiscal 
     year that were allocated under paragraphs (1) and (5) of 
     section 402(g); plus
       ``(ii) the amount needed for the adjustment under section 
     402(g)(8) for the current fiscal year.
       ``(B) Fiscal years 2023 and thereafter.--For fiscal year 
     2023 and each fiscal year thereafter, to the extent that 
     funds are available, the Secretary shall distribute an amount 
     equal to the amount distributed under subparagraph (A) during 
     fiscal year 2022.
       ``(3) Distribution.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for each fiscal year, of the amount to be distributed to 
     States and Indian tribes pursuant to paragraph (2), the 
     Secretary shall distribute--
       ``(i) the amounts allocated under paragraph (1) of section 
     402(g), the amounts allocated under paragraph (5) of section 
     402(g), and any amount reallocated under section 411(h)(3) in 
     accordance with section 411(h)(2), for grants to States and 
     Indian tribes under section 402(g)(5); and
       ``(ii) the amounts allocated under section 402(g)(8).
       ``(B) Exclusion.--Beginning on October 1, 2007, certified 
     States shall be ineligible to receive amounts under section 
     402(g)(1).
       ``(4) Availability.--Amounts in the fund available to the 
     Secretary for obligation under this subsection shall be 
     available until expended.
       ``(5) Addition.--
       ``(A) In general.--Subject to subparagraph (B), the amount 
     distributed under this subsection for each fiscal year shall 
     be in addition to the amount appropriated from the fund 
     during the fiscal year.
       ``(B) Exceptions.--Notwithstanding paragraph (3), the 
     amount distributed under this subsection for the first 4 
     fiscal years beginning on and after October 1, 2007, shall be 
     equal to the following percentage of the amount otherwise 
     required to be distributed:
       ``(i) 50 percent in fiscal year 2008.
       ``(ii) 50 percent in fiscal year 2009.
       ``(iii) 75 percent in fiscal year 2010.
       ``(iv) 75 percent in fiscal year 2011.''.
       (b) Conforming Amendment.--Section 712(b) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1302(b)) is amended by striking ``section 401(c)(11)'' and 
     inserting ``section 401(c)(9)''.

     SEC. 312. RECLAMATION FEE.

       (a) Amounts.--
       (1) Fiscal years 2008-2012.--Effective October 1, 2007, 
     section 402(a) of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1232(a)) is amended--
       (A) by striking ``35'' and inserting ``31.5'';
       (B) by striking ``15'' and inserting ``13.5''; and
       (C) by striking ``10 cents'' and inserting ``9 cents''.
       (2) Fiscal years 2013-2021.--Effective October 1, 2012, 
     section 402(a) of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1232(a)) (as amended by paragraph (1)) 
     is amended--
       (A) by striking ``31.5'' and inserting ``28'';
       (B) by striking ``13.5'' and inserting ``12''; and
       (C) by striking ``9 cents'' and inserting ``8 cents''.
       (b) Duration.--Effective September 30, 2007, section 402(b) 
     of the Surface Mining Control and Reclamation Act of 1977 (30 
     U.S.C. 1232(b)) (as amended by section 7007 of the Emergency 
     Supplemental Appropriations Act for Defense, the Global War 
     on Terror, and Hurricane Recovery, 2006 (Public Law 109-234; 
     120 Stat. 484)) is amended by striking ``September 30, 2007'' 
     and all that follows through the end of the sentence and 
     inserting ``September 30, 2021.''.
       (c) Allocation of Funds.--Section 402(g) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1232(g)) is amended--
       (1) in paragraph (1)(D)--
       (A) by inserting ``(except for grants awarded during fiscal 
     years 2008, 2009, and 2010 to the extent not expended within 
     5 years)'' after ``this paragraph''; and
       (B) by striking ``in any area under paragraph (2), (3), 
     (4), or (5)'' and inserting ``under paragraph (5)'';
       (2) by striking paragraph (2) and inserting:
       ``(2) In making the grants referred to in paragraph (1)(C) 
     and the grants referred to in paragraph (5), the Secretary 
     shall ensure strict compliance by the States and Indian 
     tribes with the priorities described in section 403(a) until 
     a certification is made under section 411(a).'';
       (3) in paragraph (3)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``paragraphs (2) and'' and inserting ``paragraph'';
       (B) in subparagraph (A), by striking ``401(c)(11)'' and 
     inserting ``401(c)(9)''; and
       (C) by adding at the end the following:
       ``(E) For the purpose of paragraph (8).'';
       (4) in paragraph (5)--
       (A) by inserting ``(A)'' after ``(5)'';
       (B) in the first sentence, by striking ``40'' and inserting 
     ``60'';
       (C) in the last sentence, by striking ``Funds allocated or 
     expended by the Secretary under paragraphs (2), (3), or (4)'' 
     and inserting ``Funds made available under paragraph (3) or 
     (4)''; and
       (D) by adding at the end the following:
       ``(B) Any amount that is reallocated and available under 
     section 411(h)(3) shall be in addition to amounts that are 
     allocated under subparagraph (A).''; and
       (5) by striking paragraphs (6) through (8) and inserting 
     the following:
       ``(6)(A) Any State with an approved abandoned mine 
     reclamation program pursuant

[[Page 16497]]

     to section 405 may receive and retain, without regard to the 
     3-year limitation referred to in paragraph (1)(D), up to 30 
     percent of the total of the grants made annually to the State 
     under paragraphs (1) and (5) if those amounts are deposited 
     into an acid mine drainage abatement and treatment fund 
     established under State law, from which amounts (together 
     with all interest earned on the amounts) are expended by the 
     State for the abatement of the causes and the treatment of 
     the effects of acid mine drainage in a comprehensive manner 
     within qualified hydrologic units affected by coal mining 
     practices.
       ``(B) In this paragraph, the term `qualified hydrologic 
     unit' means a hydrologic unit--
       ``(i) in which the water quality has been significantly 
     affected by acid mine drainage from coal mining practices in 
     a manner that adversely impacts biological resources; and
       ``(ii) that contains land and water that are--
       ``(I) eligible pursuant to section 404 and include any of 
     the priorities described in section 403(a); and
       ``(II) the subject of expenditures by the State from the 
     forfeiture of bonds required under section 509 or from other 
     States sources to abate and treat acid mine drainage.
       ``(7) In complying with the priorities described in section 
     403(a), any State or Indian tribe may use amounts available 
     in grants made annually to the State or tribe under 
     paragraphs (1) and (5) for the reclamation of eligible land 
     and water described in section 403(a)(3) before the 
     completion of reclamation projects under paragraphs (1) and 
     (2) of section 403(a) only if the expenditure of funds for 
     the reclamation is done in conjunction with the expenditure 
     before, on, or after the date of enactment of the Surface 
     Mining Control and Reclamation Act Amendments of 2006 of 
     funds for reclamation projects under paragraphs (1) and (2) 
     of section 403(a).
       ``(8)(A) In making funds available under this title, the 
     Secretary shall ensure that the grant awards total not less 
     than $3,000,000 annually to each State and each Indian tribe 
     having an approved abandoned mine reclamation program 
     pursuant to section 405 and eligible land and water pursuant 
     to section 404, so long as an allocation of funds to the 
     State or tribe is necessary to achieve the priorities stated 
     in paragraphs (1) and (2) of section 403(a).
       ``(B) Notwithstanding any other provision of law, this 
     paragraph applies to the States of Tennessee and Missouri.''.
       (d) Transfers of Interest Earned by Abandoned Mine 
     Reclamation Fund.--Section 402 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1232) is amended by 
     striking subsection (h) and inserting the following:
       ``(h) Transfers of Interest Earned by Fund.--
       ``(1) In general.--
       ``(A) Transfers to combined benefit fund.--As soon as 
     practicable after the beginning of fiscal year 2007 and each 
     fiscal year thereafter, and before making any allocation with 
     respect to the fiscal year under subsection (g), the 
     Secretary shall use an amount not to exceed the amount of 
     interest that the Secretary estimates will be earned and paid 
     to the fund during the fiscal year to make the transfer 
     described in paragraph (2)(A).
       ``(B) Transfers to 1992 and 1993 plans.--As soon as 
     practicable after the beginning of fiscal year 2008 and each 
     fiscal year thereafter, and before making any allocation with 
     respect to the fiscal year under subsection (g), the 
     Secretary shall use an amount not to exceed the amount of 
     interest that the Secretary estimates will be earned and paid 
     to the fund during the fiscal year (reduced by the amount 
     used under subparagraph (A)) to make the transfers described 
     in paragraphs (2)(B) and (2)(C).
       ``(2) Transfers described.--The transfers referred to in 
     paragraph (1) are the following:
       ``(A) United mine workers of america combined benefit 
     fund.--A transfer to the United Mine Workers of America 
     Combined Benefit Fund equal to the amount that the trustees 
     of the Combined Benefit Fund estimate will be expended from 
     the fund for the fiscal year in which the transfer is made, 
     reduced by--
       ``(i) the amount the trustees of the Combined Benefit Fund 
     estimate the Combined Benefit Fund will receive during the 
     fiscal year in--

       ``(I) required premiums; and
       ``(II) payments paid by Federal agencies in connection with 
     benefits provided by the Combined Benefit Fund; and

       ``(ii) the amount the trustees of the Combined Benefit Fund 
     estimate will be expended during the fiscal year to provide 
     health benefits to beneficiaries who are unassigned 
     beneficiaries solely as a result of the application of 
     section 9706(h)(1) of the Internal Revenue Code of 1986, but 
     only to the extent that such amount does not exceed the 
     amounts described in subsection (i)(1)(A) that the Secretary 
     estimates will be available to pay such estimated 
     expenditures.
       ``(B) United mine workers of america 1992 benefit plan.--A 
     transfer to the United Mine Workers of America 1992 Benefit 
     Plan, in an amount equal to the difference between--
       ``(i) the amount that the trustees of the 1992 UMWA Benefit 
     Plan estimate will be expended from the 1992 UMWA Benefit 
     Plan during the next calendar year to provide the benefits 
     required by the 1992 UMWA Benefit Plan on the date of 
     enactment of this subparagraph; minus
       ``(ii) the amount that the trustees of the 1992 UMWA 
     Benefit Plan estimate the 1992 UMWA Benefit Plan will receive 
     during the next calendar year in--

       ``(I) required monthly per beneficiary premiums, including 
     the amount of any security provided to the 1992 UMWA Benefit 
     Plan that is available for use in the provision of benefits; 
     and
       ``(II) payments paid by Federal agencies in connection with 
     benefits provided by the 1992 UMWA benefit plan.

       ``(C) Multiemployer health benefit plan.--A transfer to the 
     Multiemployer Health Benefit Plan established after July 20, 
     1992, by the parties that are the settlors of the 1992 UMWA 
     Benefit Plan referred to in subparagraph (B) (referred to in 
     this subparagraph and subparagraph (D) as `the Plan'), in an 
     amount equal to the excess (if any) of--
       ``(i) the amount that the trustees of the Plan estimate 
     will be expended from the Plan during the next calendar year, 
     to provide benefits no greater than those provided by the 
     Plan as of December 31, 2006; over
       ``(ii) the amount that the trustees estimated the Plan will 
     receive during the next calendar year in payments paid by 
     Federal agencies in connection with benefits provided by the 
     Plan.

     Such excess shall be calculated by taking into account only 
     those beneficiaries actually enrolled in the Plan as of 
     December 31, 2006, who are eligible to receive benefits under 
     the Plan on the first day of the calendar year for which the 
     transfer is made.
       ``(D) Individuals considered enrolled.--For purposes of 
     subparagraph (C), any individual who was eligible to receive 
     benefits from the Plan as of the date of enactment of this 
     subsection, even though benefits were being provided to the 
     individual pursuant to a settlement agreement approved by 
     order of a bankruptcy court entered on or before September 
     30, 2004, will be considered to be actually enrolled in the 
     Plan and shall receive benefits from the Plan beginning on 
     December 31, 2006.
       ``(3) Adjustment.--If, for any fiscal year, the amount of a 
     transfer under subparagraph (A), (B), or (C) of paragraph (2) 
     is more or less than the amount required to be transferred 
     under that subparagraph, the Secretary shall appropriately 
     adjust the amount transferred under that subparagraph for the 
     next fiscal year.
       ``(4) Additional amounts.--
       ``(A) Previously credited interest.--Notwithstanding any 
     other provision of law, any interest credited to the fund 
     that has not previously been transferred to the Combined 
     Benefit Fund referred to in paragraph (2)(A) under this 
     section--
       ``(i) shall be held in reserve by the Secretary until such 
     time as necessary to make the payments under subparagraphs 
     (A) and (B) of subsection (i)(1), as described in clause 
     (ii); and
       ``(ii) in the event that the amounts described in 
     subsection (i)(1) are insufficient to make the maximum 
     payments described in subparagraphs (A) and (B) of subsection 
     (i)(1), shall be used by the Secretary to supplement the 
     payments so that the maximum amount permitted under those 
     paragraphs is paid.
       ``(B) Previously allocated amounts.--All amounts allocated 
     under subsection (g)(2) before the date of enactment of this 
     subparagraph for the program described in section 406, but 
     not appropriated before that date, shall be available to the 
     Secretary to make the transfers described in paragraph (2).
       ``(C) Adequacy of previously credited interest.--The 
     Secretary shall--
       ``(i) consult with the trustees of the plans described in 
     paragraph (2) at reasonable intervals; and
       ``(ii) notify Congress if a determination is made that the 
     amounts held in reserve under subparagraph (A) are 
     insufficient to meet future requirements under subparagraph 
     (A)(ii).
       ``(D) Additional reserve amounts.--In addition to amounts 
     held in reserve under subparagraph (A), there is authorized 
     to be appropriated such sums as may be necessary for transfer 
     to the fund to carry out the purposes of subparagraph 
     (A)(ii).
       ``(E) Inapplicability of cap.--The limitation described in 
     subsection (i)(3)(A) shall not apply to payments made from 
     the reserve fund under this paragraph.
       ``(5) Limitations.--
       ``(A) Availability of funds for next fiscal year.--The 
     Secretary may make transfers under subparagraphs (B) and (C) 
     of paragraph (2) for a calendar year only if the Secretary 
     determines, using actuarial projections provided by the 
     trustees of the Combined Benefit Fund referred to in 
     paragraph (2)(A), that amounts will be available under 
     paragraph (1), after the transfer, for the next fiscal year 
     for making the transfer under paragraph (2)(A).
       ``(B) Rate of contributions of obligors.--
       ``(i) In general.--

       ``(I) Rate.--A transfer under paragraph (2)(C) shall not be 
     made for a calendar year

[[Page 16498]]

     unless the persons that are obligated to contribute to the 
     plan referred to in paragraph (2)(C) on the date of the 
     transfer are obligated to make the contributions at rates 
     that are no less than those in effect on the date which is 30 
     days before the date of enactment of this subsection.
       ``(II) Application.--The contributions described in 
     subclause (I) shall be applied first to the provision of 
     benefits to those plan beneficiaries who are not described in 
     paragraph (2)(C)(ii).

       ``(ii) Initial contributions.--

       ``(I) In general.--From the date of enactment of the 
     Surface Mining Control and Reclamation Act Amendments of 2006 
     through December 31, 2010, the persons that, on the date of 
     enactment of that Act, are obligated to contribute to the 
     plan referred to in paragraph (2)(C) shall be obligated, 
     collectively, to make contributions equal to the amount 
     described in paragraph (2)(C), less the amount actually 
     transferred due to the operation of subparagraph (C).
       ``(II) First calendar year.--Calendar year 2006 is the 
     first calendar year for which contributions are required 
     under this clause.
       ``(III) Amount of contribution for 2006.--Except as 
     provided in subclause (IV), the amount described in paragraph 
     (2)(C) for calendar year 2006 shall be calculated as if 
     paragraph (2)(C) had been in effect during 2005.
       ``(IV) Limitation.--The contributions required under this 
     clause for calendar year 2006 shall not exceed the amount 
     necessary for solvency of the plan described in paragraph 
     (2)(C), measured as of December 31, 2006 and taking into 
     account all assets held by the plan as of that date.

       ``(iii) Division.--The collective annual contribution 
     obligation required under clause (ii) shall be divided among 
     the persons subject to the obligation, and applied uniformly, 
     based on the hours worked for which contributions referred to 
     in clause (i) would be owed.
       ``(C) Phase-in of transfers.--For each of calendar years 
     2008 through 2010, the transfers required under subparagraphs 
     (B) and (C) of paragraph (2) shall equal the following 
     amounts:
       ``(i) For calendar year 2008, the Secretary shall make 
     transfers equal to 25 percent of the amounts that would 
     otherwise be required under subparagraphs (B) and (C) of 
     paragraph (2).
       ``(ii) For calendar year 2009, the Secretary shall make 
     transfers equal to 50 percent of the amounts that would 
     otherwise be required under subparagraphs (B) and (C) of 
     paragraph (2).
       ``(iii) For calendar year 2010, the Secretary shall make 
     transfers equal to 75 percent of the amounts that would 
     otherwise be required under subparagraphs (B) and (C) of 
     paragraph (2).
       ``(i) Funding.--
       ``(1) In general.--Subject to paragraph (3), out of any 
     funds in the Treasury not otherwise appropriated, the 
     Secretary of the Treasury shall transfer to the plans 
     described in subsection (h)(2) such sums as are necessary to 
     pay the following amounts:
       ``(A) To the Combined Fund (as defined in section 
     9701(a)(5) of the Internal Revenue Code of 1986 and referred 
     to in this paragraph as the `Combined Fund'), the amount that 
     the trustees of the Combined Fund estimate will be expended 
     from premium accounts maintained by the Combined Fund for the 
     fiscal year to provide benefits for beneficiaries who are 
     unassigned beneficiaries solely as a result of the 
     application of section 9706(h)(1) of the Internal Revenue 
     Code of 1986, subject to the following limitations:
       ``(i) For fiscal year 2008, the amount paid under this 
     subparagraph shall equal--

       ``(I) the amount described in subparagraph (A); minus
       ``(II) the amounts required under section 9706(h)(3)(A) of 
     the Internal Revenue Code of 1986.

       ``(ii) For fiscal year 2009, the amount paid under this 
     subparagraph shall equal--

       ``(I) the amount described in subparagraph (A); minus
       ``(II) the amounts required under section 9706(h)(3)(B) of 
     the Internal Revenue Code of 1986.

       ``(iii) For fiscal year 2010, the amount paid under this 
     subparagraph shall equal--

       ``(I) the amount described in subparagraph (A); minus
       ``(II) the amounts required under section 9706(h)(3)(C) of 
     the Internal Revenue Code of 1986.

       ``(B) On certification by the trustees of any plan 
     described in subsection (h)(2) that the amount available for 
     transfer by the Secretary pursuant to this section 
     (determined after application of any limitation under 
     subsection (h)(5)) is less than the amount required to be 
     transferred, to the plan the amount necessary to meet the 
     requirement of subsection (h)(2).
       ``(C) To the Combined Fund, $9,000,000 on October 1, 2007, 
     $9,000,000 on October 1, 2008, and $9,000,000 on October 1, 
     2009 (which amounts shall not be exceeded) to provide a 
     refund of any premium (as described in section 9704(a) of the 
     Internal Revenue Code of 1986) paid on or before September 7, 
     2000, to the Combined Fund, plus interest on the premium 
     calculated at the rate of 7.5 percent per year, on a 
     proportional basis and to be paid not later than 60 days 
     after the date on which each payment is received by the 
     Combined Fund, to those signatory operators (to the extent 
     that the Combined Fund has not previously returned the 
     premium amounts to the operators), or any related persons to 
     the operators (as defined in section 9701(c) of the Internal 
     Revenue Code of 1986), or their heirs, successors, or assigns 
     who have been denied the refunds as the result of final 
     judgments or settlements if--
       ``(i) prior to the date of enactment of this paragraph, the 
     signatory operator (or any related person to the operator)--

       ``(I) had all of its beneficiary assignments made under 
     section 9706 of the Internal Revenue Code of 1986 voided by 
     the Commissioner of the Social Security Administration; and
       ``(II) was subject to a final judgment or final settlement 
     of litigation adverse to a claim by the operator that the 
     assignment of beneficiaries under section 9706 of the 
     Internal Revenue Code of 1986 was unconstitutional as applied 
     to the operator; and

       ``(ii) on or before September 7, 2000, the signatory 
     operator (or any related person to the operator) had paid to 
     the Combined Fund any premium amount that had not been 
     refunded.
       ``(2) Payments to states and indian tribes.--Subject to 
     paragraph (3), out of any funds in the Treasury not otherwise 
     appropriated, the Secretary of the Treasury shall transfer to 
     the Secretary of the Interior for distribution to States and 
     Indian tribes such sums as are necessary to pay amounts 
     described in paragraphs (1)(A) and (2)(A) of section 411(h).
       ``(3) Limitations.--
       ``(A) Cap.--The total amount transferred under this 
     subsection for any fiscal year shall not exceed $490,000,000.
       ``(B) Insufficient amounts.--In a case in which the amount 
     required to be transferred without regard to this paragraph 
     exceeds the maximum annual limitation in subparagraph (A), 
     the Secretary shall adjust the transfers of funds so that--
       ``(i) each transfer for the fiscal year is a percentage of 
     the amount described;
       ``(ii) the amount is determined without regard to 
     subsection (h)(5)(A); and
       ``(iii) the percentage transferred is the same for all 
     transfers made under this subsection for the fiscal year.
       ``(4) Availability of funds.--Funds shall be transferred 
     under paragraph (1) and (2) beginning in fiscal year 2008 and 
     each fiscal year thereafter, and shall remain available until 
     expended.''.

     SEC. 313. OBJECTIVES OF FUND.

       Section 403 of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1233) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``(1) the protection'' and inserting the 
     following:
       ``(1)(A) the protection;'';
       (ii) in subparagraph (A) (as designated by clause (i)), by 
     striking ``general welfare,''; and
       (iii) by adding at the end the following:
       ``(B) the restoration of land and water resources and the 
     environment that--
       ``(i) have been degraded by the adverse effects of coal 
     mining practices; and
       ``(ii) are adjacent to a site that has been or will be 
     remediated under subparagraph (A);'';
       (B) in paragraph (2)--
       (i) by striking ``(2) the protection'' and inserting the 
     following:
       ``(2)(A) the protection'';
       (ii) in subparagraph (A) (as designated by clause (i), by 
     striking ``health, safety, and general welfare'' and 
     inserting ``health and safety''; and
       (iii) by adding at the end the following:
       ``(B) the restoration of land and water resources and the 
     environment that--
       ``(i) have been degraded by the adverse effects of coal 
     mining practices; and
       ``(ii) are adjacent to a site that has been or will be 
     remediated under subparagraph (A); and'';
       (C) in paragraph (3), by striking the semicolon at the end 
     and inserting a period; and
       (D) by striking paragraphs (4) and (5);
       (2) in subsection (b)--
       (A) by striking the subsection heading and inserting 
     ``Water Supply Restoration.--''; and
       (B) in paragraph (1), by striking ``up to 30 percent of 
     the''; and
       (3) in the second sentence of subsection (c), by inserting 
     ``, subject to the approval of the Secretary,'' after 
     ``amendments''.

     SEC. 314. RECLAMATION OF RURAL LAND.

       (a) Administration.--Section 406(h) of the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 1236(h)) is 
     amended by striking ``Soil Conservation Service'' and 
     inserting ``Natural Resources Conservation Service''.
       (b) Authorization of Appropriations for Carrying Out Rural 
     Land Reclamation.--Section 406 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1236) is amended by 
     adding at the end the following:
       ``(i) There are authorized to be appropriated to the 
     Secretary of Agriculture, from amounts in the Treasury other 
     than amounts in the fund, such sums as may be necessary to 
     carry out this section.''.

     SEC. 315. LIENS.

       Section 408(a) of the Surface Mining Control and 
     Reclamation Act of 1977 (30 U.S.C.

[[Page 16499]]

     1238) is amended in the last sentence by striking ``who owned 
     the surface prior to May 2, 1977, and''.

     SEC. 316. CERTIFICATION.

       Section 411 of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1240a) is amended--
       (1) in subsection (a)--
       (A) by inserting ``(1)'' before the first sentence; and
       (B) by adding at the end the following:
       ``(2)(A) The Secretary may, on the initiative of the 
     Secretary, make the certification referred to in paragraph 
     (1) on behalf of any State or Indian tribe referred to in 
     paragraph (1) if on the basis of the inventory referred to in 
     section 403(c) all reclamation projects relating to the 
     priorities described in section 403(a) for eligible land and 
     water pursuant to section 404 in the State or tribe have been 
     completed.
       ``(B) The Secretary shall only make the certification after 
     notice in the Federal Register and opportunity for public 
     comment.''; and
       (2) by adding at the end the following:
       ``(h) Payments to States and Indian Tribes.--
       ``(1) In general.--
       ``(A) Payments.--
       ``(i) In general.--Notwithstanding section 401(f)(3)(B), 
     from funds referred to in section 402(i)(2), the Secretary 
     shall make payments to States or Indian tribes for the amount 
     due for the aggregate unappropriated amount allocated to the 
     State or Indian tribe under subparagraph (A) or (B) of 
     section 402(g)(1).
       ``(ii) Conversion as equivalent payments.--Amounts 
     allocated under subparagraphs (A) or (B) of section 402(g)(1) 
     shall be reallocated to the allocation established in section 
     402(g)(5) in amounts equivalent to payments made to States or 
     Indian tribes under this paragraph.
       ``(B) Amount due.--In this paragraph, the term `amount due' 
     means the unappropriated amount allocated to a State or 
     Indian tribe before October 1, 2007, under subparagraph (A) 
     or (B) of section 402(g)(1).
       ``(C) Schedule.--Payments under subparagraph (A) shall be 
     made in 7 equal annual installments, beginning with fiscal 
     year 2008.
       ``(D) Use of funds.--
       ``(i) Certified states and indian tribes.--A State or 
     Indian tribe that makes a certification under subsection (a) 
     in which the Secretary concurs shall use any amounts provided 
     under this paragraph for the purposes established by the 
     State legislature or tribal council of the Indian tribe, with 
     priority given for addressing the impacts of mineral 
     development.
       ``(ii) Uncertified states and indian tribes.--A State or 
     Indian tribe that has not made a certification under 
     subsection (a) in which the Secretary has concurred shall use 
     any amounts provided under this paragraph for the purposes 
     described in section 403.
       ``(2) Subsequent state and indian tribe share for certified 
     states and indian tribes.--
       ``(A) In general.--Notwithstanding section 401(f)(3)(B), 
     from funds referred to in section 402(i)(2), the Secretary 
     shall pay to each certified State or Indian tribe an amount 
     equal to the sum of the aggregate unappropriated amount 
     allocated on or after October 1, 2007, to the certified State 
     or Indian tribe under subparagraph (A) or (B) of section 
     402(g)(1).
       ``(B) Certified state or indian tribe defined.--In this 
     paragraph the term `certified State or Indian tribe' means a 
     State or Indian tribe for which a certification is made under 
     subsection (a) in which the Secretary concurs.
       ``(3) Manner of payment.--
       ``(A) In general.--Subject to subparagraph (B), payments to 
     States or Indian tribes under this subsection shall be made 
     without regard to any limitation in section 401(d) and 
     concurrently with payments to States under that section.
       ``(B) Initial payments.--The first 3 payments made to any 
     State or Indian tribe shall be reduced to 25 percent, 50 
     percent, and 75 percent, respectively, of the amounts 
     otherwise required under paragraph (2)(A).
       ``(C) Installments.--Amounts withheld from the first 3 
     annual installments as provided under subparagraph (B) shall 
     be paid in 2 equal annual installments beginning with fiscal 
     year 2018.
       ``(4) Reallocation.--
       ``(A) In general.--The amount allocated to any State or 
     Indian tribe under subparagraph (A) or (B) of section 
     402(g)(1) that is paid to the State or Indian tribe as a 
     result of a payment under paragraph (1) or (2) shall be 
     reallocated and available for grants under section 402(g)(5).
       ``(B) Allocation.--The grants shall be allocated based on 
     the amount of coal historically produced before August 3, 
     1977, in the same manner as under section 402(g)(5).''.

     SEC. 317. REMINING INCENTIVES.

       Title IV of the Surface Mining Control and Reclamation Act 
     of 1977 (30 U.S.C. 1231 et seq.) is amended by adding at the 
     following:

     ``SEC. 415. REMINING INCENTIVES.

       ``(a) In General.--Notwithstanding any other provision of 
     this Act, the Secretary may, after opportunity for public 
     comment, promulgate regulations that describe conditions 
     under which amounts in the fund may be used to provide 
     incentives to promote remining of eligible land under section 
     404 in a manner that leverages the use of amounts from the 
     fund to achieve more reclamation with respect to the eligible 
     land than would be achieved without the incentives.
       ``(b) Requirements.--Any regulations promulgated under 
     subsection (a) shall specify that the incentives shall apply 
     only if the Secretary determines, with the concurrence of the 
     State regulatory authority referred to in title V, that, 
     without the incentives, the eligible land would not be likely 
     to be remined and reclaimed.
       ``(c) Incentives.--
       ``(1) In general.--Incentives that may be considered for 
     inclusion in the regulations promulgated under subsection (a) 
     include, but are not limited to--
       ``(A) a rebate or waiver of the reclamation fees required 
     under section 402(a); and
       ``(B) the use of amounts in the fund to provide financial 
     assurance for remining operations in lieu of all or a portion 
     of the performance bonds required under section 509.
       ``(2) Limitations.--
       ``(A) Use.--A rebate or waiver under paragraph (1)(A) shall 
     be used only for operations that--
       ``(i) remove or reprocess abandoned coal mine waste; or
       ``(ii) conduct remining activities that meet the priorities 
     specified in paragraph (1) or (2) of section 403(a).
       ``(B) Amount.--The amount of a rebate or waiver provided as 
     an incentive under paragraph (1)(A) to remine or reclaim 
     eligible land shall not exceed the estimated cost of 
     reclaiming the eligible land under this section.''.

     SEC. 318. EXTENSION OF LIMITATION ON APPLICATION OF 
                   PROHIBITION ON ISSUANCE OF PERMIT.

       Section 510(e) of the Surface Mining Control and 
     Reclamation Act of 1977 (30 U.S.C. 1260(e)) is amended by 
     striking the last sentence.

     SEC. 319. TRIBAL REGULATION OF SURFACE COAL MINING AND 
                   RECLAMATION OPERATIONS.

       (a) In General.--Section 710 of the Surface Mining Control 
     and Reclamation Act of 1977 (30 U.S.C. 1300) is amended by 
     adding at the end the following:
       ``(j) Tribal Regulatory Authority.--
       ``(1) Tribal regulatory programs.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, an Indian tribe may apply for, and obtain the approval 
     of, a tribal program under section 503 regulating in whole or 
     in part surface coal mining and reclamation operations on 
     reservation land under the jurisdiction of the Indian tribe 
     using the procedures of section 504(e).
       ``(B) References to state.--For purposes of this subsection 
     and the implementation and administration of a tribal program 
     under title V, any reference to a `State' in this Act shall 
     be considered to be a reference to a `tribe'.
       ``(2) Conflicts of interest.--
       ``(A) In general.--The fact that an individual is a member 
     of an Indian tribe does not in itself constitute a violation 
     of section 201(f).
       ``(B) Employees of tribal regulatory authority.--Any 
     employee of a tribal regulatory authority shall not be 
     eligible for a per capita distribution of any proceeds from 
     coal mining operations conducted on Indian reservation lands 
     under this Act.
       ``(3) Sovereign immunity.--To receive primary regulatory 
     authority under section 504(e), an Indian tribe shall waive 
     sovereign immunity for purposes of section 520 and paragraph 
     (4).
       ``(4) Judicial review.--
       ``(A) Civil actions.--
       ``(i) In general.--After exhausting all tribal remedies 
     with respect to a civil action arising under a tribal program 
     approved under section 504(e), an interested party may file a 
     petition for judicial review of the civil action in the 
     United States circuit court for the circuit in which the 
     surface coal mining operation named in the petition is 
     located.
       ``(ii) Scope of review.--

       ``(I) Questions of law.--The United States circuit court 
     shall review de novo any questions of law under clause (i).
       ``(II) Findings of fact.--The United States circuit court 
     shall review findings of fact under clause (i) using a 
     clearly erroneous standard.

       ``(B) Criminal actions.--Any criminal action brought under 
     section 518 with respect to surface coal mining or 
     reclamation operations on Indian reservation lands shall be 
     brought in--
       ``(i) the United States District Court for the District of 
     Columbia; or
       ``(ii) the United States district court in which the 
     criminal activity is alleged to have occurred.
       ``(5) Grants.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     grants for developing, administering, and enforcing tribal 
     programs approved in accordance with section 504(e) shall be 
     provided to an Indian tribe in accordance with section 705.
       ``(B) Exception.--Notwithstanding subparagraph (A), the 
     Federal share of the costs of developing, administering, and 
     enforcing an approved tribal program shall be 100 percent.
       ``(6) Report.--Not later than 18 months after the date on 
     which a tribal program is approved under subsection (e) of 
     section 504,

[[Page 16500]]

     the Secretary shall submit to the appropriate committees of 
     Congress a report, developed in cooperation with the 
     applicable Indian tribe, on the tribal program that includes 
     a recommendation of the Secretary on whether primary 
     regulatory authority under that subsection should be expanded 
     to include additional Indian lands.''.
       (b) Conforming Amendment.--Section 710(i) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1300(i)) is amended in the first sentence by striking ``, 
     except'' and all that follows through ``section 503''.

          Subtitle B--Coal Industry Retiree Health Benefit Act

     SEC. 321. CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST 
                   RELIEVED OF LIABILITY IF PREMIUMS PREPAID.

       (a) Combined Benefit Fund.--
       (1) In general.--Section 9704 of the Internal Revenue Code 
     of 1986 (relating to liability of assigned operators) is 
     amended by adding at the end the following new subsection:
       ``(j) Prepayment of Premium Liability.--
       ``(1) In general.--If--
       ``(A) a payment meeting the requirements of paragraph (3) 
     is made to the Combined Fund by or on behalf of--
       ``(i) any assigned operator to which this subsection 
     applies, or
       ``(ii) any related person to any assigned operator 
     described in clause (i), and
       ``(B) the common parent of the controlled group of 
     corporations described in paragraph (2)(B) is jointly and 
     severally liable for any premium under this section which 
     (but for this subsection) would be required to be paid by the 
     assigned operator or related person,

     then such common parent (and no other person) shall be liable 
     for such premium.
       ``(2) Assigned operators to which subsection applies.--
       ``(A) In general.--This subsection shall apply to any 
     assigned operator if--
       ``(i) the assigned operator (or a related person to the 
     assigned operator)--

       ``(I) made contributions to the 1950 UMWA Benefit Plan and 
     the 1974 UMWA Benefit Plan for employment during the period 
     covered by the 1988 agreement; and
       ``(II) is not a 1988 agreement operator,

       ``(ii) the assigned operator (and all related persons to 
     the assigned operator) are not actively engaged in the 
     production of coal as of July 1, 2005, and
       ``(iii) the assigned operator was, as of July 20, 1992, a 
     member of a controlled group of corporations described in 
     subparagraph (B).
       ``(B) Controlled group of corporations.--A controlled group 
     of corporations is described in this subparagraph if the 
     common parent of such group is a corporation the shares of 
     which are publicly traded on a United States exchange.
       ``(C) Coordination with repeal of assignments.--A person 
     shall not fail to be treated as an assigned operator to which 
     this subsection applies solely because the person ceases to 
     be an assigned operator by reason of section 9706(h)(1) if 
     the person otherwise meets the requirements of this 
     subsection and is liable for the payment of premiums under 
     section 9706(h)(3).
       ``(D) Controlled group.--For purposes of this subsection, 
     the term `controlled group of corporations' has the meaning 
     given such term by section 52(a).
       ``(3) Requirements.--A payment meets the requirements of 
     this paragraph if--
       ``(A) the amount of the payment is not less than the 
     present value of the total premium liability under this 
     chapter with respect to the Combined Fund of the assigned 
     operators or related persons described in paragraph (1) or 
     their assignees, as determined by the operator's or related 
     person's enrolled actuary (as defined in section 7701(a)(35)) 
     using actuarial methods and assumptions each of which is 
     reasonable and which are reasonable in the aggregate, as 
     determined by such enrolled actuary;
       ``(B) such enrolled actuary files with the Secretary of 
     Labor a signed actuarial report containing--
       ``(i) the date of the actuarial valuation applicable to the 
     report; and
       ``(ii) a statement by the enrolled actuary signing the 
     report that, to the best of the actuary's knowledge, the 
     report is complete and accurate and that in the actuary's 
     opinion the actuarial assumptions used are in the aggregate 
     reasonably related to the experience of the operator and to 
     reasonable expectations; and
       ``(C) 90 calendar days have elapsed after the report 
     required by subparagraph (B) is filed with the Secretary of 
     Labor, and the Secretary of Labor has not notified the 
     assigned operator in writing that the requirements of this 
     paragraph have not been satisfied.
       ``(4) Use of prepayment.--The Combined Fund shall--
       ``(A) establish and maintain an account for each assigned 
     operator or related person by, or on whose behalf, a payment 
     described in paragraph (3) was made,
       ``(B) credit such account with such payment (and any 
     earnings thereon), and
       ``(C) use all amounts in such account exclusively to pay 
     premiums that would (but for this subsection) be required to 
     be paid by the assigned operator.

     Upon termination of the obligations for the premium liability 
     of any assigned operator or related person for which such 
     account is maintained, all funds remaining in such account 
     (and earnings thereon) shall be refunded to such person as 
     may be designated by the common parent described in paragraph 
     (1)(B).''.
       (b) Individual Employer Plans.--Section 9711(c) of the 
     Internal Revenue Code of 1986 (relating to joint and several 
     liability) is amended to read as follows:
       ``(c) Joint and Several Liability of Related Persons.--
       ``(1) In general.--Except as provided in paragraph (2), 
     each related person of a last signatory operator to which 
     subsection (a) or (b) applies shall be jointly and severally 
     liable with the last signatory operator for the provision of 
     health care coverage described in subsection (a) or (b).
       ``(2) Liability limited if security provided.--If--
       ``(A) security meeting the requirements of paragraph (3) is 
     provided by or on behalf of--
       ``(i) any last signatory operator which is an assigned 
     operator described in section 9704(j)(2), or
       ``(ii) any related person to any last signatory operator 
     described in clause (i), and
       ``(B) the common parent of the controlled group of 
     corporations described in section 9704(j)(2)(B) is jointly 
     and severally liable for the provision of health care under 
     this section which, but for this paragraph, would be required 
     to be provided by the last signatory operator or related 
     person,

     then, as of the date the security is provided, such common 
     parent (and no other person) shall be liable for the 
     provision of health care under this section which the last 
     signatory operator or related person would otherwise be 
     required to provide. Security may be provided under this 
     paragraph without regard to whether a payment was made under 
     section 9704(j).
       ``(3) Security.--Security meets the requirements of this 
     paragraph if--
       ``(A) the security--
       ``(i) is in the form of a bond, letter of credit, or cash 
     escrow,
       ``(ii) is provided to the trustees of the 1992 UMWA Benefit 
     Plan solely for the purpose of paying premiums for 
     beneficiaries who would be described in section 9712(b)(2)(B) 
     if the requirements of this section were not met by the last 
     signatory operator, and
       ``(iii) is in an amount equal to 1 year of liability of the 
     last signatory operator under this section, determined by 
     using the average cost of such operator's liability during 
     the prior 3 calendar years;
       ``(B) the security is in addition to any other security 
     required under any other provision of this title; and
       ``(C) the security remains in place for 5 years.
       ``(4) Refunds of security.--The remaining amount of any 
     security provided under this subsection (and earnings 
     thereon) shall be refunded to the last signatory operator as 
     of the earlier of--
       ``(A) the termination of the obligations of the last 
     signatory operator under this section, or
       ``(B) the end of the 5-year period described in paragraph 
     (4)(C).''.
       (c) 1992 UMWA Benefit Plan.--Section 9712(d)(4) of the 
     Internal Revenue Code of 1986 (relating to joint and several 
     liability) is amended by adding at the end the following new 
     sentence: ``The provisions of section 9711(c)(2) shall apply 
     to any last signatory operator described in such section 
     (without regard to whether security is provided under such 
     section, a payment is made under section 9704(j), or both) 
     and if security meeting the requirements of section 
     9711(c)(3) is provided, the common parent described in 
     section 9711(c)(2)(B) shall be exclusively responsible for 
     any liability for premiums under this section which, but for 
     this sentence, would be required to be paid by the last 
     signatory operator or any related person.''.
       (d) Successor in Interest.--Section 9701(c) of the Internal 
     Revenue Code of 1986 (relating to terms relating to 
     operators) is amended by adding at the end the following new 
     paragraph:
       ``(8) Successor in interest.--
       ``(A) Safe harbor.--The term `successor in interest' shall 
     not include any person who--
       ``(i) is an unrelated person to an eligible seller 
     described in subparagraph (C); and
       ``(ii) purchases for fair market value assets, or all of 
     the stock, of a related person to such seller, in a bona 
     fide, arm's-length sale.
       ``(B) Unrelated person.--The term `unrelated person' means 
     a purchaser who does not bear a relationship to the eligible 
     seller described in section 267(b).
       ``(C) Eligible seller.--For purposes of this paragraph, the 
     term `eligible seller' means an assigned operator described 
     in section 9704(j)(2) or a related person to such assigned 
     operator.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act, 
     except that the amendment made by subsection (d) shall apply 
     to transactions after the date of the enactment of this Act.

     SEC. 322. TRANSFERS TO FUNDS; PREMIUM RELIEF.

       (a) Combined Fund.--
       (1) Federal transfers.--Section 9705(b) of the Internal 
     Revenue Code of 1986 (relating

[[Page 16501]]

     to transfers from Abandoned Mine Reclamation Fund) is 
     amended--
       (A) in paragraph (1), by striking ``section 402(h)'' and 
     inserting ``subsections (h) and (i) of section 402'';
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Use of funds.--Any amount transferred under paragraph 
     (1) for any fiscal year shall be used to pay benefits and 
     administrative costs of beneficiaries of the Combined Fund or 
     for such other purposes as are specifically provided in the 
     Acts described in paragraph (1).''; and
       (C) by striking ``From Abandoned Mine Reclamation Fund''.
       (2) Modifications of premiums to reflect federal 
     transfers.--
       (A) Elimination of unassigned beneficiaries premium.--
     Section 9704(d) of such Code (establishing unassigned 
     beneficiaries premium) is amended to read as follows:
       ``(d) Unassigned Beneficiaries Premium.--
       ``(1) Plan years ending on or before september 30, 2006.--
     For plan years ending on or before September 30, 2006, the 
     unassigned beneficiaries premium for any assigned operator 
     shall be equal to the applicable percentage of the product of 
     the per beneficiary premium for the plan year multiplied by 
     the number of eligible beneficiaries who are not assigned 
     under section 9706 to any person for such plan year.
       ``(2) Plan years beginning on or after october 1, 2006.--
       ``(A) In general.--For plan years beginning on or after 
     October 1, 2006, subject to subparagraph (B), there shall be 
     no unassigned beneficiaries premium, and benefit costs with 
     respect to eligible beneficiaries who are not assigned under 
     section 9706 to any person for any such plan year shall be 
     paid from amounts transferred under section 9705(b).
       ``(B) Inadequate transfers.--If, for any plan year 
     beginning on or after October 1, 2006, the amounts 
     transferred under section 9705(b) are less than the amounts 
     required to be transferred to the Combined Fund under 
     subsection (h)(2)(A) or (i) of section 402 of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232)), 
     then the unassigned beneficiaries premium for any assigned 
     operator shall be equal to the operator's applicable 
     percentage of the amount required to be so transferred which 
     was not so transferred.''.
       (B) Premium accounts.--
       (i) Crediting of accounts.--Section 9704(e)(1) of such Code 
     (relating to premium accounts; adjustments) is amended by 
     inserting ``and amounts transferred under section 9705(b)'' 
     after ``premiums received''.
       (ii) Surpluses attributable to public funding.--Section 
     9704(e)(3)(A) of such Code is amended by adding at the end 
     the following new sentence: ``Amounts credited to an account 
     from amounts transferred under section 9705(b) shall not be 
     taken into account in determining whether there is a surplus 
     in the account for purposes of this paragraph.''
       (C) Applicable percentage.--Section 9704(f)(2) of such Code 
     (relating to annual adjustments) is amended by adding at the 
     end the following new subparagraph:
       ``(C) In the case of plan years beginning on or after 
     October 1, 2007, the total number of assigned eligible 
     beneficiaries shall be reduced by the eligible beneficiaries 
     whose assignments have been revoked under section 9706(h).''.
       (3) Assignments and reassignment.--Section 9706 of the 
     Internal Revenue Code of 1986 (relating to assignment of 
     eligible beneficiaries) is amended by adding at the end the 
     following:
       ``(h) Assignments as of October 1, 2007.--
       ``(1) In general.--Subject to the premium obligation set 
     forth in paragraph (3), the Commissioner of Social Security 
     shall--
       ``(A) revoke all assignments to persons other than 1988 
     agreement operators for purposes of assessing premiums for 
     plan years beginning on and after October 1, 2007; and
       ``(B) make no further assignments to persons other than 
     1988 agreement operators, except that no individual who 
     becomes an unassigned beneficiary by reason of subparagraph 
     (A) may be assigned to a 1988 agreement operator.
       ``(2) Reassignment upon purchase.--This subsection shall 
     not be construed to prohibit the reassignment under 
     subsection (b)(2) of an eligible beneficiary.
       ``(3) Liability of persons during three fiscal years 
     beginning on and after october 1, 2007.--In the case of each 
     of the fiscal years beginning on October 1, 2007, 2008, and 
     2009, each person other than a 1988 agreement operator shall 
     pay to the Combined Fund the following percentage of the 
     amount of annual premiums that such person would otherwise be 
     required to pay under section 9704(a), determined on the 
     basis of assignments in effect without regard to the 
     revocation of assignments under paragraph (1)(A):
       ``(A) For the fiscal year beginning on October 1, 2007, 55 
     percent.
       ``(B) For the fiscal year beginning on October 1, 2008, 40 
     percent.
       ``(C) For the fiscal year beginning on October 1, 2009, 15 
     percent.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to plan years of the Combined Fund beginning 
     after September 30, 2006.
       (b) 1992 UMWA Benefit and Other Plans.--
       (1) Transfers to plans.--Section 9712(a) of the Internal 
     Revenue Code of 1986 (relating to the establishment and 
     coverage of the 1992 UMWA Benefit Plan) is amended by adding 
     at the end the following:
       ``(3) Transfers under other federal statutes.--
       ``(A) In general.--The 1992 UMWA Benefit Plan shall include 
     any amount transferred to the plan under subsections (h) and 
     (i) of section 402 of the Surface Mining Control and 
     Reclamation Act of 1977 (30 U.S.C. 1232).
       ``(B) Use of funds.--Any amount transferred under 
     subparagraph (A) for any fiscal year shall be used to provide 
     the health benefits described in subsection (c) with respect 
     to any beneficiary for whom no monthly per beneficiary 
     premium is paid pursuant to paragraph (1)(A) or (3) of 
     subsection (d).
       ``(4) Special rule for 1993 plan.--
       ``(A) In general.--The plan described in section 
     402(h)(2)(C) of the Surface Mining Control and Reclamation 
     Act of 1977 (30 U.S.C. 1232(h)(2)(C)) shall include any 
     amount transferred to the plan under subsections (h) and (i) 
     of the Surface Mining Control and Reclamation Act of 1977 (30 
     U.S.C. 1232).
       ``(B) Use of funds.--Any amount transferred under 
     subparagraph (A) for any fiscal year shall be used to provide 
     the health benefits described in section 402(h)(2)(C)(i) of 
     the Surface Mining Control and Reclamation Act of 1977 (30 
     U.S.C. 1232(h)(2)(C)(i)) to individuals described in section 
     402(h)(2)(C) of such Act (30 U.S.C. 1232(h)(2)(C)).''.
       (2) Premium adjustments.--
       (A) In general.--Section 9712(d)(1) of such Code (relating 
     to guarantee of benefits) is amended to read as follows:
       ``(1) In general.--All 1988 last signatory operators shall 
     be responsible for financing the benefits described in 
     subsection (c) by meeting the following requirements in 
     accordance with the contribution requirements established in 
     the 1992 UMWA Benefit Plan:
       ``(A) The payment of a monthly per beneficiary premium by 
     each 1988 last signatory operator for each eligible 
     beneficiary of such operator who is described in subsection 
     (b)(2) and who is receiving benefits under the 1992 UMWA 
     benefit plan.
       ``(B) The provision of a security (in the form of a bond, 
     letter of credit, or cash escrow) in an amount equal to a 
     portion of the projected future cost to the 1992 UMWA Benefit 
     Plan of providing health benefits for eligible and 
     potentially eligible beneficiaries attributable to the 1988 
     last signatory operator.
       ``(C) If the amounts transferred under subsection (a)(3) 
     are less than the amounts required to be transferred to the 
     1992 UMWA Benefit Plan under subsections (h) and (i) of 
     section 402 of the Surface Mining Control and Reclamation Act 
     of 1977 (30 U.S.C. 1232), the payment of an additional 
     backstop premium by each 1988 last signatory operator which 
     is equal to such operator's share of the amounts required to 
     be so transferred but which were not so transferred, 
     determined on the basis of the number of eligible and 
     potentially eligible beneficiaries attributable to the 
     operator.''.
       (B) Conforming amendments.--Section 9712(d) of such Code is 
     amended--
       (i) in paragraph (2)(B), by striking ``prefunding'' and 
     inserting ``backstop'', and
       (ii) in paragraph (3), by striking ``paragraph (1)(B)'' and 
     inserting ``paragraph (1) (A)''.
       (C) Effective date.--The amendments made by this paragraph 
     shall apply to fiscal years beginning on or after October 1, 
     2010.

     SEC. 323. OTHER PROVISIONS.

       (a) Board of Trustees.--Section 9702(b) of the Internal 
     Revenue Code of 1986 (relating to board of trustees of the 
     Combined Fund) is amended to read as follows:
       ``(b) Board of Trustees.--
       ``(1) In general.--For purposes of subsection (a), the 
     board of trustees for the Combined Fund shall be appointed as 
     follows:
       ``(A) 2 individuals who represent employers in the coal 
     mining industry shall be designated by the BCOA;
       ``(B) 2 individuals designated by the United Mine Workers 
     of America; and
       ``(C) 3 individuals selected by the individuals appointed 
     under subparagraphs (A) and (B).
       ``(2) Successor trustees.--Any successor trustee shall be 
     appointed in the same manner as the trustee being succeeded. 
     The plan establishing the Combined Fund shall provide for the 
     removal of trustees.
       ``(3) Special rule.--If the BCOA ceases to exist, any 
     trustee or successor under paragraph (1)(A) shall be 
     designated by the 3 employers who were members of the BCOA on 
     the enactment date and who have been assigned the greatest 
     number of eligible beneficiaries under section 9706.''.
       (b) Enforcement of Obligations.--
       (1) Failure to pay premiums.--Section 9707(a) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(a) Failures to Pay.--
       ``(1) Premiums for eligible beneficiaries.--There is hereby 
     imposed a penalty on the failure of any assigned operator to 
     pay any premium required to be paid under section 9704 with 
     respect to any eligible beneficiary.

[[Page 16502]]

       ``(2) Contributions required under the mining laws.--There 
     is hereby imposed a penalty on the failure of any person to 
     make a contribution required under section 402(h)(5)(B)(ii) 
     of the Surface Mining Control and Reclamation Act of 1977 to 
     a plan referred to in section 402(h)(2)(C) of such Act. For 
     purposes of applying this section, each such required monthly 
     contribution for the hours worked of any individual shall be 
     treated as if it were a premium required to be paid under 
     section 9704 with respect to an eligible beneficiary.''.
       (2) Civil enforcement.--Section 9721 of such Code is 
     amended to read as follows:

     ``SEC. 9721. CIVIL ENFORCEMENT.

       ``The provisions of section 4301 of the Employee Retirement 
     Income Security Act of 1974 shall apply, in the same manner 
     as any claim arising out of an obligation to pay withdrawal 
     liability under subtitle E of title IV of such Act, to any 
     claim--
       ``(1) arising out of an obligation to pay any amount 
     required to be paid by this chapter; or
       ``(2) arising out of an obligation to pay any amount 
     required by section 402(h)(5)(B)(ii) of the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 
     1232(h)(5)(B)(ii)).''.

  Mr. GEORGE MILLER of California (during the reading). Mr. Speaker, I 
ask unanimous consent that the motion to recommit be considered as read 
and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
  Mr. GEORGE MILLER of California. Mr. Speaker, there has been a lot of 
discussion and there appears to be almost unanimity in this Congress 
that we should be raising the minimum wage. But it also is very clear 
from this discussion that if we proceed with the bill that is before us 
offered by the majority in this House, that we will not accomplish 
transferring that legislation into the law of the land, because that 
legislation has very little chance of passing in the time remaining in 
this House.
  We offer this motion to recommit because in this motion we offer the 
minimum wage, we offer the extenders that are present in the bill that 
is before us, and the provisions for coal mining. These are important, 
they are widely supported in the Congress; we voted on them many times, 
and they are important for all the reasons people cited here today. 
But, most importantly, it will allow us to have in effect an up-or-down 
vote on the minimum wage because it will not have the poison pill of 
the estate tax, all of the costs, all of the deficit that is created by 
that legislation. It will not bring that controversy to this chance, 
the first chance in 9 years to raise the minimum wage for those people 
working at the federally mandated minimum wage of $5.15 an hour.
  We have now seen that many, many Members of this Congress have 
decided that that is no longer acceptable in this country, that we 
cannot mandate under Federal law that that is the minimum wage for 
these people. And so we have an opportunity to change it, but the only 
real opportunity to change it comes with the motion to recommit, where 
we can clean this legislation up, we can take the poison pill out, we 
can take the deficit spending out, we can take the privilege out of 
this legislation, and we can address the important priorities of this 
Nation.
  That is what we should be doing at this point in this session of this 
Congress. That is what we should be doing at 5 minutes after 1 o'clock 
in the morning. We should be addressing the important priorities of 
this Nation, and we should do it in the manner that ensures, that 
almost guarantees the opportunity to pass the minimum wage so that 
these people can help to lift themselves out of poverty, help to be 
able to provide the wherewithal for their families, and be able to 
continue in their employment.
  We don't have to go the route that the Republicans went with the 
minimum wage where these people have to wait another 18 months. We 
don't have to go through this business of taking away the wages from 
people who earn tips. We don't have to do any of that. We can have a 
clean minimum wage, we can have clean extenders, clean coal provisions, 
and we can go about our way and take care of the priorities of this 
Nation.
  Mr. Speaker, I yield to the gentleman from New York.
  Mr. RANGEL. I thank the gentleman from California.
  For those who have been listening to this debate, you would notice 
that the Republicans have never talked about one part of this bill. I 
heard the distinguished chairman of the committee go through all of the 
things that he requested a ``yes'' for, and he never mentioned the 
giveaway for the rich in the estate tax repeal.
  Everything that he talked about dealt with helping the poor folks get 
an increase in minimum wage. Well, that is the motion to recommit. I 
think he mentioned something, other people did, about helping the poor 
coal miners. That is here. I know he talked about the carefully skilled 
extension, the tax bills that expire, the extenders for that, and that 
is in it. And so since he didn't mention the estate tax repeal, a 
motion to recommit takes it away. And so we can all start reading from 
the same page and say this is like the Thomas-Rangel bill: it takes 
care of the poor that are working, the 6 million workers that deserve a 
pay increase. It takes care of the extenders that are so badly needed 
that takes care of a lot of kids and tax incentives for disadvantaged 
workers and school teachers and school renovations. And so it does a 
lot of these good things.
  But how can we refuse to see, pardon the pun, the elephant in the 
living room? Because it is there, and that elephant is called estate 
tax repeal. And you can say it any way that you want; if you want to do 
the good things that are in this bill, package, if you will, you have 
got to buy that elephant. And we are saying that not all of us are 
prepared to do it. We can take care of those people who work every day 
and believe that this Congress should be there for them, not as 
Republicans, not as Democrats, but the Congress.
  These people deserve better than waiting until after midnight and 
taking their destiny and tying it up with an $800 billion elephant to 
provide relief for the richest in this country. I urge you to support 
the motion to recommit tonight.
  Mr. THOMAS. Mr. Speaker, I rise in opposition to the motion.
  The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
  Mr. THOMAS. Mr. Speaker, speaker after speaker after speaker on the 
other side of the aisle went in the well. What was the common plea? 
Give us a clean vote on minimum wage. Just give us a clean vote on 
minimum wage. You have got 169 pages here. They wrote it. They can't 
even write a motion to recommit that is a clean vote on the minimum 
wage. I am offended. And any other Member who is offended, vote ``no'' 
on the motion to recommit.
  Mr. THOMAS. I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. RANGEL. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on the motion to recommit will be followed by 
5-minute votes, if ordered, on passage of H.R. 5970, and conference 
report on S. 250.
  The vote was taken by electronic device, and there were--ayes 190, 
noes 220, not voting 23, as follows:

                             [Roll No. 424]

                               AYES--190

     Ackerman
     Allen
     Andrews
     Baird
     Baldwin
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Chandler
     Clay
     Cleaver
     Clyburn
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks

[[Page 16503]]


     Dingell
     Doggett
     Doyle
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lipinski
     Lofgren, Zoe
     Lowey
     Lynch
     Maloney
     Markey
     Marshall
     Matsui
     McCarthy
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Ney
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Schwartz (PA)
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Wilson (NM)
     Woolsey
     Wu
     Wynn

                               NOES--220

     Abercrombie
     Aderholt
     Akin
     Alexander
     Bachus
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilbray
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boustany
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Cole (OK)
     Conaway
     Cramer
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, Tom
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Fitzpatrick (PA)
     Flake
     Foley
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kuhl (NY)
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Matheson
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Neugebauer
     Norwood
     Nunes
     Nussle
     Osborne
     Otter
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pombo
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schmidt
     Schwarz (MI)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (NJ)
     Smith (TX)
     Sodrel
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--23

     Baca
     Baker
     Bilirakis
     Boehlert
     Buyer
     Coble
     Davis, Jo Ann
     Deal (GA)
     Evans
     Gohmert
     Granger
     Istook
     Jones (NC)
     Lewis (GA)
     Linder
     McKinney
     Meehan
     Northup
     Oxley
     Payne
     Salazar
     Stark
     Walden (OR)

                              {time}  0130

  Mr. REICHERT, Mr. BOREN, Ms. PRYCE of Ohio, and Mr. CRAMER changed 
their vote from ``aye'' to ``no.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.

                          ____________________