[Congressional Record (Bound Edition), Volume 154 (2008), Part 17]
[Senate]
[Pages 23662-23713]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 5683. Mr. BINGAMAN (for Mr. Dorgan (for himself, Mr. Bingaman, Mr. 
Akaka, Mr. Harkin, Mr. Feingold, Mrs. Boxer, Mr. Byrd, Mr. Sanders, and 
Mrs. Feinstein)) proposed an amendment to the bill H.R. 7081, to 
approve the United States-India Agreement for Cooperation on Peaceful 
Uses of Nuclear Energy, and for other purposes; as follows:

       At the end of title I, add the following:

     SEC. 106. PROHIBITION OF NUCLEAR TRADE IN EVENT OF NUCLEAR 
                   WEAPON DETONATION BY INDIA.

       Notwithstanding any other provision of law, the United 
     States may not export, transfer, or retransfer any nuclear 
     technology, material, equipment, or facility under the 
     Agreement if the Government of India detonates a nuclear 
     explosive device after the date of the enactment of this Act.

     SEC. 107. CERTIFICATION, REPORTING, AND CONTROL REQUIREMENTS 
                   IN EVENT OF NUCLEAR WEAPON DETONATION BY INDIA.

       In the event the Government of India detonates a nuclear 
     weapon after the date of the enactment of this Act, the 
     President shall--
       (1) certify to Congress that no United States technology, 
     material, equipment, or facility supplied to India under the 
     Agreement assisted with such detonation;
       (2) not later than 60 days after such detonation, submit to 
     Congress a report describing United States nuclear related 
     export controls that could be utilized with respect to 
     countries that continue nuclear trade with

[[Page 23663]]

     India to minimize any potential contribution by United States 
     exports to the nuclear weapons program of the Government of 
     India; and
       (3) fully utilize such export controls unless, not later 
     than 120 days after such detonation, Congress adopts, and 
     there is enacted, a joint resolution disapproving of the full 
     utilization of such export controls.
                                 ______
                                 
  SA 5684. Mr. DODD (for Mr. Pryor) proposed an amendment to the bill 
S. 602, to develop the next generation of parental control technology; 
as follows:
       On page 6, beginning in line 4, strike ``TECHNOLOGIES.'' 
     and insert ``TECHNOLOGIES AND EXISTING PARENTAL EMPOWERMENT 
     TOOLS.''.
       On page 6, line 12, strike ``and''.
       On page 6, line 16, strike ``offering.'' and insert 
     ``offering; and''.
       On page 6, between lines 16 and 17, insert the following:
       ``(3) the existence, availability, and use of parental 
     empowerment tools and initiatives already in the market.''.
                                 ______
                                 
  SA 5685. Mr. DODD proposed an amendment to the bill H.R. 1424, of 
1974, section 2705 of the Public Health Service Act, section 9812 of 
the Internal Revenue Code of 1986 to require equity in the provision of 
mental health and substance-related disorder benefits under group 
health plans, to prohibit discrimination on the basis of genetic 
information with respect to health insurance and employment, and for 
other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

              DIVISION A--EMERGENCY ECONOMIC STABILIZATION

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This division may be cited as the 
     ``Emergency Economic Stabilization Act of 2008''.
       (b) Table of Contents.--The table of contents for this 
     division is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.

                TITLE I--TROUBLED ASSETS RELIEF PROGRAM

Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and 
              sale proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits 
              for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief 
              Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.
Sec. 136. Temporary increase in deposit and share insurance coverage.

                  TITLE II--BUDGET-RELATED PROVISIONS

Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the 
              Congressional Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.

                       TITLE III--TAX PROVISIONS

Sec. 301. Gain or loss from sale or exchange of certain preferred 
              stock.
Sec. 302. Special rules for tax treatment of executive compensation of 
              employers participating in the troubled assets relief 
              program.
Sec. 303. Extension of exclusion of income from discharge of qualified 
              principal residence indebtedness.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to immediately provide authority and facilities that 
     the Secretary of the Treasury can use to restore liquidity 
     and stability to the financial system of the United States; 
     and
       (2) to ensure that such authority and such facilities are 
     used in a manner that--
       (A) protects home values, college funds, retirement 
     accounts, and life savings;
       (B) preserves homeownership and promotes jobs and economic 
     growth;
       (C) maximizes overall returns to the taxpayers of the 
     United States; and
       (D) provides public accountability for the exercise of such 
     authority.

     SEC. 3. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Appropriate committees of congress.--The term 
     ``appropriate committees of Congress'' means--
       (A) the Committee on Banking, Housing, and Urban Affairs, 
     the Committee on Finance, the Committee on the Budget, and 
     the Committee on Appropriations of the Senate; and
       (B) the Committee on Financial Services, the Committee on 
     Ways and Means, the Committee on the Budget, and the 
     Committee on Appropriations of the House of Representatives.
       (2) Board.--The term ``Board'' means the Board of Governors 
     of the Federal Reserve System.
       (3) Congressional support agencies.--The term 
     ``congressional support agencies'' means the Congressional 
     Budget Office and the Joint Committee on Taxation.
       (4) Corporation.--The term ``Corporation'' means the 
     Federal Deposit Insurance Corporation.
       (5) Financial institution.--The term ``financial 
     institution'' means any institution, including, but not 
     limited to, any bank, savings association, credit union, 
     security broker or dealer, or insurance company, established 
     and regulated under the laws of the United States or any 
     State, territory, or possession of the United States, the 
     District of Columbia, Commonwealth of Puerto Rico, 
     Commonwealth of Northern Mariana Islands, Guam, American 
     Samoa, or the United States Virgin Islands, and having 
     significant operations in the United States, but excluding 
     any central bank of, or institution owned by, a foreign 
     government.
       (6) Fund.--The term ``Fund'' means the Troubled Assets 
     Insurance Financing Fund established under section 102.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (8) TARP.--The term ``TARP'' means the Troubled Asset 
     Relief Program established under section 101.
       (9) Troubled assets.--The term ``troubled assets'' means--
       (A) residential or commercial mortgages and any securities, 
     obligations, or other instruments that are based on or 
     related to such mortgages, that in each case was originated 
     or issued on or before March 14, 2008, the purchase of which 
     the Secretary determines promotes financial market stability; 
     and
       (B) any other financial instrument that the Secretary, 
     after consultation with the Chairman of the Board of 
     Governors of the Federal Reserve System, determines the 
     purchase of which is necessary to promote financial market 
     stability, but only upon transmittal of such determination, 
     in writing, to the appropriate committees of Congress.

                TITLE I--TROUBLED ASSETS RELIEF PROGRAM

     SEC. 101. PURCHASES OF TROUBLED ASSETS.

       (a) Offices; Authority.--
       (1) Authority.--The Secretary is authorized to establish 
     the Troubled Asset Relief Program (or ``TARP'') to purchase, 
     and to make and fund commitments to purchase, troubled assets 
     from any financial institution, on such terms and conditions 
     as are determined by the Secretary, and in accordance with 
     this Act and the policies and procedures developed and 
     published by the Secretary.
       (2) Commencement of program.--Establishment of the policies 
     and procedures and other similar administrative requirements 
     imposed on the Secretary by this Act are not intended to 
     delay the commencement of the TARP.
       (3) Establishment of treasury office.--
       (A) In general.--The Secretary shall implement any program 
     under paragraph (1) through an Office of Financial Stability, 
     established for such purpose within the Office of Domestic 
     Finance of the Department of the Treasury, which office shall 
     be headed by an Assistant Secretary of the Treasury, 
     appointed by the President, by and with the advice and 
     consent of the Senate, except that an interim Assistant 
     Secretary may be appointed by the Secretary.
       (B) Clerical amendments.--
       (i) Title 5.--Section 5315 of title 5, United States Code, 
     is amended in the item relating

[[Page 23664]]

     to Assistant Secretaries of the Treasury, by striking ``(9)'' 
     and inserting ``(10)''.
       (ii) Title 31.--Section 301(e) of title 31, United States 
     Code, is amended by striking ``9'' and inserting ``10''.
       (b) Consultation.--In exercising the authority under this 
     section, the Secretary shall consult with the Board, the 
     Corporation, the Comptroller of the Currency, the Director of 
     the Office of Thrift Supervision, the Chairman of the 
     National Credit Union Administration Board, and the Secretary 
     of Housing and Urban Development.
       (c) Necessary Actions.--The Secretary is authorized to take 
     such actions as the Secretary deems necessary to carry out 
     the authorities in this Act, including, without limitation, 
     the following:
       (1) The Secretary shall have direct hiring authority with 
     respect to the appointment of employees to administer this 
     Act.
       (2) Entering into contracts, including contracts for 
     services authorized by section 3109 of title 5, United States 
     Code.
       (3) Designating financial institutions as financial agents 
     of the Federal Government, and such institutions shall 
     perform all such reasonable duties related to this Act as 
     financial agents of the Federal Government as may be 
     required.
       (4) In order to provide the Secretary with the flexibility 
     to manage troubled assets in a manner designed to minimize 
     cost to the taxpayers, establishing vehicles that are 
     authorized, subject to supervision by the Secretary, to 
     purchase, hold, and sell troubled assets and issue 
     obligations.
       (5) Issuing such regulations and other guidance as may be 
     necessary or appropriate to define terms or carry out the 
     authorities or purposes of this Act.
       (d) Program Guidelines.--Before the earlier of the end of 
     the 2-business-day period beginning on the date of the first 
     purchase of troubled assets pursuant to the authority under 
     this section or the end of the 45-day period beginning on the 
     date of enactment of this Act, the Secretary shall publish 
     program guidelines, including the following:
       (1) Mechanisms for purchasing troubled assets.
       (2) Methods for pricing and valuing troubled assets.
       (3) Procedures for selecting asset managers.
       (4) Criteria for identifying troubled assets for purchase.
       (e) Preventing Unjust Enrichment.--In making purchases 
     under the authority of this Act, the Secretary shall take 
     such steps as may be necessary to prevent unjust enrichment 
     of financial institutions participating in a program 
     established under this section, including by preventing the 
     sale of a troubled asset to the Secretary at a higher price 
     than what the seller paid to purchase the asset. This 
     subsection does not apply to troubled assets acquired in a 
     merger or acquisition, or a purchase of assets from a 
     financial institution in conservatorship or receivership, or 
     that has initiated bankruptcy proceedings under title 11, 
     United States Code.

     SEC. 102. INSURANCE OF TROUBLED ASSETS.

       (a) Authority.--
       (1) In general.--If the Secretary establishes the program 
     authorized under section 101, then the Secretary shall 
     establish a program to guarantee troubled assets originated 
     or issued prior to March 14, 2008, including mortgage-backed 
     securities.
       (2) Guarantees.--In establishing any program under this 
     subsection, the Secretary may develop guarantees of troubled 
     assets and the associated premiums for such guarantees. Such 
     guarantees and premiums may be determined by category or 
     class of the troubled assets to be guaranteed.
       (3) Extent of guarantee.--Upon request of a financial 
     institution, the Secretary may guarantee the timely payment 
     of principal of, and interest on, troubled assets in amounts 
     not to exceed 100 percent of such payments. Such guarantee 
     may be on such terms and conditions as are determined by the 
     Secretary, provided that such terms and conditions are 
     consistent with the purposes of this Act.
       (b) Reports.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall report to the 
     appropriate committees of Congress on the program established 
     under subsection (a).
       (c) Premiums.--
       (1) In general.--The Secretary shall collect premiums from 
     any financial institution participating in the program 
     established under subsection (a). Such premiums shall be in 
     an amount that the Secretary determines necessary to meet the 
     purposes of this Act and to provide sufficient reserves 
     pursuant to paragraph (3).
       (2) Authority to base premiums on product risk.--In 
     establishing any premium under paragraph (1), the Secretary 
     may provide for variations in such rates according to the 
     credit risk associated with the particular troubled asset 
     that is being guaranteed. The Secretary shall publish the 
     methodology for setting the premium for a class of troubled 
     assets together with an explanation of the appropriateness of 
     the class of assets for participation in the program 
     established under this section. The methodology shall ensure 
     that the premium is consistent with paragraph (3).
       (3) Minimum level.--The premiums referred to in paragraph 
     (1) shall be set by the Secretary at a level necessary to 
     create reserves sufficient to meet anticipated claims, based 
     on an actuarial analysis, and to ensure that taxpayers are 
     fully protected.
       (4) Adjustment to purchase authority.--The purchase 
     authority limit in section 115 shall be reduced by an amount 
     equal to the difference between the total of the outstanding 
     guaranteed obligations and the balance in the Troubled Assets 
     Insurance Financing Fund.
       (d) Troubled Assets Insurance Financing Fund.--
       (1) Deposits.--The Secretary shall deposit fees collected 
     under this section into the Fund established under paragraph 
     (2).
       (2) Establishment.--There is established a Troubled Assets 
     Insurance Financing Fund that shall consist of the amounts 
     collected pursuant to paragraph (1), and any balance in such 
     fund shall be invested by the Secretary in United States 
     Treasury securities, or kept in cash on hand or on deposit, 
     as necessary.
       (3) Payments from fund.--The Secretary shall make payments 
     from amounts deposited in the Fund to fulfill obligations of 
     the guarantees provided to financial institutions under 
     subsection (a).

     SEC. 103. CONSIDERATIONS.

       In exercising the authorities granted in this Act, the 
     Secretary shall take into consideration--
       (1) protecting the interests of taxpayers by maximizing 
     overall returns and minimizing the impact on the national 
     debt;
       (2) providing stability and preventing disruption to 
     financial markets in order to limit the impact on the economy 
     and protect American jobs, savings, and retirement security;
       (3) the need to help families keep their homes and to 
     stabilize communities;
       (4) in determining whether to engage in a direct purchase 
     from an individual financial institution, the long-term 
     viability of the financial institution in determining whether 
     the purchase represents the most efficient use of funds under 
     this Act;
       (5) ensuring that all financial institutions are eligible 
     to participate in the program, without discrimination based 
     on size, geography, form of organization, or the size, type, 
     and number of assets eligible for purchase under this Act;
       (6) providing financial assistance to financial 
     institutions, including those serving low- and moderate-
     income populations and other underserved communities, and 
     that have assets less than $1,000,000,000, that were well or 
     adequately capitalized as of June 30, 2008, and that as a 
     result of the devaluation of the preferred government-
     sponsored enterprises stock will drop one or more capital 
     levels, in a manner sufficient to restore the financial 
     institutions to at least an adequately capitalized level;
       (7) the need to ensure stability for United States public 
     instrumentalities, such as counties and cities, that may have 
     suffered significant increased costs or losses in the current 
     market turmoil;
       (8) protecting the retirement security of Americans by 
     purchasing troubled assets held by or on behalf of an 
     eligible retirement plan described in clause (iii), (iv), 
     (v), or (vi) of section 402(c)(8)(B) of the Internal Revenue 
     Code of 1986, except that such authority shall not extend to 
     any compensation arrangements subject to section 409A of such 
     Code; and
       (9) the utility of purchasing other real estate owned and 
     instruments backed by mortgages on multifamily properties.

     SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.

       (a) Establishment.--There is established the Financial 
     Stability Oversight Board, which shall be responsible for--
       (1) reviewing the exercise of authority under a program 
     developed in accordance with this Act, including--
       (A) policies implemented by the Secretary and the Office of 
     Financial Stability created under sections 101 and 102, 
     including the appointment of financial agents, the 
     designation of asset classes to be purchased, and plans for 
     the structure of vehicles used to purchase troubled assets; 
     and
       (B) the effect of such actions in assisting American 
     families in preserving home ownership, stabilizing financial 
     markets, and protecting taxpayers;
       (2) making recommendations, as appropriate, to the 
     Secretary regarding use of the authority under this Act; and
       (3) reporting any suspected fraud, misrepresentation, or 
     malfeasance to the Special Inspector General for the Troubled 
     Assets Relief Program or the Attorney General of the United 
     States, consistent with section 535(b) of title 28, United 
     States Code.
       (b) Membership.--The Financial Stability Oversight Board 
     shall be comprised of--
       (1) the Chairman of the Board of Governors of the Federal 
     Reserve System;
       (2) the Secretary;
       (3) the Director of the Federal Housing Finance Agency;
       (4) the Chairman of the Securities Exchange Commission; and
       (5) the Secretary of Housing and Urban Development.
       (c) Chairperson.--The chairperson of the Financial 
     Stability Oversight Board shall be

[[Page 23665]]

     elected by the members of the Board from among the members 
     other than the Secretary.
       (d) Meetings.--The Financial Stability Oversight Board 
     shall meet 2 weeks after the first exercise of the purchase 
     authority of the Secretary under this Act, and monthly 
     thereafter.
       (e) Additional Authorities.--In addition to the 
     responsibilities described in subsection (a), the Financial 
     Stability Oversight Board shall have the authority to ensure 
     that the policies implemented by the Secretary are--
       (1) in accordance with the purposes of this Act;
       (2) in the economic interests of the United States; and
       (3) consistent with protecting taxpayers, in accordance 
     with section 113(a).
       (f) Credit Review Committee.--The Financial Stability 
     Oversight Board may appoint a credit review committee for the 
     purpose of evaluating the exercise of the purchase authority 
     provided under this Act and the assets acquired through the 
     exercise of such authority, as the Financial Stability 
     Oversight Board determines appropriate.
       (g) Reports.--The Financial Stability Oversight Board shall 
     report to the appropriate committees of Congress and the 
     Congressional Oversight Panel established under section 125, 
     not less frequently than quarterly, on the matters described 
     under subsection (a)(1).
       (h) Termination.--The Financial Stability Oversight Board, 
     and its authority under this section, shall terminate on the 
     expiration of the 15-day period beginning upon the later of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 105. REPORTS.

       (a) In General.--Before the expiration of the 60-day period 
     beginning on the date of the first exercise of the authority 
     granted in section 101(a), or of the first exercise of the 
     authority granted in section 102, whichever occurs first, and 
     every 30-day period thereafter, the Secretary shall report to 
     the appropriate committees of Congress, with respect to each 
     such period--
       (1) an overview of actions taken by the Secretary, 
     including the considerations required by section 103 and the 
     efforts under section 109;
       (2) the actual obligation and expenditure of the funds 
     provided for administrative expenses by section 118 during 
     such period and the expected expenditure of such funds in the 
     subsequent period; and
       (3) a detailed financial statement with respect to the 
     exercise of authority under this Act, including--
       (A) all agreements made or renewed;
       (B) all insurance contracts entered into pursuant to 
     section 102;
       (C) all transactions occurring during such period, 
     including the types of parties involved;
       (D) the nature of the assets purchased;
       (E) all projected costs and liabilities;
       (F) operating expenses, including compensation for 
     financial agents;
       (G) the valuation or pricing method used for each 
     transaction; and
       (H) a description of the vehicles established to exercise 
     such authority.
       (b) Tranche Reports to Congress.--
       (1) Reports.--The Secretary shall provide to the 
     appropriate committees of Congress, at the times specified in 
     paragraph (2), a written report, including--
       (A) a description of all of the transactions made during 
     the reporting period;
       (B) a description of the pricing mechanism for the 
     transactions;
       (C) a justification of the price paid for and other 
     financial terms associated with the transactions;
       (D) a description of the impact of the exercise of such 
     authority on the financial system, supported, to the extent 
     possible, by specific data;
       (E) a description of challenges that remain in the 
     financial system, including any benchmarks yet to be 
     achieved; and
       (F) an estimate of additional actions under the authority 
     provided under this Act that may be necessary to address such 
     challenges.
       (2) Timing.--The report required by this subsection shall 
     be submitted not later than 7 days after the date on which 
     commitments to purchase troubled assets under the authorities 
     provided in this Act first reach an aggregate of 
     $50,000,000,000 and not later than 7 days after each 
     $50,000,000,000 interval of such commitments is reached 
     thereafter.
       (c) Regulatory Modernization Report.--The Secretary shall 
     review the current state of the financial markets and the 
     regulatory system and submit a written report to the 
     appropriate committees of Congress not later than April 30, 
     2009, analyzing the current state of the regulatory system 
     and its effectiveness at overseeing the participants in the 
     financial markets, including the over-the-counter swaps 
     market and government-sponsored enterprises, and providing 
     recommendations for improvement, including--
       (1) recommendations regarding--
       (A) whether any participants in the financial markets that 
     are currently outside the regulatory system should become 
     subject to the regulatory system; and
       (B) enhancement of the clearing and settlement of over-the-
     counter swaps; and
       (2) the rationale underlying such recommendations.
       (d) Sharing of Information.--Any report required under this 
     section shall also be submitted to the Congressional 
     Oversight Panel established under section 125.
       (e) Sunset.--The reporting requirements under this section 
     shall terminate on the later of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; 
                   REVENUES AND SALE PROCEEDS.

       (a) Exercise of Rights.--The Secretary may, at any time, 
     exercise any rights received in connection with troubled 
     assets purchased under this Act.
       (b) Management of Troubled Assets.--The Secretary shall 
     have authority to manage troubled assets purchased under this 
     Act, including revenues and portfolio risks therefrom.
       (c) Sale of Troubled Assets.--The Secretary may, at any 
     time, upon terms and conditions and at a price determined by 
     the Secretary, sell, or enter into securities loans, 
     repurchase transactions, or other financial transactions in 
     regard to, any troubled asset purchased under this Act.
       (d) Transfer to Treasury.--Revenues of, and proceeds from 
     the sale of troubled assets purchased under this Act, or from 
     the sale, exercise, or surrender of warrants or senior debt 
     instruments acquired under section 113 shall be paid into the 
     general fund of the Treasury for reduction of the public 
     debt.
       (e) Application of Sunset to Troubled Assets.--The 
     authority of the Secretary to hold any troubled asset 
     purchased under this Act before the termination date in 
     section 120, or to purchase or fund the purchase of a 
     troubled asset under a commitment entered into before the 
     termination date in section 120, is not subject to the 
     provisions of section 120.

     SEC. 107. CONTRACTING PROCEDURES.

       (a) Streamlined Process.--For purposes of this Act, the 
     Secretary may waive specific provisions of the Federal 
     Acquisition Regulation upon a determination that urgent and 
     compelling circumstances make compliance with such provisions 
     contrary to the public interest. Any such determination, and 
     the justification for such determination, shall be submitted 
     to the Committees on Oversight and Government Reform and 
     Financial Services of the House of Representatives and the 
     Committees on Homeland Security and Governmental Affairs and 
     Banking, Housing, and Urban Affairs of the Senate within 7 
     days.
       (b) Additional Contracting Requirements.--In any 
     solicitation or contract where the Secretary has, pursuant to 
     subsection (a), waived any provision of the Federal 
     Acquisition Regulation pertaining to minority contracting, 
     the Secretary shall develop and implement standards and 
     procedures to ensure, to the maximum extent practicable, the 
     inclusion and utilization of minorities (as such term is 
     defined in section 1204(c) of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
     note)) and women, and minority- and women-owned businesses 
     (as such terms are defined in section 21A(r)(4) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that 
     solicitation or contract, including contracts to asset 
     managers, servicers, property managers, and other service 
     providers or expert consultants.
       (c) Eligibility of FDIC.--Notwithstanding subsections (a) 
     and (b), the Corporation--
       (1) shall be eligible for, and shall be considered in, the 
     selection of asset managers for residential mortgage loans 
     and residential mortgage-backed securities; and
       (2) shall be reimbursed by the Secretary for any services 
     provided.

     SEC. 108. CONFLICTS OF INTEREST.

       (a) Standards Required.--The Secretary shall issue 
     regulations or guidelines necessary to address and manage or 
     to prohibit conflicts of interest that may arise in 
     connection with the administration and execution of the 
     authorities provided under this Act, including--
       (1) conflicts arising in the selection or hiring of 
     contractors or advisors, including asset managers;
       (2) the purchase of troubled assets;
       (3) the management of the troubled assets held;
       (4) post-employment restrictions on employees; and
       (5) any other potential conflict of interest, as the 
     Secretary deems necessary or appropriate in the public 
     interest.
       (b) Timing.--Regulations or guidelines required by this 
     section shall be issued as soon as practicable after the date 
     of enactment of this Act.

     SEC. 109. FORECLOSURE MITIGATION EFFORTS.

       (a) Residential Mortgage Loan Servicing Standards.--To the 
     extent that the Secretary acquires mortgages, mortgage backed 
     securities, and other assets secured by residential real 
     estate, including multifamily

[[Page 23666]]

     housing, the Secretary shall implement a plan that seeks to 
     maximize assistance for homeowners and use the authority of 
     the Secretary to encourage the servicers of the underlying 
     mortgages, considering net present value to the taxpayer, to 
     take advantage of the HOPE for Homeowners Program under 
     section 257 of the National Housing Act or other available 
     programs to minimize foreclosures. In addition, the Secretary 
     may use loan guarantees and credit enhancements to facilitate 
     loan modifications to prevent avoidable foreclosures.
       (b) Coordination.--The Secretary shall coordinate with the 
     Corporation, the Board (with respect to any mortgage or 
     mortgage-backed securities or pool of securities held, owned, 
     or controlled by or on behalf of a Federal reserve bank, as 
     provided in section 110(a)(1)(C)), the Federal Housing 
     Finance Agency, the Secretary of Housing and Urban 
     Development, and other Federal Government entities that hold 
     troubled assets to attempt to identify opportunities for the 
     acquisition of classes of troubled assets that will improve 
     the ability of the Secretary to improve the loan modification 
     and restructuring process and, where permissible, to permit 
     bona fide tenants who are current on their rent to remain in 
     their homes under the terms of the lease. In the case of a 
     mortgage on a residential rental property, the plan required 
     under this section shall include protecting Federal, State, 
     and local rental subsidies and protections, and ensuring any 
     modification takes into account the need for operating funds 
     to maintain decent and safe conditions at the property.
       (c) Consent to Reasonable Loan Modification Requests.--Upon 
     any request arising under existing investment contracts, the 
     Secretary shall consent, where appropriate, and considering 
     net present value to the taxpayer, to reasonable requests for 
     loss mitigation measures, including term extensions, rate 
     reductions, principal write downs, increases in the 
     proportion of loans within a trust or other structure allowed 
     to be modified, or removal of other limitation on 
     modifications.

     SEC. 110. ASSISTANCE TO HOMEOWNERS.

       (a) Definitions.--As used in this section--
       (1) the term ``Federal property manager'' means--
       (A) the Federal Housing Finance Agency, in its capacity as 
     conservator of the Federal National Mortgage Association and 
     the Federal Home Loan Mortgage Corporation;
       (B) the Corporation, with respect to residential mortgage 
     loans and mortgage-backed securities held by any bridge 
     depository institution pursuant to section 11(n) of the 
     Federal Deposit Insurance Act; and
       (C) the Board, with respect to any mortgage or mortgage-
     backed securities or pool of securities held, owned, or 
     controlled by or on behalf of a Federal reserve bank, other 
     than mortgages or securities held, owned, or controlled in 
     connection with open market operations under section 14 of 
     the Federal Reserve Act (12 U.S.C. 353), or as collateral for 
     an advance or discount that is not in default;
       (2) the term ``consumer'' has the same meaning as in 
     section 103 of the Truth in Lending Act (15 U.S.C. 1602);
       (3) the term ``insured depository institution'' has the 
     same meaning as in section 3 of the Federal Deposit Insurance 
     Act (12 U.S.C. 1813); and
       (4) the term ``servicer'' has the same meaning as in 
     section 6(i)(2) of the Real Estate Settlement Procedures Act 
     of 1974 (12 U.S.C. 2605(i)(2)).
       (b) Homeowner Assistance by Agencies.--
       (1) In general.--To the extent that the Federal property 
     manager holds, owns, or controls mortgages, mortgage backed 
     securities, and other assets secured by residential real 
     estate, including multifamily housing, the Federal property 
     manager shall implement a plan that seeks to maximize 
     assistance for homeowners and use its authority to encourage 
     the servicers of the underlying mortgages, and considering 
     net present value to the taxpayer, to take advantage of the 
     HOPE for Homeowners Program under section 257 of the National 
     Housing Act or other available programs to minimize 
     foreclosures.
       (2) Modifications.--In the case of a residential mortgage 
     loan, modifications made under paragraph (1) may include--
       (A) reduction in interest rates;
       (B) reduction of loan principal; and
       (C) other similar modifications.
       (3) Tenant protections.--In the case of mortgages on 
     residential rental properties, modifications made under 
     paragraph (1) shall ensure--
       (A) the continuation of any existing Federal, State, and 
     local rental subsidies and protections; and
       (B) that modifications take into account the need for 
     operating funds to maintain decent and safe conditions at the 
     property.
       (4) Timing.--Each Federal property manager shall develop 
     and begin implementation of the plan required by this 
     subsection not later than 60 days after the date of enactment 
     of this Act.
       (5) Reports to congress.--Each Federal property manager 
     shall, 60 days after the date of enactment of this Act and 
     every 30 days thereafter, report to Congress specific 
     information on the number and types of loan modifications 
     made and the number of actual foreclosures occurring during 
     the reporting period in accordance with this section.
       (6) Consultation.--In developing the plan required by this 
     subsection, the Federal property managers shall consult with 
     one another and, to the extent possible, utilize consistent 
     approaches to implement the requirements of this subsection.
       (c) Actions With Respect to Servicers.--In any case in 
     which a Federal property manager is not the owner of a 
     residential mortgage loan, but holds an interest in 
     obligations or pools of obligations secured by residential 
     mortgage loans, the Federal property manager shall--
       (1) encourage implementation by the loan servicers of loan 
     modifications developed under subsection (b); and
       (2) assist in facilitating any such modifications, to the 
     extent possible.
       (d) Limitation.--The requirements of this section shall not 
     supersede any other duty or requirement imposed on the 
     Federal property managers under otherwise applicable law.

     SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

       (a) Applicability.--Any financial institution that sells 
     troubled assets to the Secretary under this Act shall be 
     subject to the executive compensation requirements of 
     subsections (b) and (c) and the provisions under the Internal 
     Revenue Code of 1986, as provided under the amendment by 
     section 302, as applicable.
       (b) Direct Purchases.--
       (1) In general.--Where the Secretary determines that the 
     purposes of this Act are best met through direct purchases of 
     troubled assets from an individual financial institution 
     where no bidding process or market prices are available, and 
     the Secretary receives a meaningful equity or debt position 
     in the financial institution as a result of the transaction, 
     the Secretary shall require that the financial institution 
     meet appropriate standards for executive compensation and 
     corporate governance. The standards required under this 
     subsection shall be effective for the duration of the period 
     that the Secretary holds an equity or debt position in the 
     financial institution.
       (2) Criteria.--The standards required under this subsection 
     shall include--
       (A) limits on compensation that exclude incentives for 
     senior executive officers of a financial institution to take 
     unnecessary and excessive risks that threaten the value of 
     the financial institution during the period that the 
     Secretary holds an equity or debt position in the financial 
     institution;
       (B) a provision for the recovery by the financial 
     institution of any bonus or incentive compensation paid to a 
     senior executive officer based on statements of earnings, 
     gains, or other criteria that are later proven to be 
     materially inaccurate; and
       (C) a prohibition on the financial institution making any 
     golden parachute payment to its senior executive officer 
     during the period that the Secretary holds an equity or debt 
     position in the financial institution.
       (3) Definition.--For purposes of this section, the term 
     ``senior executive officer'' means an individual who is one 
     of the top 5 highly paid executives of a public company, 
     whose compensation is required to be disclosed pursuant to 
     the Securities Exchange Act of 1934, and any regulations 
     issued thereunder, and non-public company counterparts.
       (c) Auction Purchases.--Where the Secretary determines that 
     the purposes of this Act are best met through auction 
     purchases of troubled assets, and only where such purchases 
     per financial institution in the aggregate exceed 
     $300,000,000 (including direct purchases), the Secretary 
     shall prohibit, for such financial institution, any new 
     employment contract with a senior executive officer that 
     provides a golden parachute in the event of an involuntary 
     termination, bankruptcy filing, insolvency, or receivership. 
     The Secretary shall issue guidance to carry out this 
     paragraph not later than 2 months after the date of enactment 
     of this Act, and such guidance shall be effective upon 
     issuance.
       (d) Sunset.--The provisions of subsection (c) shall apply 
     only to arrangements entered into during the period during 
     which the authorities under section 101(a) are in effect, as 
     determined under section 120.

     SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL 
                   BANKS.

       The Secretary shall coordinate, as appropriate, with 
     foreign financial authorities and central banks to work 
     toward the establishment of similar programs by such 
     authorities and central banks. To the extent that such 
     foreign financial authorities or banks hold troubled assets 
     as a result of extending financing to financial institutions 
     that have failed or defaulted on such financing, such 
     troubled assets qualify for purchase under section 101.

     SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF 
                   BENEFITS FOR TAXPAYERS.

       (a) Long-Term Costs and Benefits.--
       (1) Minimizing negative impact.--The Secretary shall use 
     the authority under this Act in a manner that will minimize 
     any potential long-term negative impact on the taxpayer, 
     taking into account the direct outlays, potential long-term 
     returns on assets

[[Page 23667]]

     purchased, and the overall economic benefits of the program, 
     including economic benefits due to improvements in economic 
     activity and the availability of credit, the impact on the 
     savings and pensions of individuals, and reductions in losses 
     to the Federal Government.
       (2) Authority.--In carrying out paragraph (1), the 
     Secretary shall--
       (A) hold the assets to maturity or for resale for and until 
     such time as the Secretary determines that the market is 
     optimal for selling such assets, in order to maximize the 
     value for taxpayers; and
       (B) sell such assets at a price that the Secretary 
     determines, based on available financial analysis, will 
     maximize return on investment for the Federal Government.
       (3) Private sector participation.--The Secretary shall 
     encourage the private sector to participate in purchases of 
     troubled assets, and to invest in financial institutions, 
     consistent with the provisions of this section.
       (b) Use of Market Mechanisms.--In making purchases under 
     this Act, the Secretary shall--
       (1) make such purchases at the lowest price that the 
     Secretary determines to be consistent with the purposes of 
     this Act; and
       (2) maximize the efficiency of the use of taxpayer 
     resources by using market mechanisms, including auctions or 
     reverse auctions, where appropriate.
       (c) Direct Purchases.--If the Secretary determines that use 
     of a market mechanism under subsection (b) is not feasible or 
     appropriate, and the purposes of the Act are best met through 
     direct purchases from an individual financial institution, 
     the Secretary shall pursue additional measures to ensure that 
     prices paid for assets are reasonable and reflect the 
     underlying value of the asset.
       (d) Conditions on Purchase Authority for Warrants and Debt 
     Instruments.--
       (1) In general.--The Secretary may not purchase, or make 
     any commitment to purchase, any troubled asset under the 
     authority of this Act, unless the Secretary receives from the 
     financial institution from which such assets are to be 
     purchased--
       (A) in the case of a financial institution, the securities 
     of which are traded on a national securities exchange, a 
     warrant giving the right to the Secretary to receive 
     nonvoting common stock or preferred stock in such financial 
     institution, or voting stock with respect to which, the 
     Secretary agrees not to exercise voting power, as the 
     Secretary determines appropriate; or
       (B) in the case of any financial institution other than one 
     described in subparagraph (A), a warrant for common or 
     preferred stock, or a senior debt instrument from such 
     financial institution, as described in paragraph (2)(C).
       (2) Terms and conditions.--The terms and conditions of any 
     warrant or senior debt instrument required under paragraph 
     (1) shall meet the following requirements:
       (A) Purposes.--Such terms and conditions shall, at a 
     minimum, be designed--
       (i) to provide for reasonable participation by the 
     Secretary, for the benefit of taxpayers, in equity 
     appreciation in the case of a warrant or other equity 
     security, or a reasonable interest rate premium, in the case 
     of a debt instrument; and
       (ii) to provide additional protection for the taxpayer 
     against losses from sale of assets by the Secretary under 
     this Act and the administrative expenses of the TARP.
       (B) Authority to sell, exercise, or surrender.--The 
     Secretary may sell, exercise, or surrender a warrant or any 
     senior debt instrument received under this subsection, based 
     on the conditions established under subparagraph (A).
       (C) Conversion.--The warrant shall provide that if, after 
     the warrant is received by the Secretary under this 
     subsection, the financial institution that issued the warrant 
     is no longer listed or traded on a national securities 
     exchange or securities association, as described in paragraph 
     (1)(A), such warrants shall convert to senior debt, or 
     contain appropriate protections for the Secretary to ensure 
     that the Treasury is appropriately compensated for the value 
     of the warrant, in an amount determined by the Secretary.
       (D) Protections.--Any warrant representing securities to be 
     received by the Secretary under this subsection shall contain 
     anti-dilution provisions of the type employed in capital 
     market transactions, as determined by the Secretary. Such 
     provisions shall protect the value of the securities from 
     market transactions such as stock splits, stock 
     distributions, dividends, and other distributions, mergers, 
     and other forms of reorganization or recapitalization.
       (E) Exercise price.--The exercise price for any warrant 
     issued pursuant to this subsection shall be set by the 
     Secretary, in the interest of the taxpayers.
       (F) Sufficiency.--The financial institution shall guarantee 
     to the Secretary that it has authorized shares of nonvoting 
     stock available to fulfill its obligations under this 
     subsection. Should the financial institution not have 
     sufficient authorized shares, including preferred shares that 
     may carry dividend rights equal to a multiple number of 
     common shares, the Secretary may, to the extent necessary, 
     accept a senior debt note in an amount, and on such terms as 
     will compensate the Secretary with equivalent value, in the 
     event that a sufficient shareholder vote to authorize the 
     necessary additional shares cannot be obtained.
       (3) Exceptions.--
       (A) De minimis.--The Secretary shall establish de minimis 
     exceptions to the requirements of this subsection, based on 
     the size of the cumulative transactions of troubled assets 
     purchased from any one financial institution for the duration 
     of the program, at not more than $100,000,000.
       (B) Other exceptions.--The Secretary shall establish an 
     exception to the requirements of this subsection and 
     appropriate alternative requirements for any participating 
     financial institution that is legally prohibited from issuing 
     securities and debt instruments, so as not to allow 
     circumvention of the requirements of this section.

     SEC. 114. MARKET TRANSPARENCY.

       (a) Pricing.--To facilitate market transparency, the 
     Secretary shall make available to the public, in electronic 
     form, a description, amounts, and pricing of assets acquired 
     under this Act, within 2 business days of purchase, trade, or 
     other disposition.
       (b) Disclosure.--For each type of financial institutions 
     that sells troubled assets to the Secretary under this Act, 
     the Secretary shall determine whether the public disclosure 
     required for such financial institutions with respect to off-
     balance sheet transactions, derivatives instruments, 
     contingent liabilities, and similar sources of potential 
     exposure is adequate to provide to the public sufficient 
     information as to the true financial position of the 
     institutions. If such disclosure is not adequate for that 
     purpose, the Secretary shall make recommendations for 
     additional disclosure requirements to the relevant 
     regulators.

     SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.

       (a) Authority.--The authority of the Secretary to purchase 
     troubled assets under this Act shall be limited as follows:
       (1) Effective upon the date of enactment of this Act, such 
     authority shall be limited to $250,000,000,000 outstanding at 
     any one time.
       (2) If at any time, the President submits to the Congress a 
     written certification that the Secretary needs to exercise 
     the authority under this paragraph, effective upon such 
     submission, such authority shall be limited to 
     $350,000,000,000 outstanding at any one time.
       (3) If, at any time after the certification in paragraph 
     (2) has been made, the President transmits to the Congress a 
     written report detailing the plan of the Secretary to 
     exercise the authority under this paragraph, unless there is 
     enacted, within 15 calendar days of such transmission, a 
     joint resolution described in subsection (c), effective upon 
     the expiration of such 15-day period, such authority shall be 
     limited to $700,000,000,000 outstanding at any one time.
       (b) Aggregation of Purchase Prices.--The amount of troubled 
     assets purchased by the Secretary outstanding at any one time 
     shall be determined for purposes of the dollar amount 
     limitations under subsection (a) by aggregating the purchase 
     prices of all troubled assets held.
       (c) Joint Resolution of Disapproval.--
       (1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may not exercise any authority to 
     make purchases under this Act with regard to any amount in 
     excess of $350,000,000,000 previously obligated, as described 
     in this section if, within 15 calendar days after the date on 
     which Congress receives a report of the plan of the Secretary 
     described in subsection (a)(3), there is enacted into law a 
     joint resolution disapproving the plan of the Secretary with 
     respect to such additional amount.
       (2) Contents of joint resolution.--For the purpose of this 
     section, the term ``joint resolution'' means only a joint 
     resolution--
       (A) that is introduced not later than 3 calendar days after 
     the date on which the report of the plan of the Secretary 
     referred to in subsection (a)(3) is received by Congress;
       (B) which does not have a preamble;
       (C) the title of which is as follows: ``Joint resolution 
     relating to the disapproval of obligations under the 
     Emergency Economic Stabilization Act of 2008''; and
       (D) the matter after the resolving clause of which is as 
     follows: ``That Congress disapproves the obligation of any 
     amount exceeding the amounts obligated as described in 
     paragraphs (1) and (2) of section 115(a) of the Emergency 
     Economic Stabilization Act of 2008.''.
       (d) Fast Track Consideration in House of Representatives.--
       (1) Reconvening.--Upon receipt of a report under subsection 
     (a)(3), the Speaker, if the House would otherwise be 
     adjourned, shall notify the Members of the House that, 
     pursuant to this section, the House shall convene not later 
     than the second calendar day after receipt of such report;
       (2) Reporting and discharge.--Any committee of the House of 
     Representatives to which a joint resolution is referred shall 
     report it to the House not later than 5 calendar days after 
     the date of receipt of the report described in subsection 
     (a)(3). If a committee fails to report the joint resolution 
     within that period, the committee shall be discharged from 
     further consideration of the joint resolution and the joint 
     resolution shall be referred to the appropriate calendar.

[[Page 23668]]

       (3) Proceeding to consideration.--After each committee 
     authorized to consider a joint resolution reports it to the 
     House or has been discharged from its consideration, it shall 
     be in order, not later than the sixth day after Congress 
     receives the report described in subsection (a)(3), to move 
     to proceed to consider the joint resolution in the House. All 
     points of order against the motion are waived. Such a motion 
     shall not be in order after the House has disposed of a 
     motion to proceed on the joint resolution. The previous 
     question shall be considered as ordered on the motion to its 
     adoption without intervening motion. The motion shall not be 
     debatable. A motion to reconsider the vote by which the 
     motion is disposed of shall not be in order.
       (4) Consideration.--The joint resolution shall be 
     considered as read. All points of order against the joint 
     resolution and against its consideration are waived. The 
     previous question shall be considered as ordered on the joint 
     resolution to its passage without intervening motion except 
     two hours of debate equally divided and controlled by the 
     proponent and an opponent. A motion to reconsider the vote on 
     passage of the joint resolution shall not be in order.
       (e) Fast Track Consideration in Senate.--
       (1) Reconvening.--Upon receipt of a report under subsection 
     (a)(3), if the Senate has adjourned or recessed for more than 
     2 days, the majority leader of the Senate, after consultation 
     with the minority leader of the Senate, shall notify the 
     Members of the Senate that, pursuant to this section, the 
     Senate shall convene not later than the second calendar day 
     after receipt of such message.
       (2) Placement on calendar.--Upon introduction in the 
     Senate, the joint resolution shall be placed immediately on 
     the calendar.
       (3) Floor consideration.--
       (A) In general.--Notwithstanding Rule XXII of the Standing 
     Rules of the Senate, it is in order at any time during the 
     period beginning on the 4th day after the date on which 
     Congress receives a report of the plan of the Secretary 
     described in subsection (a)(3) and ending on the 6th day 
     after the date on which Congress receives a report of the 
     plan of the Secretary described in subsection (a)(3) (even 
     though a previous motion to the same effect has been 
     disagreed to) to move to proceed to the consideration of the 
     joint resolution, and all points of order against the joint 
     resolution (and against consideration of the joint 
     resolution) are waived. The motion to proceed is not 
     debatable. The motion is not subject to a motion to postpone. 
     A motion to reconsider the vote by which the motion is agreed 
     to or disagreed to shall not be in order. If a motion to 
     proceed to the consideration of the resolution is agreed to, 
     the joint resolution shall remain the unfinished business 
     until disposed of.
       (B) Debate.--Debate on the joint resolution, and on all 
     debatable motions and appeals in connection therewith, shall 
     be limited to not more than 10 hours, which shall be divided 
     equally between the majority and minority leaders or their 
     designees. A motion further to limit debate is in order and 
     not debatable. An amendment to, or a motion to postpone, or a 
     motion to proceed to the consideration of other business, or 
     a motion to recommit the joint resolution is not in order.
       (C) Vote on passage.--The vote on passage shall occur 
     immediately following the conclusion of the debate on a joint 
     resolution, and a single quorum call at the conclusion of the 
     debate if requested in accordance with the rules of the 
     Senate.
       (D) Rulings of the chair on procedure.--Appeals from the 
     decisions of the Chair relating to the application of the 
     rules of the Senate, as the case may be, to the procedure 
     relating to a joint resolution shall be decided without 
     debate.
       (f) Rules Relating to Senate and House of 
     Representatives.--
       (1) Coordination with action by other house.--If, before 
     the passage by one House of a joint resolution of that House, 
     that House receives from the other House a joint resolution, 
     then the following procedures shall apply:
       (A) The joint resolution of the other House shall not be 
     referred to a committee.
       (B) With respect to a joint resolution of the House 
     receiving the resolution--
       (i) the procedure in that House shall be the same as if no 
     joint resolution had been received from the other House; but
       (ii) the vote on passage shall be on the joint resolution 
     of the other House.
       (2) Treatment of joint resolution of other house.--If one 
     House fails to introduce or consider a joint resolution under 
     this section, the joint resolution of the other House shall 
     be entitled to expedited floor procedures under this section.
       (3) Treatment of companion measures.--If, following passage 
     of the joint resolution in the Senate, the Senate then 
     receives the companion measure from the House of 
     Representatives, the companion measure shall not be 
     debatable.
       (4) Consideration after passage.--
       (A) In general.--If Congress passes a joint resolution, the 
     period beginning on the date the President is presented with 
     the joint resolution and ending on the date the President 
     takes action with respect to the joint resolution shall be 
     disregarded in computing the 15-calendar day period described 
     in subsection (a)(3).
       (B) Vetoes.--If the President vetoes the joint resolution--
       (i) the period beginning on the date the President vetoes 
     the joint resolution and ending on the date the Congress 
     receives the veto message with respect to the joint 
     resolution shall be disregarded in computing the 15-calendar 
     day period described in subsection (a)(3), and
       (ii) debate on a veto message in the Senate under this 
     section shall be 1 hour equally divided between the majority 
     and minority leaders or their designees.
       (5) Rules of house of representatives and senate.--This 
     subsection and subsections (c), (d), and (e) are enacted by 
     Congress--
       (A) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a joint resolution, and it 
     supersedes other rules only to the extent that it is 
     inconsistent with such rules; and
       (B) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

     SEC. 116. OVERSIGHT AND AUDITS.

       (a) Comptroller General Oversight.--
       (1) Scope of oversight.--The Comptroller General of the 
     United States shall, upon establishment of the troubled 
     assets relief program under this Act (in this section 
     referred to as the ``TARP''), commence ongoing oversight of 
     the activities and performance of the TARP and of any agents 
     and representatives of the TARP (as related to the agent or 
     representative's activities on behalf of or under the 
     authority of the TARP), including vehicles established by the 
     Secretary under this Act. The subjects of such oversight 
     shall include the following:
       (A) The performance of the TARP in meeting the purposes of 
     this Act, particularly those involving--
       (i) foreclosure mitigation;
       (ii) cost reduction;
       (iii) whether it has provided stability or prevented 
     disruption to the financial markets or the banking system; 
     and
       (iv) whether it has protected taxpayers.
       (B) The financial condition and internal controls of the 
     TARP, its representatives and agents.
       (C) Characteristics of transactions and commitments entered 
     into, including transaction type, frequency, size, prices 
     paid, and all other relevant terms and conditions, and the 
     timing, duration and terms of any future commitments to 
     purchase assets.
       (D) Characteristics and disposition of acquired assets, 
     including type, acquisition price, current market value, sale 
     prices and terms, and use of proceeds from sales.
       (E) Efficiency of the operations of the TARP in the use of 
     appropriated funds.
       (F) Compliance with all applicable laws and regulations by 
     the TARP, its agents and representatives.
       (G) The efforts of the TARP to prevent, identify, and 
     minimize conflicts of interest involving any agent or 
     representative performing activities on behalf of or under 
     the authority of the TARP.
       (H) The efficacy of contracting procedures pursuant to 
     section 107(b), including, as applicable, the efforts of the 
     TARP in evaluating proposals for inclusion and contracting to 
     the maximum extent possible of minorities (as such term is 
     defined in 1204(c) of the Financial Institutions Reform, 
     Recovery, and Enhancement Act of 1989 (12 U.S.C. 1811 note), 
     women, and minority- and women-owned businesses, including 
     ascertaining and reporting the total amount of fees paid and 
     other value delivered by the TARP to all of its agents and 
     representatives, and such amounts paid or delivered to such 
     firms that are minority- and women-owned businesses (as such 
     terms are defined in section 21A of the Federal Home Loan 
     Bank Act (12 U.S.C. 1441a)).
       (2) Conduct and administration of oversight.--
       (A) GAO presence.--The Secretary shall provide the 
     Comptroller General with appropriate space and facilities in 
     the Department of the Treasury as necessary to facilitate 
     oversight of the TARP until the termination date established 
     in section 120.
       (B) Access to records.--To the extent otherwise consistent 
     with law, the Comptroller General shall have access, upon 
     request, to any information, data, schedules, books, 
     accounts, financial records, reports, files, electronic 
     communications, or other papers, things, or property 
     belonging to or in use by the TARP, or any vehicles 
     established by the Secretary under this Act, and to the 
     officers, directors, employees, independent public 
     accountants, financial advisors, and other agents and 
     representatives of the TARP (as related to the agent or 
     representative's activities on behalf of or under the 
     authority of the TARP) or any such vehicle at such reasonable 
     time as the Comptroller General may request. The Comptroller 
     General shall be afforded full facilities for

[[Page 23669]]

     verifying transactions with the balances or securities held 
     by depositaries, fiscal agents, and custodians. The 
     Comptroller General may make and retain copies of such books, 
     accounts, and other records as the Comptroller General deems 
     appropriate.
       (C) Reimbursement of costs.--The Treasury shall reimburse 
     the Government Accountability Office for the full cost of any 
     such oversight activities as billed therefor by the 
     Comptroller General of the United States. Such reimbursements 
     shall be credited to the appropriation account ``Salaries and 
     Expenses, Government Accountability Office'' current when the 
     payment is received and remain available until expended.
       (3) Reporting.--The Comptroller General shall submit 
     reports of findings under this section, regularly and no less 
     frequently than once every 60 days, to the appropriate 
     committees of Congress, and the Special Inspector General for 
     the Troubled Asset Relief Program established under this Act 
     on the activities and performance of the TARP. The 
     Comptroller may also submit special reports under this 
     subsection as warranted by the findings of its oversight 
     activities.
       (b) Comptroller General Audits.--
       (1) Annual audit.--The TARP shall annually prepare and 
     issue to the appropriate committees of Congress and the 
     public audited financial statements prepared in accordance 
     with generally accepted accounting principles, and the 
     Comptroller General shall annually audit such statements in 
     accordance with generally accepted auditing standards. The 
     Treasury shall reimburse the Government Accountability Office 
     for the full cost of any such audit as billed therefor by the 
     Comptroller General. Such reimbursements shall be credited to 
     the appropriation account ``Salaries and Expenses, Government 
     Accountability Office'' current when the payment is received 
     and remain available until expended. The financial statements 
     prepared under this paragraph shall be on the fiscal year 
     basis prescribed under section 1102 of title 31, United 
     States Code.
       (2) Authority.--The Comptroller General may audit the 
     programs, activities, receipts, expenditures, and financial 
     transactions of the TARP and any agents and representatives 
     of the TARP (as related to the agent or representative's 
     activities on behalf of or under the authority of the TARP), 
     including vehicles established by the Secretary under this 
     Act.
       (3) Corrective responses to audit problems.--The TARP 
     shall--
       (A) take action to address deficiencies identified by the 
     Comptroller General or other auditor engaged by the TARP; or
       (B) certify to appropriate committees of Congress that no 
     action is necessary or appropriate.
       (c) Internal Control.--
       (1) Establishment.--The TARP shall establish and maintain 
     an effective system of internal control, consistent with the 
     standards prescribed under section 3512(c) of title 31, 
     United States Code, that provides reasonable assurance of--
       (A) the effectiveness and efficiency of operations, 
     including the use of the resources of the TARP;
       (B) the reliability of financial reporting, including 
     financial statements and other reports for internal and 
     external use; and
       (C) compliance with applicable laws and regulations.
       (2) Reporting.--In conjunction with each annual financial 
     statement issued under this section, the TARP shall--
       (A) state the responsibility of management for establishing 
     and maintaining adequate internal control over financial 
     reporting; and
       (B) state its assessment, as of the end of the most recent 
     year covered by such financial statement of the TARP, of the 
     effectiveness of the internal control over financial 
     reporting.
       (d) Sharing of Information.--Any report or audit required 
     under this section shall also be submitted to the 
     Congressional Oversight Panel established under section 125.
       (e) Termination.--Any oversight, reporting, or audit 
     requirement under this section shall terminate on the later 
     of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.

       (a) Study.--The Comptroller General shall undertake a study 
     to determine the extent to which leverage and sudden 
     deleveraging of financial institutions was a factor behind 
     the current financial crisis.
       (b) Content.--The study required by this section shall 
     include--
       (1) an analysis of the roles and responsibilities of the 
     Board, the Securities and Exchange Commission, the Secretary, 
     and other Federal banking agencies with respect to monitoring 
     leverage and acting to curtail excessive leveraging;
       (2) an analysis of the authority of the Board to regulate 
     leverage, including by setting margin requirements, and what 
     process the Board used to decide whether or not to use its 
     authority;
       (3) an analysis of any usage of the margin authority by the 
     Board; and
       (4) recommendations for the Board and appropriate 
     committees of Congress with respect to the existing authority 
     of the Board.
       (c) Report.--Not later than June 1, 2009, the Comptroller 
     General shall complete and submit a report on the study 
     required by this section to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives.
       (d) Sharing of Information.--Any reports required under 
     this section shall also be submitted to the Congressional 
     Oversight Panel established under section 125.

     SEC. 118. FUNDING.

       For the purpose of the authorities granted in this Act, and 
     for the costs of administering those authorities, the 
     Secretary may use the proceeds of the sale of any securities 
     issued under chapter 31 of title 31, United States Code, and 
     the purposes for which securities may be issued under chapter 
     31 of title 31, United States Code, are extended to include 
     actions authorized by this Act, including the payment of 
     administrative expenses. Any funds expended or obligated by 
     the Secretary for actions authorized by this Act, including 
     the payment of administrative expenses, shall be deemed 
     appropriated at the time of such expenditure or obligation.

     SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.

       (a) Judicial Review.--
       (1) Standard.--Actions by the Secretary pursuant to the 
     authority of this Act shall be subject to chapter 7 of title 
     5, United States Code, including that such final actions 
     shall be held unlawful and set aside if found to be 
     arbitrary, capricious, an abuse of discretion, or not in 
     accordance with law.
       (2) Limitations on equitable relief.--
       (A) Injunction.--No injunction or other form of equitable 
     relief shall be issued against the Secretary for actions 
     pursuant to section 101, 102, 106, and 109, other than to 
     remedy a violation of the Constitution.
       (B) Temporary restraining order.--Any request for a 
     temporary restraining order against the Secretary for actions 
     pursuant to this Act shall be considered and granted or 
     denied by the court within 3 days of the date of the request.
       (C) Preliminary injunction.--Any request for a preliminary 
     injunction against the Secretary for actions pursuant to this 
     Act shall be considered and granted or denied by the court on 
     an expedited basis consistent with the provisions of rule 
     65(b)(3) of the Federal Rules of Civil Procedure, or any 
     successor thereto.
       (D) Permanent injunction.--Any request for a permanent 
     injunction against the Secretary for actions pursuant to this 
     Act shall be considered and granted or denied by the court on 
     an expedited basis. Whenever possible, the court shall 
     consolidate trial on the merits with any hearing on a request 
     for a preliminary injunction, consistent with the provisions 
     of rule 65(a)(2) of the Federal Rules of Civil Procedure, or 
     any successor thereto.
       (3) Limitation on actions by participating companies.--No 
     action or claims may be brought against the Secretary by any 
     person that divests its assets with respect to its 
     participation in a program under this Act, except as provided 
     in paragraph (1), other than as expressly provided in a 
     written contract with the Secretary.
       (4) Stays.--Any injunction or other form of equitable 
     relief issued against the Secretary for actions pursuant to 
     section 101, 102, 106, and 109, shall be automatically 
     stayed. The stay shall be lifted unless the Secretary seeks a 
     stay from a higher court within 3 calendar days after the 
     date on which the relief is issued.
       (b) Related Matters.--
       (1) Treatment of homeowners' rights.--The terms of any 
     residential mortgage loan that is part of any purchase by the 
     Secretary under this Act shall remain subject to all claims 
     and defenses that would otherwise apply, notwithstanding the 
     exercise of authority by the Secretary under this Act.
       (2) Savings clause.--Any exercise of the authority of the 
     Secretary pursuant to this Act shall not impair the claims or 
     defenses that would otherwise apply with respect to persons 
     other than the Secretary. Except as established in any 
     contract, a servicer of pooled residential mortgages owes any 
     duty to determine whether the net present value of the 
     payments on the loan, as modified, is likely to be greater 
     than the anticipated net recovery that would result from 
     foreclosure to all investors and holders of beneficial 
     interests in such investment, but not to any individual or 
     groups of investors or beneficial interest holders, and shall 
     be deemed to act in the best interests of all such investors 
     or holders of beneficial interests if the servicer agrees to 
     or implements a modification or workout plan when the 
     servicer takes reasonable loss mitigation actions, including 
     partial payments.

     SEC. 120. TERMINATION OF AUTHORITY.

       (a) Termination.--The authorities provided under sections 
     101(a), excluding section 101(a)(3), and 102 shall terminate 
     on December 31, 2009.
       (b) Extension Upon Certification.--The Secretary, upon 
     submission of a written certification to Congress, may extend 
     the authority provided under this Act to expire not

[[Page 23670]]

     later than 2 years from the date of enactment of this Act. 
     Such certification shall include a justification of why the 
     extension is necessary to assist American families and 
     stabilize financial markets, as well as the expected cost to 
     the taxpayers for such an extension.

     SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET 
                   RELIEF PROGRAM.

       (a) Office of Inspector General.--There is hereby 
     established the Office of the Special Inspector General for 
     the Troubled Asset Relief Program.
       (b) Appointment of Inspector General; Removal.--(1) The 
     head of the Office of the Special Inspector General for the 
     Troubled Asset Relief Program is the Special Inspector 
     General for the Troubled Asset Relief Program (in this 
     section referred to as the ``Special Inspector General''), 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate.
       (2) The appointment of the Special Inspector General shall 
     be made on the basis of integrity and demonstrated ability in 
     accounting, auditing, financial analysis, law, management 
     analysis, public administration, or investigations.
       (3) The nomination of an individual as Special Inspector 
     General shall be made as soon as practicable after the 
     establishment of any program under sections 101 and 102.
       (4) The Special Inspector General shall be removable from 
     office in accordance with the provisions of section 3(b) of 
     the Inspector General Act of 1978 (5 U.S.C. App.).
       (5) For purposes of section 7324 of title 5, United States 
     Code, the Special Inspector General shall not be considered 
     an employee who determines policies to be pursued by the 
     United States in the nationwide administration of Federal 
     law.
       (6) The annual rate of basic pay of the Special Inspector 
     General shall be the annual rate of basic pay for an 
     Inspector General under section 3(e) of the Inspector General 
     Act of 1978 (5 U.S.C. App.).
       (c) Duties.--(1) It shall be the duty of the Special 
     Inspector General to conduct, supervise, and coordinate 
     audits and investigations of the purchase, management, and 
     sale of assets by the Secretary of the Treasury under any 
     program established by the Secretary under section 101, and 
     the management by the Secretary of any program established 
     under section 102, including by collecting and summarizing 
     the following information:
       (A) A description of the categories of troubled assets 
     purchased or otherwise procured by the Secretary.
       (B) A listing of the troubled assets purchased in each such 
     category described under subparagraph (A).
       (C) An explanation of the reasons the Secretary deemed it 
     necessary to purchase each such troubled asset.
       (D) A listing of each financial institution that such 
     troubled assets were purchased from.
       (E) A listing of and detailed biographical information on 
     each person or entity hired to manage such troubled assets.
       (F) A current estimate of the total amount of troubled 
     assets purchased pursuant to any program established under 
     section 101, the amount of troubled assets on the books of 
     the Treasury, the amount of troubled assets sold, and the 
     profit and loss incurred on each sale or disposition of each 
     such troubled asset.
       (G) A listing of the insurance contracts issued under 
     section 102.
       (2) The Special Inspector General shall establish, 
     maintain, and oversee such systems, procedures, and controls 
     as the Special Inspector General considers appropriate to 
     discharge the duty under paragraph (1).
       (3) In addition to the duties specified in paragraphs (1) 
     and (2), the Inspector General shall also have the duties and 
     responsibilities of inspectors general under the Inspector 
     General Act of 1978.
       (d) Powers and Authorities.--(1) In carrying out the duties 
     specified in subsection (c), the Special Inspector General 
     shall have the authorities provided in section 6 of the 
     Inspector General Act of 1978.
       (2) The Special Inspector General shall carry out the 
     duties specified in subsection (c)(1) in accordance with 
     section 4(b)(1) of the Inspector General Act of 1978.
       (e) Personnel, Facilities, and Other Resources.--(1) The 
     Special Inspector General may select, appoint, and employ 
     such officers and employees as may be necessary for carrying 
     out the duties of the Special Inspector General, subject to 
     the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and the provisions 
     of chapter 51 and subchapter III of chapter 53 of such title, 
     relating to classification and General Schedule pay rates.
       (2) The Special Inspector General may obtain services as 
     authorized by section 3109 of title 5, United States Code, at 
     daily rates not to exceed the equivalent rate prescribed for 
     grade GS-15 of the General Schedule by section 5332 of such 
     title.
       (3) The Special Inspector General may enter into contracts 
     and other arrangements for audits, studies, analyses, and 
     other services with public agencies and with private persons, 
     and make such payments as may be necessary to carry out the 
     duties of the Inspector General.
       (4)(A) Upon request of the Special Inspector General for 
     information or assistance from any department, agency, or 
     other entity of the Federal Government, the head of such 
     entity shall, insofar as is practicable and not in 
     contravention of any existing law, furnish such information 
     or assistance to the Special Inspector General, or an 
     authorized designee.
       (B) Whenever information or assistance requested by the 
     Special Inspector General is, in the judgment of the Special 
     Inspector General, unreasonably refused or not provided, the 
     Special Inspector General shall report the circumstances to 
     the appropriate committees of Congress without delay.
       (f) Reports.--(1) Not later than 60 days after the 
     confirmation of the Special Inspector General, and every 
     calendar quarter thereafter, the Special Inspector General 
     shall submit to the appropriate committees of Congress a 
     report summarizing the activities of the Special Inspector 
     General during the 120-day period ending on the date of such 
     report. Each report shall include, for the period covered by 
     such report, a detailed statement of all purchases, 
     obligations, expenditures, and revenues associated with any 
     program established by the Secretary of the Treasury under 
     sections 101 and 102, as well as the information collected 
     under subsection (c)(1).
       (2) Nothing in this subsection shall be construed to 
     authorize the public disclosure of information that is--
       (A) specifically prohibited from disclosure by any other 
     provision of law;
       (B) specifically required by Executive order to be 
     protected from disclosure in the interest of national defense 
     or national security or in the conduct of foreign affairs; or
       (C) a part of an ongoing criminal investigation.
       (3) Any reports required under this section shall also be 
     submitted to the Congressional Oversight Panel established 
     under section 125.
       (g) Funding.--(1) Of the amounts made available to the 
     Secretary of the Treasury under section 118, $50,000,000 
     shall be available to the Special Inspector General to carry 
     out this section.
       (2) The amount available under paragraph (1) shall remain 
     available until expended.
       (h) Termination.--The Office of the Special Inspector 
     General shall terminate on the later of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.

       Subsection (b) of section 3101 of title 31, United States 
     Code, is amended by striking out the dollar limitation 
     contained in such subsection and inserting 
     ``$11,315,000,000,000''.

     SEC. 123. CREDIT REFORM.

       (a) In General.--Subject to subsection (b), the costs of 
     purchases of troubled assets made under section 101(a) and 
     guarantees of troubled assets under section 102, and any cash 
     flows associated with the activities authorized in section 
     102 and subsections (a), (b), and (c) of section 106 shall be 
     determined as provided under the Federal Credit Reform Act of 
     1990 (2 U.S.C. 661 et. seq.).
       (b) Costs.--For the purposes of section 502(5) of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))--
       (1) the cost of troubled assets and guarantees of troubled 
     assets shall be calculated by adjusting the discount rate in 
     section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and
       (2) the cost of a modification of a troubled asset or 
     guarantee of a troubled asset shall be the difference between 
     the current estimate consistent with paragraph (1) under the 
     terms of the troubled asset or guarantee of the troubled 
     asset and the current estimate consistent with paragraph (1) 
     under the terms of the troubled asset or guarantee of the 
     troubled asset, as modified.

     SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.

       Section 257 of the National Housing Act (12 U.S.C. 1715z-
     23) is amended--
       (1) in subsection (e)--
       (A) in paragraph (1)(B), by inserting before ``a ratio'' 
     the following: ``, or thereafter is likely to have, due to 
     the terms of the mortgage being reset,'';
       (B) in paragraph (2)(B), by inserting before the period at 
     the end ``(or such higher percentage as the Board determines, 
     in the discretion of the Board)'';
       (C) in paragraph (4)(A)--
       (i) in the first sentence, by inserting after ``insured 
     loan'' the following: ``and any payments made under this 
     paragraph,''; and
       (ii) by adding at the end the following: ``Such actions may 
     include making payments, which shall be accepted as payment 
     in full of all indebtedness under the eligible mortgage, to 
     any holder of an existing subordinate mortgage, in lieu of 
     any future appreciation payments authorized under 
     subparagraph (B).''; and
       (2) in subsection (w), by inserting after ``administrative 
     costs'' the following: ``and payments pursuant to subsection 
     (e)(4)(A)''.

[[Page 23671]]



     SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.

       (a) Establishment.--There is hereby established the 
     Congressional Oversight Panel (hereafter in this section 
     referred to as the ``Oversight Panel'') as an establishment 
     in the legislative branch.
       (b) Duties.--The Oversight Panel shall review the current 
     state of the financial markets and the regulatory system and 
     submit the following reports to Congress:
       (1) Regular reports.--
       (A) In general.--Regular reports of the Oversight Panel 
     shall include the following:
       (i) The use by the Secretary of authority under this Act, 
     including with respect to the use of contracting authority 
     and administration of the program.
       (ii) The impact of purchases made under the Act on the 
     financial markets and financial institutions.
       (iii) The extent to which the information made available on 
     transactions under the program has contributed to market 
     transparency.
       (iv) The effectiveness of foreclosure mitigation efforts, 
     and the effectiveness of the program from the standpoint of 
     minimizing long-term costs to the taxpayers and maximizing 
     the benefits for taxpayers.
       (B) Timing.--The reports required under this paragraph 
     shall be submitted not later than 30 days after the first 
     exercise by the Secretary of the authority under section 
     101(a) or 102, and every 30 days thereafter.
       (2) Special report on regulatory reform.--The Oversight 
     Panel shall submit a special report on regulatory reform not 
     later than January 20, 2009, analyzing the current state of 
     the regulatory system and its effectiveness at overseeing the 
     participants in the financial system and protecting 
     consumers, and providing recommendations for improvement, 
     including recommendations regarding whether any participants 
     in the financial markets that are currently outside the 
     regulatory system should become subject to the regulatory 
     system, the rationale underlying such recommendation, and 
     whether there are any gaps in existing consumer protections.
       (c) Membership.--
       (1) In general.--The Oversight Panel shall consist of 5 
     members, as follows:
       (A) 1 member appointed by the Speaker of the House of 
     Representatives.
       (B) 1 member appointed by the minority leader of the House 
     of Representatives.
       (C) 1 member appointed by the majority leader of the 
     Senate.
       (D) 1 member appointed by the minority leader of the 
     Senate.
       (E) 1 member appointed by the Speaker of the House of 
     Representatives and the majority leader of the Senate, after 
     consultation with the minority leader of the Senate and the 
     minority leader of the House of Representatives.
       (2) Pay.--Each member of the Oversight Panel shall each be 
     paid at a rate equal to the daily equivalent of the annual 
     rate of basic pay for level I of the Executive Schedule for 
     each day (including travel time) during which such member is 
     engaged in the actual performance of duties vested in the 
     Commission.
       (3) Prohibition of compensation of federal employees.--
     Members of the Oversight Panel who are full-time officers or 
     employees of the United States or Members of Congress may not 
     receive additional pay, allowances, or benefits by reason of 
     their service on the Oversight Panel.
       (4) Travel expenses.--Each member shall receive travel 
     expenses, including per diem in lieu of subsistence, in 
     accordance with applicable provisions under subchapter I of 
     chapter 57 of title 5, United States Code.
       (5) Quorum.--Four members of the Oversight Panel shall 
     constitute a quorum but a lesser number may hold hearings.
       (6) Vacancies.--A vacancy on the Oversight Panel shall be 
     filled in the manner in which the original appointment was 
     made.
       (7) Meetings.--The Oversight Panel shall meet at the call 
     of the Chairperson or a majority of its members.
       (d) Staff.--
       (1) In general.--The Oversight Panel may appoint and fix 
     the pay of any personnel as the Commission considers 
     appropriate.
       (2) Experts and consultants.--The Oversight Panel may 
     procure temporary and intermittent services under section 
     3109(b) of title 5, United States Code.
       (3) Staff of agencies.--Upon request of the Oversight 
     Panel, the head of any Federal department or agency may 
     detail, on a reimbursable basis, any of the personnel of that 
     department or agency to the Oversight Panel to assist it in 
     carrying out its duties under this Act.
       (e) Powers.--
       (1) Hearings and sessions.--The Oversight Panel may, for 
     the purpose of carrying out this section, hold hearings, sit 
     and act at times and places, take testimony, and receive 
     evidence as the Panel considers appropriate and may 
     administer oaths or affirmations to witnesses appearing 
     before it.
       (2) Powers of members and agents.--Any member or agent of 
     the Oversight Panel may, if authorized by the Oversight 
     Panel, take any action which the Oversight Panel is 
     authorized to take by this section.
       (3) Obtaining official data.--The Oversight Panel may 
     secure directly from any department or agency of the United 
     States information necessary to enable it to carry out this 
     section. Upon request of the Chairperson of the Oversight 
     Panel, the head of that department or agency shall furnish 
     that information to the Oversight Panel.
       (4) Reports.--The Oversight Panel shall receive and 
     consider all reports required to be submitted to the 
     Oversight Panel under this Act.
       (f) Termination.--The Oversight Panel shall terminate 6 
     months after the termination date specified in section 120.
       (g) Funding for Expenses.--
       (1) Authorization of appropriations.--There is authorized 
     to be appropriated to the Oversight Panel such sums as may be 
     necessary for any fiscal year, half of which shall be derived 
     from the applicable account of the House of Representatives, 
     and half of which shall be derived from the contingent fund 
     of the Senate.
       (2) Reimbursement of amounts.--An amount equal to the 
     expenses of the Oversight Panel shall be promptly transferred 
     by the Secretary, from time to time upon the presentment of a 
     statement of such expenses by the Chairperson of the 
     Oversight Panel, from funds made available to the Secretary 
     under this Act to the applicable fund of the House of 
     Representatives and the contingent fund of the Senate, as 
     appropriate, as reimbursement for amounts expended from such 
     account and fund under paragraph (1).

     SEC. 126. FDIC AUTHORITY.

       (a) In General.--Section 18(a) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1828(a)) is amended by adding at the 
     end the following new paragraph:
       ``(4) False advertising, misuse of fdic names, and 
     misrepresentation to indicate insured status.--
       ``(A) Prohibition on false advertising and misuse of fdic 
     names.--No person may represent or imply that any deposit 
     liability, obligation, certificate, or share is insured or 
     guaranteed by the Corporation, if such deposit liability, 
     obligation, certificate, or share is not insured or 
     guaranteed by the Corporation--
       ``(i) by using the terms `Federal Deposit', `Federal 
     Deposit Insurance', `Federal Deposit Insurance Corporation', 
     any combination of such terms, or the abbreviation `FDIC' as 
     part of the business name or firm name of any person, 
     including any corporation, partnership, business trust, 
     association, or other business entity; or
       ``(ii) by using such terms or any other terms, sign, or 
     symbol as part of an advertisement, solicitation, or other 
     document.
       ``(B) Prohibition on misrepresentations of insured 
     status.--No person may knowingly misrepresent--
       ``(i) that any deposit liability, obligation, certificate, 
     or share is insured, under this Act, if such deposit 
     liability, obligation, certificate, or share is not so 
     insured; or
       ``(ii) the extent to which or the manner in which any 
     deposit liability, obligation, certificate, or share is 
     insured under this Act, if such deposit liability, 
     obligation, certificate, or share is not so insured, to the 
     extent or in the manner represented.
       ``(C) Authority of the appropriate federal banking 
     agency.--The appropriate Federal banking agency shall have 
     enforcement authority in the case of a violation of this 
     paragraph by any person for which the agency is the 
     appropriate Federal banking agency, or any institution-
     affiliated party thereof.
       ``(D) Corporation authority if the appropriate federal 
     banking agency fails to follow recommendation.--
       ``(i) Recommendation.--The Corporation may recommend in 
     writing to the appropriate Federal banking agency that the 
     agency take any enforcement action authorized under section 8 
     for purposes of enforcement of this paragraph with respect to 
     any person for which the agency is the appropriate Federal 
     banking agency or any institution-affiliated party thereof.
       ``(ii) Agency response.--If the appropriate Federal banking 
     agency does not, within 30 days of the date of receipt of a 
     recommendation under clause (i), take the enforcement action 
     with respect to this paragraph recommended by the Corporation 
     or provide a plan acceptable to the Corporation for 
     responding to the situation presented, the Corporation may 
     take the recommended enforcement action against such person 
     or institution-affiliated party.
       ``(E) Additional authority.--In addition to its authority 
     under subparagraphs (C) and (D), for purposes of this 
     paragraph, the Corporation shall have, in the same manner and 
     to the same extent as with respect to a State nonmember 
     insured bank--
       ``(i) jurisdiction over--

       ``(I) any person other than a person for which another 
     agency is the appropriate Federal banking agency or any 
     institution-affiliated party thereof; and
       ``(II) any person that aids or abets a violation of this 
     paragraph by a person described in subclause (I); and

       ``(ii) for purposes of enforcing the requirements of this 
     paragraph, the authority of the Corporation under--

       ``(I) section 10(c) to conduct investigations; and
       ``(II) subsections (b), (c), (d) and (i) of section 8 to 
     conduct enforcement actions.

       ``(F) Other actions preserved.--No provision of this 
     paragraph shall be construed as

[[Page 23672]]

     barring any action otherwise available, under the laws of the 
     United States or any State, to any Federal or State agency or 
     individual.''.
       (b) Enforcement Orders.--Section 8(c) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1818(c)) is amended by 
     adding at the end the following new paragraph:
       ``(4) False advertising or misuse of names to indicate 
     insured status.--
       ``(A) Temporary order.--
       ``(i) In general.--If a notice of charges served under 
     subsection (b)(1) specifies on the basis of particular facts 
     that any person engaged or is engaging in conduct described 
     in section 18(a)(4), the Corporation or other appropriate 
     Federal banking agency may issue a temporary order 
     requiring--

       ``(I) the immediate cessation of any activity or practice 
     described, which gave rise to the notice of charges; and
       ``(II) affirmative action to prevent any further, or to 
     remedy any existing, violation.

       ``(ii) Effect of order.--Any temporary order issued under 
     this subparagraph shall take effect upon service.
       ``(B) Effective period of temporary order.--A temporary 
     order issued under subparagraph (A) shall remain effective 
     and enforceable, pending the completion of an administrative 
     proceeding pursuant to subsection (b)(1) in connection with 
     the notice of charges--
       ``(i) until such time as the Corporation or other 
     appropriate Federal banking agency dismisses the charges 
     specified in such notice; or
       ``(ii) if a cease-and-desist order is issued against such 
     person, until the effective date of such order.
       ``(C) Civil money penalties.--Any violation of section 
     18(a)(4) shall be subject to civil money penalties, as set 
     forth in subsection (i), except that for any person other 
     than an insured depository institution or an institution-
     affiliated party that is found to have violated this 
     paragraph, the Corporation or other appropriate Federal 
     banking agency shall not be required to demonstrate any loss 
     to an insured depository institution.''.
       (c) Unenforceability of Certain Agreements.--Section 13(c) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is 
     amended by adding at the end the following new paragraph:
       ``(11) Unenforceability of certain agreements.--No 
     provision contained in any existing or future standstill, 
     confidentiality, or other agreement that, directly or 
     indirectly--
       ``(A) affects, restricts, or limits the ability of any 
     person to offer to acquire or acquire,
       ``(B) prohibits any person from offering to acquire or 
     acquiring, or
       ``(C) prohibits any person from using any previously 
     disclosed information in connection with any such offer to 
     acquire or acquisition of,
     all or part of any insured depository institution, including 
     any liabilities, assets, or interest therein, in connection 
     with any transaction in which the Corporation exercises its 
     authority under section 11 or 13, shall be enforceable 
     against or impose any liability on such person, as such 
     enforcement or liability shall be contrary to public 
     policy.''.
       (d) Technical and Conforming Amendments.--Section 18 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1828) is amended--
       (1) in subsection (a)(3)--
       (A) by striking ``this subsection'' the first place that 
     term appears and inserting ``paragraph (1)''; and
       (B) by striking ``this subsection'' the second place that 
     term appears and inserting ``paragraph (2)''; and
       (2) in the heading for subsection (a), by striking 
     ``Insurance Logo.--'' and inserting ``Representations of 
     Deposit Insurance.--''.

     SEC. 127. COOPERATION WITH THE FBI.

       Any Federal financial regulatory agency shall cooperate 
     with the Federal Bureau of Investigation and other law 
     enforcement agencies investigating fraud, misrepresentation, 
     and malfeasance with respect to development, advertising, and 
     sale of financial products.

     SEC. 128. ACCELERATION OF EFFECTIVE DATE.

       Section 203 of the Financial Services Regulatory Relief Act 
     of 2006 (12 U.S.C. 461 note) is amended by striking ``October 
     1, 2011'' and inserting ``October 1, 2008''.

     SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY.

       (a) In General.--Not later than 7 days after the date on 
     which the Board exercises its authority under the third 
     paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 
     343; relating to discounts for individuals, partnerships, and 
     corporations) the Board shall provide to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives a report which includes--
       (1) the justification for exercising the authority; and
       (2) the specific terms of the actions of the Board, 
     including the size and duration of the lending, available 
     information concerning the value of any collateral held with 
     respect to such a loan, the recipient of warrants or any 
     other potential equity in exchange for the loan, and any 
     expected cost to the taxpayers for such exercise.
       (b) Periodic Updates.--The Board shall provide updates to 
     the Committees specified in subsection (a) not less 
     frequently than once every 60 days while the subject loan is 
     outstanding, including--
       (1) the status of the loan;
       (2) the value of the collateral held by the Federal reserve 
     bank which initiated the loan; and
       (3) the projected cost to the taxpayers of the loan.
       (c) Confidentiality.--The information submitted to the 
     Congress under this section shall be kept confidential, upon 
     the written request of the Chairman of the Board, in which 
     case it shall be made available only to the Chairpersons and 
     Ranking Members of the Committees described in subsection 
     (a).
       (d) Applicability.--The provisions of this section shall be 
     in force for all uses of the authority provided under section 
     13 of the Federal Reserve Act occurring during the period 
     beginning on March 1, 2008 and ending on the after the date 
     of enactment of this Act, and reports described in subsection 
     (a) shall be required beginning not later than 30 days after 
     that date of enactment, with respect to any such exercise of 
     authority.
       (e) Sharing of Information.--Any reports required under 
     this section shall also be submitted to the Congressional 
     Oversight Panel established under section 125.

     SEC. 130. TECHNICAL CORRECTIONS.

       (a) In General.--Section 128(b)(2) of the Truth in Lending 
     Act (15 U.S.C. 1638(b)(2)), as amended by section 2502 of the 
     Mortgage Disclosure Improvement Act of 2008 (Public Law 110-
     289), is amended--
       (1) in subparagraph (A), by striking ``In the case'' and 
     inserting ``Except as provided in subparagraph (G), in the 
     case''; and
       (2) by amending subparagraph (G) to read as follows:
       ``(G)(i) In the case of an extension of credit relating to 
     a plan described in section 101(53D) of title 11, United 
     States Code--
       ``(I) the requirements of subparagraphs (A) through (E) 
     shall not apply; and
       ``(II) a good faith estimate of the disclosures required 
     under subsection (a) shall be made in accordance with 
     regulations of the Board under section 121(c) before such 
     credit is extended, or shall be delivered or placed in the 
     mail not later than 3 business days after the date on which 
     the creditor receives the written application of the consumer 
     for such credit, whichever is earlier.
       ``(ii) If a disclosure statement furnished within 3 
     business days of the written application (as provided under 
     clause (i)(II)) contains an annual percentage rate which is 
     subsequently rendered inaccurate, within the meaning of 
     section 107(c), the creditor shall furnish another disclosure 
     statement at the time of settlement or consummation of the 
     transaction.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the amendments made by 
     section 2502 of the Mortgage Disclosure Improvement Act of 
     2008 (Public Law 110-289).

     SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT.

       (a) Reimbursement.--The Secretary shall reimburse the 
     Exchange Stabilization Fund established under section 5302 of 
     title 31, United States Code, for any funds that are used for 
     the Treasury Money Market Funds Guaranty Program for the 
     United States money market mutual fund industry, from funds 
     under this Act.
       (b) Limits on Use of Exchange Stabilization Fund.--The 
     Secretary is prohibited from using the Exchange Stabilization 
     Fund for the establishment of any future guaranty programs 
     for the United States money market mutual fund industry.

     SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING.

       (a) Authority.--The Securities and Exchange Commission 
     shall have the authority under the securities laws (as such 
     term is defined in section 3(a)(47) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, by 
     rule, regulation, or order, the application of Statement 
     Number 157 of the Financial Accounting Standards Board for 
     any issuer (as such term is defined in section 3(a)(8) of 
     such Act) or with respect to any class or category of 
     transaction if the Commission determines that is necessary or 
     appropriate in the public interest and is consistent with the 
     protection of investors.
       (b) Savings Provision.--Nothing in subsection (a) shall be 
     construed to restrict or limit any authority of the 
     Securities and Exchange Commission under securities laws as 
     in effect on the date of enactment of this Act.

     SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.

       (a) Study.--The Securities and Exchange Commission, in 
     consultation with the Board and the Secretary, shall conduct 
     a study on mark-to-market accounting standards as provided in 
     Statement Number 157 of the Financial Accounting Standards 
     Board, as such standards are applicable to financial 
     institutions, including depository institutions. Such a study 
     shall consider at a minimum--
       (1) the effects of such accounting standards on a financial 
     institution's balance sheet;
       (2) the impacts of such accounting on bank failures in 
     2008;
       (3) the impact of such standards on the quality of 
     financial information available to investors;

[[Page 23673]]

       (4) the process used by the Financial Accounting Standards 
     Board in developing accounting standards;
       (5) the advisability and feasibility of modifications to 
     such standards; and
       (6) alternative accounting standards to those provided in 
     such Statement Number 157.
       (b) Report.--The Securities and Exchange Commission shall 
     submit to Congress a report of such study before the end of 
     the 90-day period beginning on the date of the enactment of 
     this Act containing the findings and determinations of the 
     Commission, including such administrative and legislative 
     recommendations as the Commission determines appropriate.

     SEC. 134. RECOUPMENT.

       Upon the expiration of the 5-year period beginning upon the 
     date of the enactment of this Act, the Director of the Office 
     of Management and Budget, in consultation with the Director 
     of the Congressional Budget Office, shall submit a report to 
     the Congress on the net amount within the Troubled Asset 
     Relief Program under this Act. In any case where there is a 
     shortfall, the President shall submit a legislative proposal 
     that recoups from the financial industry an amount equal to 
     the shortfall in order to ensure that the Troubled Asset 
     Relief Program does not add to the deficit or national debt.

     SEC. 135. PRESERVATION OF AUTHORITY.

       With the exception of section 131, nothing in this Act may 
     be construed to limit the authority of the Secretary or the 
     Board under any other provision of law.

     SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND SHARE INSURANCE 
                   COVERAGE.

       (a) Federal Deposit Insurance Act; Temporary Increase in 
     Deposit Insurance.--
       (1) Increased amount.--Effective only during the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, section 11(a)(1)(E) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(a)(1)(E)) shall apply with 
     ``$250,000'' substituted for ``$100,000''.
       (2) Temporary increase not to be considered for setting 
     assessments.--The temporary increase in the standard maximum 
     deposit insurance amount made under paragraph (1) shall not 
     be taken into account by the Board of Directors of the 
     Corporation for purposes of setting assessments under section 
     7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
     1817(b)(2)).
       (3) Borrowing limits temporarily lifted.--During the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, the Board of Directors of the Corporation 
     may request from the Secretary, and the Secretary shall 
     approve, a loan or loans in an amount or amounts necessary to 
     carry out this subsection, without regard to the limitations 
     on such borrowing under section 14(a) and 15(c) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1824(a), 1825(c)).
       (b) Federal Credit Union Act; Temporary Increase in Share 
     Insurance.--
       (1) Increased amount.--Effective only during the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, section 207(k)(5) of the Federal Credit 
     Union Act (12 U.S.C. 1787(k)(5)) shall apply with 
     ``$250,000'' substituted for ``$100,000''.
       (2) Temporary increase not to be considered for setting 
     insurance premium charges and insurance deposit 
     adjustments.--The temporary increase in the standard maximum 
     share insurance amount made under paragraph (1) shall not be 
     taken into account by the National Credit Union 
     Administration Board for purposes of setting insurance 
     premium charges and share insurance deposit adjustments under 
     section 202(c)(2) of the Federal Credit Union Act (12 U.S.C. 
     1782(c)(2)).
       (3) Borrowing limits temporarily lifted.--During the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, the National Credit Union Administration 
     Board may request from the Secretary, and the Secretary shall 
     approve, a loan or loans in an amount or amounts necessary to 
     carry out this subsection, without regard to the limitations 
     on such borrowing under section 203(d)(1) of the Federal 
     Credit Union Act (12 U.S.C. 1783(d)(1)).
       (c) Not for Use in Inflation Adjustments.--The temporary 
     increase in the standard maximum deposit insurance amount 
     made under this section shall not be used to make any 
     inflation adjustment under section 11(a)(1)(F) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1821(a)(1)(F)) for purposes 
     of that Act or the Federal Credit Union Act.

                  TITLE II--BUDGET-RELATED PROVISIONS

     SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES.

       Upon request, and to the extent otherwise consistent with 
     law, all information used by the Secretary in connection with 
     activities authorized under this Act (including the records 
     to which the Comptroller General is entitled under this Act) 
     shall be made available to congressional support agencies (in 
     accordance with their obligations to support the Congress as 
     set out in their authorizing statutes) for the purposes of 
     assisting the committees of Congress with conducting 
     oversight, monitoring, and analysis of the activities 
     authorized under this Act.

     SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET AND 
                   THE CONGRESSIONAL BUDGET OFFICE.

       (a) Reports by the Office of Management and Budget.--Within 
     60 days of the first exercise of the authority granted in 
     section 101(a), but in no case later than December 31, 2008, 
     and semiannually thereafter, the Office of Management and 
     Budget shall report to the President and the Congress--
       (1) the estimate, notwithstanding section 502(5)(F) of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(F)), as 
     of the first business day that is at least 30 days prior to 
     the issuance of the report, of the cost of the troubled 
     assets, and guarantees of the troubled assets, determined in 
     accordance with section 123;
       (2) the information used to derive the estimate, including 
     assets purchased or guaranteed, prices paid, revenues 
     received, the impact on the deficit and debt, and a 
     description of any outstanding commitments to purchase 
     troubled assets; and
       (3) a detailed analysis of how the estimate has changed 
     from the previous report.
     Beginning with the second report under subsection (a), the 
     Office of Management and Budget shall explain the differences 
     between the Congressional Budget Office estimates delivered 
     in accordance with subsection (b) and prior Office of 
     Management and Budget estimates.
       (b) Reports by the Congressional Budget Office.--Within 45 
     days of receipt by the Congress of each report from the 
     Office of Management and Budget under subsection (a), the 
     Congressional Budget Office shall report to the Congress the 
     Congressional Budget Office's assessment of the report 
     submitted by the Office of Management and Budget, including--
       (1) the cost of the troubled assets and guarantees of the 
     troubled assets,
       (2) the information and valuation methods used to calculate 
     such cost, and
       (3) the impact on the deficit and the debt.
       (c) Financial Expertise.--In carrying out the duties in 
     this subsection or performing analyses of activities under 
     this Act, the Director of the Congressional Budget Office may 
     employ personnel and procure the services of experts and 
     consultants.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to produce 
     reports required by this section.

     SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.

       (a) In General.--Section 1105(a) of title 31, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(35) as supplementary materials, a separate analysis of 
     the budgetary effects for all prior fiscal years, the current 
     fiscal year, the fiscal year for which the budget is 
     submitted, and ensuing fiscal years of the actions the 
     Secretary of the Treasury has taken or plans to take using 
     any authority provided in the Emergency Economic 
     Stabilization Act of 2008, including--
       ``(A) an estimate of the current value of all assets 
     purchased, sold, and guaranteed under the authority provided 
     in the Emergency Economic Stabilization Act of 2008 using 
     methodology required by the Federal Credit Reform Act of 1990 
     (2 U.S.C. 661 et seq.) and section 123 of the Emergency 
     Economic Stabilization Act of 2008;
       ``(B) an estimate of the deficit, the debt held by the 
     public, and the gross Federal debt using methodology required 
     by the Federal Credit Reform Act of 1990 and section 123 of 
     the Emergency Economic Stabilization Act of 2008;
       ``(C) an estimate of the current value of all assets 
     purchased, sold, and guaranteed under the authority provided 
     in the Emergency Economic Stabilization Act of 2008 
     calculated on a cash basis;
       ``(D) a revised estimate of the deficit, the debt held by 
     the public, and the gross Federal debt, substituting the 
     cash-based estimates in subparagraph (C) for the estimates 
     calculated under subparagraph (A) pursuant to the Federal 
     Credit Reform Act of 1990 and section 123 of the Emergency 
     Economic Stabilization Act of 2008; and
       ``(E) the portion of the deficit which can be attributed to 
     any action taken by the Secretary using authority provided by 
     the Emergency Economic Stabilization Act of 2008 and the 
     extent to which the change in the deficit since the most 
     recent estimate is due to a reestimate using the methodology 
     required by the Federal Credit Reform Act of 1990 and section 
     123 of the Emergency Economic Stabilization Act of 2008.''
       (b) Consultation.--In implementing this section, the 
     Director of Office of Management and Budget shall consult 
     periodically, but at least annually, with the Committee on 
     the Budget of the House of Representatives, the Committee on 
     the Budget of the Senate, and the Director of the 
     Congressional Budget Office.
       (c) Effective Date.--This section and the amendment made by 
     this section shall apply beginning with respect to the fiscal 
     year 2010 budget submission of the President.

     SEC. 204. EMERGENCY TREATMENT.

       All provisions of this Act are designated as an emergency 
     requirement and necessary to meet emergency needs pursuant to 
     section 204(a) of S. Con. Res 21 (110th Congress), the 
     concurrent resolution on the budget for fiscal year 2008 and 
     rescissions of any amounts provided in this Act shall not be 
     counted for purposes of budget enforcement.

[[Page 23674]]



                       TITLE III--TAX PROVISIONS

     SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN 
                   PREFERRED STOCK.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986, gain or loss from the sale or exchange of any 
     applicable preferred stock by any applicable financial 
     institution shall be treated as ordinary income or loss.
       (b) Applicable Preferred Stock.--For purposes of this 
     section, the term ``applicable preferred stock'' means any 
     stock--
       (1) which is preferred stock in--
       (A) the Federal National Mortgage Association, established 
     pursuant to the Federal National Mortgage Association Charter 
     Act (12 U.S.C. 1716 et seq.), or
       (B) the Federal Home Loan Mortgage Corporation, established 
     pursuant to the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 et seq.), and
       (2) which--
       (A) was held by the applicable financial institution on 
     September 6, 2008, or
       (B) was sold or exchanged by the applicable financial 
     institution on or after January 1, 2008, and before September 
     7, 2008.
       (c) Applicable Financial Institution.--For purposes of this 
     section:
       (1) In general.--Except as provided in paragraph (2), the 
     term ``applicable financial institution'' means--
       (A) a financial institution referred to in section 
     582(c)(2) of the Internal Revenue Code of 1986, or
       (B) a depository institution holding company (as defined in 
     section 3(w)(1) of the Federal Deposit Insurance Act (12 
     U.S.C. 1813(w)(1))).
       (2) Special rules for certain sales.--In the case of--
       (A) a sale or exchange described in subsection (b)(2)(B), 
     an entity shall be treated as an applicable financial 
     institution only if it was an entity described in 
     subparagraph (A) or (B) of paragraph (1) at the time of the 
     sale or exchange, and
       (B) a sale or exchange after September 6, 2008, of 
     preferred stock described in subsection (b)(2)(A), an entity 
     shall be treated as an applicable financial institution only 
     if it was an entity described in subparagraph (A) or (B) of 
     paragraph (1) at all times during the period beginning on 
     September 6, 2008, and ending on the date of the sale or 
     exchange of the preferred stock.
       (d) Special Rule for Certain Property Not Held on September 
     6, 2008.--The Secretary of the Treasury or the Secretary's 
     delegate may extend the application of this section to all or 
     a portion of the gain or loss from a sale or exchange in any 
     case where--
       (1) an applicable financial institution sells or exchanges 
     applicable preferred stock after September 6, 2008, which the 
     applicable financial institution did not hold on such date, 
     but the basis of which in the hands of the applicable 
     financial institution at the time of the sale or exchange is 
     the same as the basis in the hands of the person which held 
     such stock on such date, or
       (2) the applicable financial institution is a partner in a 
     partnership which--
       (A) held such stock on September 6, 2008, and later sold or 
     exchanged such stock, or
       (B) sold or exchanged such stock during the period 
     described in subsection (b)(2)(B).
       (e) Regulatory Authority.--The Secretary of the Treasury or 
     the Secretary's delegate may prescribe such guidance, rules, 
     or regulations as are necessary to carry out the purposes of 
     this section.
       (f) Effective Date.--This section shall apply to sales or 
     exchanges occurring after December 31, 2007, in taxable years 
     ending after such date.

     SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE 
                   COMPENSATION OF EMPLOYERS PARTICIPATING IN THE 
                   TROUBLED ASSETS RELIEF PROGRAM.

       (a) Denial of Deduction.--Subsection (m) of section 162 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new paragraph:
       ``(5) Special rule for application to employers 
     participating in the troubled assets relief program.--
       ``(A) In general.--In the case of an applicable employer, 
     no deduction shall be allowed under this chapter--
       ``(i) in the case of executive remuneration for any 
     applicable taxable year which is attributable to services 
     performed by a covered executive during such applicable 
     taxable year, to the extent that the amount of such 
     remuneration exceeds $500,000, or
       ``(ii) in the case of deferred deduction executive 
     remuneration for any taxable year for services performed 
     during any applicable taxable year by a covered executive, to 
     the extent that the amount of such remuneration exceeds 
     $500,000 reduced (but not below zero) by the sum of--

       ``(I) the executive remuneration for such applicable 
     taxable year, plus
       ``(II) the portion of the deferred deduction executive 
     remuneration for such services which was taken into account 
     under this clause in a preceding taxable year.

       ``(B) Applicable employer.--For purposes of this 
     paragraph--
       ``(i) In general.--Except as provided in clause (ii), the 
     term `applicable employer' means any employer from whom 1 or 
     more troubled assets are acquired under a program established 
     by the Secretary under section 101(a) of the Emergency 
     Economic Stabilization Act of 2008 if the aggregate amount of 
     the assets so acquired for all taxable years exceeds 
     $300,000,000.
       ``(ii) Disregard of certain assets sold through direct 
     purchase.--If the only sales of troubled assets by an 
     employer under the program described in clause (i) are 
     through 1 or more direct purchases (within the meaning of 
     section 113(c) of the Emergency Economic Stabilization Act of 
     2008), such assets shall not be taken into account under 
     clause (i) in determining whether the employer is an 
     applicable employer for purposes of this paragraph.
       ``(iii) Aggregation rules.--Two or more persons who are 
     treated as a single employer under subsection (b) or (c) of 
     section 414 shall be treated as a single employer, except 
     that in applying section 1563(a) for purposes of either such 
     subsection, paragraphs (2) and (3) thereof shall be 
     disregarded.
       ``(C) Applicable taxable year.--For purposes of this 
     paragraph, the term `applicable taxable year' means, with 
     respect to any employer--
       ``(i) the first taxable year of the employer--

       ``(I) which includes any portion of the period during which 
     the authorities under section 101(a) of the Emergency 
     Economic Stabilization Act of 2008 are in effect (determined 
     under section 120 thereof), and
       ``(II) in which the aggregate amount of troubled assets 
     acquired from the employer during the taxable year pursuant 
     to such authorities (other than assets to which subparagraph 
     (B)(ii) applies), when added to the aggregate amount so 
     acquired for all preceding taxable years, exceeds 
     $300,000,000, and

       ``(ii) any subsequent taxable year which includes any 
     portion of such period.
       ``(D) Covered executive.--For purposes of this paragraph--
       ``(i) In general.--The term `covered executive' means, with 
     respect to any applicable taxable year, any employee--

       ``(I) who, at any time during the portion of the taxable 
     year during which the authorities under section 101(a) of the 
     Emergency Economic Stabilization Act of 2008 are in effect 
     (determined under section 120 thereof), is the chief 
     executive officer of the applicable employer or the chief 
     financial officer of the applicable employer, or an 
     individual acting in either such capacity, or
       ``(II) who is described in clause (ii).

       ``(ii) Highest compensated employees.--An employee is 
     described in this clause if the employee is 1 of the 3 
     highest compensated officers of the applicable employer for 
     the taxable year (other than an individual described in 
     clause (i)(I)), determined--

       ``(I) on the basis of the shareholder disclosure rules for 
     compensation under the Securities Exchange Act of 1934 
     (without regard to whether those rules apply to the 
     employer), and
       ``(II) by only taking into account employees employed 
     during the portion of the taxable year described in clause 
     (i)(I).

       ``(iii) Employee remains covered executive.--If an employee 
     is a covered executive with respect to an applicable employer 
     for any applicable taxable year, such employee shall be 
     treated as a covered executive with respect to such employer 
     for all subsequent applicable taxable years and for all 
     subsequent taxable years in which deferred deduction 
     executive remuneration with respect to services performed in 
     all such applicable taxable years would (but for this 
     paragraph) be deductible.
       ``(E) Executive remuneration.--For purposes of this 
     paragraph, the term `executive remuneration' means the 
     applicable employee remuneration of the covered executive, as 
     determined under paragraph (4) without regard to 
     subparagraphs (B), (C), and (D) thereof. Such term shall not 
     include any deferred deduction executive remuneration with 
     respect to services performed in a prior applicable taxable 
     year.
       ``(F) Deferred deduction executive remuneration.--For 
     purposes of this paragraph, the term `deferred deduction 
     executive remuneration' means remuneration which would be 
     executive remuneration for services performed in an 
     applicable taxable year but for the fact that the deduction 
     under this chapter (determined without regard to this 
     paragraph) for such remuneration is allowable in a subsequent 
     taxable year.
       ``(G) Coordination.--Rules similar to the rules of 
     subparagraphs (F) and (G) of paragraph (4) shall apply for 
     purposes of this paragraph.
       ``(H) Regulatory authority.--The Secretary may prescribe 
     such guidance, rules, or regulations as are necessary to 
     carry out the purposes of this paragraph and the Emergency 
     Economic Stabilization Act of 2008, including the extent to 
     which this paragraph applies in the case of any acquisition, 
     merger, or reorganization of an applicable employer.''.
       (b) Golden Parachute Rule.--Section 280G of the Internal 
     Revenue Code of 1986 is amended--
       (1) by redesignating subsection (e) as subsection (f), and
       (2) by inserting after subsection (d) the following new 
     subsection:

[[Page 23675]]

       ``(e) Special Rule for Application to Employers 
     Participating in the Troubled Assets Relief Program.--
       ``(1) In general.--In the case of the severance from 
     employment of a covered executive of an applicable employer 
     during the period during which the authorities under section 
     101(a) of the Emergency Economic Stabilization Act of 2008 
     are in effect (determined under section 120 of such Act), 
     this section shall be applied to payments to such executive 
     with the following modifications:
       ``(A) Any reference to a disqualified individual (other 
     than in subsection (c)) shall be treated as a reference to a 
     covered executive.
       ``(B) Any reference to a change described in subsection 
     (b)(2)(A)(i) shall be treated as a reference to an applicable 
     severance from employment of a covered executive, and any 
     reference to a payment contingent on such a change shall be 
     treated as a reference to any payment made during an 
     applicable taxable year of the employer on account of such 
     applicable severance from employment.
       ``(C) Any reference to a corporation shall be treated as a 
     reference to an applicable employer.
       ``(D) The provisions of subsections (b)(2)(C), (b)(4), 
     (b)(5), and (d)(5) shall not apply.
       ``(2) Definitions and special rules.--For purposes of this 
     subsection:
       ``(A) Definitions.--Any term used in this subsection which 
     is also used in section 162(m)(5) shall have the meaning 
     given such term by such section.
       ``(B) Applicable severance from employment.--The term 
     `applicable severance from employment' means any severance 
     from employment of a covered executive--
       ``(i) by reason of an involuntary termination of the 
     executive by the employer, or
       ``(ii) in connection with any bankruptcy, liquidation, or 
     receivership of the employer.
       ``(C) Coordination and other rules.--
       ``(i) In general.--If a payment which is treated as a 
     parachute payment by reason of this subsection is also a 
     parachute payment determined without regard to this 
     subsection, this subsection shall not apply to such payment.
       ``(ii) Regulatory authority.--The Secretary may prescribe 
     such guidance, rules, or regulations as are necessary--

       ``(I) to carry out the purposes of this subsection and the 
     Emergency Economic Stabilization Act of 2008, including the 
     extent to which this subsection applies in the case of any 
     acquisition, merger, or reorganization of an applicable 
     employer,
       ``(II) to apply this section and section 4999 in cases 
     where one or more payments with respect to any individual are 
     treated as parachute payments by reason of this subsection, 
     and other payments with respect to such individual are 
     treated as parachute payments under this section without 
     regard to this subsection, and
       ``(III) to prevent the avoidance of the application of this 
     section through the mischaracterization of a severance from 
     employment as other than an applicable severance from 
     employment.''.

       (c) Effective Dates.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to taxable years ending on or after the date of the 
     enactment of this Act.
       (2) Golden parachute rule.--The amendments made by 
     subsection (b) shall apply to payments with respect to 
     severances occurring during the period during which the 
     authorities under section 101(a) of this Act are in effect 
     (determined under section 120 of this Act).

     SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE OF 
                   QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.

       (a) Extension.--Subparagraph (E) of section 108(a)(1) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``January 1, 2010'' and inserting ``January 1, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to discharges of indebtedness occurring on or 
     after January 1, 2010.

        DIVISION B--ENERGY IMPROVEMENT AND EXTENSION ACT OF 2008

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This division may be cited as the 
     ``Energy Improvement and Extension Act of 2008''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this division 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 
     division is as follows:

Sec. 1. Short title, etc.

                 TITLE I--ENERGY PRODUCTION INCENTIVES

                Subtitle A--Renewable Energy Incentives

Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
              renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric 
              restructuring policy.

           Subtitle B--Carbon Mitigation and Coal Provisions

Sec. 111. Expansion and modification of advanced coal project 
              investment credit.
Sec. 112. Expansion and modification of coal gasification investment 
              credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung 
              Disability Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain 
              coal producers and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon 
              dioxide treated as qualifying income for publicly traded 
              partnerships.
Sec. 117. Carbon audit of the tax code.

     TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for 
              biomass ethanol plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide 
              an incentive for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor 
              vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and 
              advanced insulation.
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. Certain income and gains relating to alcohol fuels and 
              mixtures, biodiesel fuels and mixtures, and alternative 
              fuels and mixtures treated as qualifying income for 
              publicly traded partnerships.
Sec. 209. Extension and modification of election to expense certain 
              refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage 
              depletion for oil and natural gas produced from marginal 
              properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.

        TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS

Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.
Sec. 306. Accelerated recovery period for depreciation of smart meters 
              and smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and 
              recycling property.

                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Limitation of deduction for income attributable to domestic 
              production of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas 
              extraction income and foreign oil related income for 
              purposes of the foreign tax credit.
Sec. 403. Broker reporting of customer's basis in securities 
              transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.

                 TITLE I--ENERGY PRODUCTION INCENTIVES

                Subtitle A--Renewable Energy Incentives

     SEC. 101. RENEWABLE ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) 1-year extension for wind and refined coal 
     facilities.--Paragraphs (1) and (8) of section 45(d) are each 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010''.
       (2) 2-year extension for certain other facilities.--Each of 
     the following provisions of section 45(d) is amended by 
     striking ``January 1, 2009'' and inserting ``January 1, 
     2011'':
       (A) Clauses (i) and (ii) of paragraph (2)(A).
       (B) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (C) Paragraph (4).
       (D) Paragraph (5).
       (E) Paragraph (6).
       (F) Paragraph (7).
       (G) Subparagraphs (A) and (B) of paragraph (9).
       (b) Modification of Refined Coal as a Qualified Energy 
     Resource.--

[[Page 23676]]

       (1) Elimination of increased market value test.--Section 
     45(c)(7)(A)(i) (defining refined coal), as amended by section 
     108, is amended--
       (A) by striking subclause (IV),
       (B) by adding ``and'' at the end of subclause (II), and
       (C) by striking ``, and'' at the end of subclause (III) and 
     inserting a period.
       (2) Increase in required emission reduction.--Section 
     45(c)(7)(B) (defining qualified emission reduction) is 
     amended by inserting ``at least 40 percent of the emissions 
     of'' after ``nitrogen oxide and''.
       (c) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (d) Expansion of Biomass Facilities.--
       (1) Open-loop biomass facilities.--Paragraph (3) of section 
     45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (2) Closed-loop biomass facilities.--Paragraph (2) of 
     section 45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A)(i), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (e) Modification of Rules for Hydropower Production.--
     Subparagraph (C) of section 45(c)(8) is amended to read as 
     follows:
       ``(C) Nonhydroelectric dam.--For purposes of subparagraph 
     (A), a facility is described in this subparagraph if--
       ``(i) the hydroelectric project installed on the 
     nonhydroelectric dam is licensed by the Federal Energy 
     Regulatory Commission and meets all other applicable 
     environmental, licensing, and regulatory requirements,
       ``(ii) the nonhydroelectric dam was placed in service 
     before the date of the enactment of this paragraph and 
     operated for flood control, navigation, or water supply 
     purposes and did not produce hydroelectric power on the date 
     of the enactment of this paragraph, and
       ``(iii) the hydroelectric project is operated so that the 
     water surface elevation at any given location and time that 
     would have occurred in the absence of the hydroelectric 
     project is maintained, subject to any license requirements 
     imposed under applicable law that change the water surface 
     elevation for the purpose of improving environmental quality 
     of the affected waterway.

     The Secretary, in consultation with the Federal Energy 
     Regulatory Commission, shall certify if a hydroelectric 
     project licensed at a nonhydroelectric dam meets the criteria 
     in clause (iii). Nothing in this section shall affect the 
     standards under which the Federal Energy Regulatory 
     Commission issues licenses for and regulates hydropower 
     projects under part I of the Federal Power Act.''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to property originally placed in service after December 31, 
     2008.
       (2) Refined coal.--The amendments made by subsection (b) 
     shall apply to coal produced and sold from facilities placed 
     in service after December 31, 2008.
       (3) Trash facility clarification.--The amendments made by 
     subsection (c) shall apply to electricity produced and sold 
     after the date of the enactment of this Act.
       (4) Expansion of biomass facilities.--The amendments made 
     by subsection (d) shall apply to property placed in service 
     after the date of the enactment of this Act.

     SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM 
                   MARINE RENEWABLES.

       (a) In General.--Paragraph (1) of section 45(c) is amended 
     by striking ``and'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (b) Marine Renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (c) Definition of Facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2012.''.
       (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (e) Coordination With Small Irrigation Power.--Paragraph 
     (5) of section 45(d), as amended by section 101, is amended 
     by striking ``January 1, 2012'' and inserting ``the date of 
     the enactment of paragraph (11)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to electricity produced and sold after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 103. ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) are each amended by striking 
     ``January 1, 2009'' and inserting ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2016''.
       (3) Microturbine property.--Subparagraph (E) of section 
     48(c)(2) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2016''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--
       (1) In general.--Subparagraph (B) of section 38(c)(4), as 
     amended by the Housing Assistance Tax Act of 2008, is amended 
     by redesignating clause (vi) as clause (vi) and (vii), 
     respectively, and by inserting after clause (iv) the 
     following new clause:
       ``(v) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48,''.
       (2) Technical amendment.--Clause (vi) of section 
     38(c)(4)(B), as redesignated by paragraph (1), is amended by 
     striking ``section 47 to the extent attributable to'' and 
     inserting ``section 46 to the extent that such credit is 
     attributable to the rehabilitation credit under section 47, 
     but only with respect to''.
       (c) Energy Credit for Combined Heat and Power System 
     Property.--
       (1) In general.--Section 48(a)(3)(A) is amended by striking 
     ``or'' at the end of clause (iii), by inserting ``or'' at the 
     end of clause (iv), and by adding at the end the following 
     new clause:
       ``(v) combined heat and power system property,''.
       (2) Combined heat and power system property.--Subsection 
     (c) of section 48 is amended--
       (A) by striking ``Qualified Fuel Cell Property; Qualified 
     Microturbine Property'' in the heading and inserting 
     ``Definitions'', and
       (B) by adding at the end the following new paragraph:
       ``(3) Combined heat and power system property.--
       ``(A) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(i) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),
       ``(ii) which produces--

       ``(I) at least 20 percent of its total useful energy in the 
     form of thermal energy which is not used to produce 
     electrical or mechanical power (or combination thereof), and
       ``(II) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),

       ``(iii) the energy efficiency percentage of which exceeds 
     60 percent, and
       ``(iv) which is placed in service before January 1, 2017.
       ``(B) Limitation.--
       ``(i) In general.--In the case of combined heat and power 
     system property with an electrical capacity in excess of the 
     applicable capacity placed in service during the taxable 
     year, the credit under subsection (a)(1) (determined without 
     regard to this paragraph) for such year shall be equal to the 
     amount which bears the same ratio to such credit as the 
     applicable capacity bears to the capacity of such property.
       ``(ii) Applicable capacity.--For purposes of clause (i), 
     the term `applicable capacity'

[[Page 23677]]

     means 15 megawatts or a mechanical energy capacity of more 
     than 20,000 horsepower or an equivalent combination of 
     electrical and mechanical energy capacities.
       ``(iii) Maximum capacity.--The term `combined heat and 
     power system property' shall not include any property 
     comprising a system if such system has a capacity in excess 
     of 50 megawatts or a mechanical energy capacity in excess of 
     67,000 horsepower or an equivalent combination of electrical 
     and mechanical energy capacities.
       ``(C) Special rules.--
       ``(i) Energy efficiency percentage.--For purposes of this 
     paragraph, the energy efficiency percentage of a system is 
     the fraction--

       ``(I) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(II) the denominator of which is the lower heating value 
     of the fuel sources for the system.

       ``(ii) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under subparagraph 
     (A)(ii) shall be determined on a Btu basis.
       ``(iii) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(D) Systems using biomass.--If a system is designed to 
     use biomass (within the meaning of paragraphs (2) and (3) of 
     section 45(c) without regard to the last sentence of 
     paragraph (3)(A)) for at least 90 percent of the energy 
     source--
       ``(i) subparagraph (A)(iii) shall not apply, but
       ``(ii) the amount of credit determined under subsection (a) 
     with respect to such system shall not exceed the amount which 
     bears the same ratio to such amount of credit (determined 
     without regard to this subparagraph) as the energy efficiency 
     percentage of such system bears to 60 percent.''.
       (3) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
     ``paragraphs (1)(B), (2)(B), and (3)(B)''.
       (d) Increase of Credit Limitation for Fuel Cell Property.--
     Subparagraph (B) of section 48(c)(1) is amended by striking 
     ``$500'' and inserting ``$1,500''.
       (e) Public Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (B) Paragraph (2) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Combined heat and power and fuel cell property.--The 
     amendments made by subsections (c) and (d) shall apply to 
     periods after the date of the enactment of this Act, in 
     taxable years ending after such date, under rules similar to 
     the rules of section 48(m) of the Internal Revenue Code of 
     1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).
       (4)  Public utility property.--The amendments made by 
     subsection (e) shall apply to periods after February 13, 
     2008, in taxable years ending after such date, under rules 
     similar to the rules of section 48(m) of the Internal Revenue 
     Code of 1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).

     SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY.

       (a) In General.--Section 48(a)(3)(A), as amended by section 
     103, is amended by striking ``or'' at the end of clause (iv), 
     by adding ``or'' at the end of clause (v), and by inserting 
     after clause (v) the following new clause:
       ``(vi) qualified small wind energy property,''.
       (b) 30 Percent Credit.--Section 48(a)(2)(A)(i) is amended 
     by striking ``and'' at the end of subclause (II) and by 
     inserting after subclause (III) the following new subclause:

       ``(IV) qualified small wind energy property, and''.

       (c) Qualified Small Wind Energy Property.--Section 48(c), 
     as amended by section 103, is amended by adding at the end 
     the following new paragraph:
       ``(4) Qualified small wind energy property.--
       ``(A) In general.--The term `qualified small wind energy 
     property' means property which uses a qualifying small wind 
     turbine to generate electricity.
       ``(B) Limitation.--In the case of qualified small wind 
     energy property placed in service during the taxable year, 
     the credit otherwise determined under subsection (a)(1) for 
     such year with respect to all such property of the taxpayer 
     shall not exceed $4,000.
       ``(C) Qualifying small wind turbine.--The term `qualifying 
     small wind turbine' means a wind turbine which has a 
     nameplate capacity of not more than 100 kilowatts.
       ``(D) Termination.--The term `qualified small wind energy 
     property' shall not include any property for any period after 
     December 31, 2016.''.
       (d) Conforming Amendment.--Section 48(a)(1), as amended by 
     section 103, is amended by striking ``paragraphs (1)(B), 
     (2)(B), and (3)(B)'' and inserting ``paragraphs (1)(B), 
     (2)(B), (3)(B), and (4)(B)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.

       (a) In General.--Subparagraph (A) of section 48(a)(3), as 
     amended by this Act, is amended by striking ``or'' at the end 
     of clause (v), by inserting ``or'' at the end of clause (vi), 
     and by adding at the end the following new clause:
       ``(vii) equipment which uses the ground or ground water as 
     a thermal energy source to heat a structure or as a thermal 
     energy sink to cool a structure, but only with respect to 
     periods ending before January 1, 2017,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       (a) Extension.--Section 25D(g) is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2016''.
       (b) Removal of Limitation for Solar Electric Property.--
       (1) In general.--Section 25D(b)(1), as amended by 
     subsections (c) and (d), is amended--
       (A) by striking subparagraph (A), and
       (B) by redesignating subparagraphs (B) through (E) as 
     subparagraphs (A) through and (D), respectively.
       (2) Conforming amendment.--Section 25D(e)(4)(A), as amended 
     by subsections (c) and (d), is amended--
       (A) by striking clause (i), and
       (B) by redesignating clauses (ii) through (v) as clauses 
     (i) and (iv), respectively.
       (c) Credit for Residential Wind Property.--
       (1) In general.--Section 25D(a) is amended by striking 
     ``and'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(4) 30 percent of the qualified small wind energy 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1) is amended by striking 
     ``and'' at the end of subparagraph (B), by striking the 
     period at the end of subparagraph (C) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(D) $500 with respect to each half kilowatt of capacity 
     (not to exceed $4,000) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (3) Qualified small wind energy property expenditures.--
       (A) In general.--Section 25D(d) is amended by adding at the 
     end the following new paragraph:
       ``(4) Qualified small wind energy property expenditure.--
     The term `qualified small wind energy property expenditure' 
     means an expenditure for property which uses a wind turbine 
     to generate electricity for use in connection with a dwelling 
     unit located in the United States and used as a residence by 
     the taxpayer.''.
       (B) No double benefit.--Section 45(d)(1) is amended by 
     adding at the end the following new sentence: ``Such term 
     shall not include any facility with respect to which any 
     qualified small wind energy property expenditure (as defined 
     in subsection (d)(4) of section 25D) is taken into account in 
     determining the credit under such section.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A) is amended by striking ``and'' at the 
     end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) $1,667 in the case of each half kilowatt of capacity 
     (not to exceed $13,333) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (d) Credit for Geothermal Heat pump Systems.--
       (1) In general.--Section 25D(a), as amended by subsection 
     (c), is amended by striking

[[Page 23678]]

     ``and'' at the end of paragraph (3), by striking the period 
     at the end of paragraph (4) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(5) 30 percent of the qualified geothermal heat pump 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1), as amended by 
     subsection (c), is amended by striking ``and'' at the end of 
     subparagraph (C), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) $2,000 with respect to any qualified geothermal heat 
     pump property expenditures.''.
       (3) Qualified geothermal heat pump property expenditure.--
     Section 25D(d), as amended by subsection (c), is amended by 
     adding at the end the following new paragraph:
       ``(5) Qualified geothermal heat pump property 
     expenditure.--
       ``(A) In general.--The term `qualified geothermal heat pump 
     property expenditure' means an expenditure for qualified 
     geothermal heat pump property installed on or in connection 
     with a dwelling unit located in the United States and used as 
     a residence by the taxpayer.
       ``(B) Qualified geothermal heat pump property.--The term 
     `qualified geothermal heat pump property' means any equipment 
     which--
       ``(i) uses the ground or ground water as a thermal energy 
     source to heat the dwelling unit referred to in subparagraph 
     (A) or as a thermal energy sink to cool such dwelling unit, 
     and
       ``(ii) meets the requirements of the Energy Star program 
     which are in effect at the time that the expenditure for such 
     equipment is made.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A), as amended by subsection (c), is 
     amended by striking ``and'' at the end of clause (iii), by 
     striking the period at the end of clause (iv) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(v) $6,667 in the case of any qualified geothermal heat 
     pump property expenditures.''.
       (e) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (f) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Solar electric property limitation.--The amendments 
     made by subsection (b) shall apply to taxable years beginning 
     after December 31, 2008.
       (3) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (e)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

     SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

     ``SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.

       ``(a) New Clean Renewable Energy Bond.--For purposes of 
     this subpart, the term `new clean renewable energy bond' 
     means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     governmental bodies, public power providers, or cooperative 
     electric companies for one or more qualified renewable energy 
     facilities,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any new clean renewable 
     energy bond shall be 70 percent of the amount so determined 
     without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds which may be designated under subsection (a) by any 
     issuer shall not exceed the limitation amount allocated under 
     this subsection to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national new clean renewable energy bond 
     limitation of $800,000,000 which shall be allocated by the 
     Secretary as provided in paragraph (3), except that--
       ``(A) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of public power providers,
       ``(B) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of governmental bodies, and
       ``(C) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of cooperative electric 
     companies.
       ``(3) Method of allocation.--
       ``(A) Allocation among public power providers.--After the 
     Secretary determines the qualified projects of public power 
     providers which are appropriate for receiving an allocation 
     of the national new clean renewable energy bond limitation, 
     the Secretary shall, to the maximum extent practicable, make 
     allocations among such projects in such manner that the 
     amount allocated to each such project bears the same ratio to 
     the cost of such project as the limitation under paragraph 
     (2)(A) bears to the cost of all such projects.
       ``(B) Allocation among governmental bodies and cooperative 
     electric companies.--The Secretary shall make allocations of 
     the amount of the national new clean renewable energy bond 
     limitation described in paragraphs (2)(B) and (2)(C) among 
     qualified projects of governmental bodies and cooperative 
     electric companies, respectively, in such manner as the 
     Secretary determines appropriate.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a qualified 
     facility (as determined under section 45(d) without regard to 
     paragraphs (8) and (10) thereof and to any placed in service 
     date) owned by a public power provider, a governmental body, 
     or a cooperative electric company.
       ``(2) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).
       ``(3) Governmental body.--The term `governmental body' 
     means any State or Indian tribal government, or any political 
     subdivision thereof.
       ``(4) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C).
       ``(5) Clean renewable energy bond lender.--The term `clean 
     renewable energy bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(6) Qualified issuer.--The term `qualified issuer' means 
     a public power provider, a cooperative electric company, a 
     governmental body, a clean renewable energy bond lender, or a 
     not-for-profit electric utility which has received a loan or 
     loan guarantee under the Rural Electrification Act.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d) is amended to read as 
     follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a qualified forestry conservation bond, or
       ``(B) a new clean renewable energy bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), (5), and (6).''.
       (2) Subparagraph (C) of section 54A(d)(2) is amended to 
     read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a qualified forestry conservation 
     bond, a purpose specified in section 54B(e), and
       ``(ii) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54C(a)(1).''.

[[Page 23679]]

       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54C. Qualified clean renewable energy bonds.''.

       (c) Extension for Clean Renewable Energy Bonds.--Subsection 
     (m) of section 54 is amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2009''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.

       (a) Treatment as Refined Coal.--
       (1) In general.--Subparagraph (A) of section 45(c)(7) of 
     the Internal Revenue Code of 1986 (relating to refined coal), 
     as amended by this Act, is amended to read as follows:
       ``(A) In general.--The term `refined coal' means a fuel--
       ``(i) which--

       ``(I) is a liquid, gaseous, or solid fuel produced from 
     coal (including lignite) or high carbon fly ash, including 
     such fuel used as a feedstock,
       ``(II) is sold by the taxpayer with the reasonable 
     expectation that it will be used for purpose of producing 
     steam,
       ``(III) is certified by the taxpayer as resulting (when 
     used in the production of steam) in a qualified emission 
     reduction, and
       ``(IV) is produced in such a manner as to result in an 
     increase of at least 50 percent in the market value of the 
     refined coal (excluding any increase caused by materials 
     combined or added during the production process), as compared 
     to the value of the feedstock coal, or

       ``(ii) which is steel industry fuel.''.
       (2) Steel industry fuel defined.--Paragraph (7) of section 
     45(c) of such Code is amended by adding at the end the 
     following new subparagraph:
       ``(C) Steel industry fuel.--
       ``(i) In general.--The term `steel industry fuel' means a 
     fuel which--

       ``(I) is produced through a process of liquifying coal 
     waste sludge and distributing it on coal, and
       ``(II) is used as a feedstock for the manufacture of coke.

       ``(ii) Coal waste sludge.--The term `coal waste sludge' 
     means the tar decanter sludge and related byproducts of the 
     coking process, including such materials that have been 
     stored in ground, in tanks and in lagoons, that have been 
     treated as hazardous wastes under applicable Federal 
     environmental rules absent liquefaction and processing with 
     coal into a feedstock for the manufacture of coke.''.
       (b) Credit Amount.--
       (1) In general.--Paragraph (8) of section 45(e) of the 
     Internal Revenue Code of 1986 (relating to refined coal 
     production facilities) is amended by adding at the end the 
     following new subparagraph
       ``(D) Special rule for steel industry fuel.--
       ``(i) In general.--In the case of a taxpayer who produces 
     steel industry fuel--

       ``(I) this paragraph shall be applied separately with 
     respect to steel industry fuel and other refined coal, and
       ``(II) in applying this paragraph to steel industry fuel, 
     the modifications in clause (ii) shall apply.

       ``(ii) Modifications.--

       ``(I) Credit amount.--Subparagraph (A) shall be applied by 
     substituting `$2 per barrel-of-oil equivalent' for `$4.375 
     per ton'.
       ``(II) Credit period.--In lieu of the 10-year period 
     referred to in clauses (i) and (ii)(II) of subparagraph (A), 
     the credit period shall be the period beginning on the later 
     of the date such facility was originally placed in service, 
     the date the modifications described in clause (iii) were 
     placed in service, or October 1, 2008, and ending on the 
     later of December 31, 2009, or the date which is 1 year after 
     the date such facility or the modifications described in 
     clause (iii) were placed in service.
       ``(III) No phaseout.--Subparagraph (B) shall not apply.

       ``(iii) Modifications.--The modifications described in this 
     clause are modifications to an existing facility which allow 
     such facility to produce steel industry fuel.
       ``(iv) Barrel-of-oil equivalent.--For purposes of this 
     subparagraph, a barrel-of-oil equivalent is the amount of 
     steel industry fuel that has a Btu content of 5,800,000 
     Btus.''.
       (2) Inflation adjustment.--Paragraph (2) of section 45(b) 
     of such Code is amended by inserting ``the $3 amount in 
     subsection (e)(8)(D)(ii)(I),'' after ``subsection 
     (e)(8)(A),''.
       (c) Termination.--Paragraph (8) of section 45(d) of the 
     Internal Revenue Code of 1986 (relating to refined coal 
     production facility), as amended by this Act, is amended to 
     read as follows:
       ``(8) Refined coal production facility.--In the case of a 
     facility that produces refined coal, the term `refined coal 
     production facility' means--
       ``(A) with respect to a facility producing steel industry 
     fuel, any facility (or any modification to a facility) which 
     is placed in service before January 1, 2010, and
       ``(B) with respect to any other facility producing refined 
     coal, any facility placed in service after the date of the 
     enactment of the American Jobs Creation Act of 2004 and 
     before January 1, 2010.''.
       (d) Coordination With Credit for Producing Fuel From a 
     Nonconventional Source.--
       (1) In general.--Subparagraph (B) of section 45(e)(9) of 
     the Internal Revenue Code of 1986 is amended--
       (A) by striking ``The term'' and inserting the following:
       ``(i) In general.--The term'', and
       (B) by adding at the end the following new clause:
       ``(ii) Exception for steel industry coal.--In the case of a 
     facility producing steel industry fuel, clause (i) shall not 
     apply to so much of the refined coal produced at such 
     facility as is steel industry fuel.''.
       (2) No double benefit.--Section 45K(g)(2) of such Code is 
     amended by adding at the end the following new subparagraph:
       ``(E) Coordination with section 45.--No credit shall be 
     allowed with respect to any qualified fuel which is steel 
     industry fuel (as defined in section 45(c)(7)) if a credit is 
     allowed to the taxpayer for such fuel under section 45.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to fuel produced and sold after September 30, 
     2008.

     SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC 
                   RESTRUCTURING POLICY.

       (a) Extension for Qualified Electric Utilities.--
       (1) In general.--Paragraph (3) of section 451(i) is amended 
     by inserting ``(before January 1, 2010, in the case of a 
     qualified electric utility)'' after ``January 1, 2008''.
       (2) Qualified electric utility.--Subsection (i) of section 
     451 is amended by redesignating paragraphs (6) through (10) 
     as paragraphs (7) through (11), respectively, and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) Qualified electric utility.--For purposes of this 
     subsection, the term `qualified electric utility' means a 
     person that, as of the date of the qualifying electric 
     transmission transaction, is vertically integrated, in that 
     it is both--
       ``(A) a transmitting utility (as defined in section 3(23) 
     of the Federal Power Act (16 U.S.C. 796(23))) with respect to 
     the transmission facilities to which the election under this 
     subsection applies, and
       ``(B) an electric utility (as defined in section 3(22) of 
     the Federal Power Act (16 U.S.C. 796(22))).''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.
       (c) Property Located Outside the United States Not Treated 
     as Exempt Utility Property.--Paragraph (5) of section 451(i) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Exception for property located outside the united 
     states.--The term `exempt utility property' shall not include 
     any property which is located outside the United States.''.
       (d) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.
       (3) Exception for property located outside the united 
     states.--The amendment made by subsection (c) shall apply to 
     transactions after the date of the enactment of this Act.

           Subtitle B--Carbon Mitigation and Coal Provisions

     SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48A(a) is 
     amended by striking ``and'' at the end of paragraph (1), by 
     striking the period at the end of paragraph (2) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(3) 30 percent of the qualified investment for such 
     taxable year in the case of projects described in clause 
     (iii) of subsection (d)(3)(B).''.
       (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) 
     is amended by striking ``$1,300,000,000'' and inserting 
     ``$2,550,000,000''.
       (c) Authorization of Additional Projects.--
       (1) In general.--Subparagraph (B) of section 48A(d)(3) is 
     amended to read as follows:
       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i), and
       ``(iii) $1,250,000,000 for advanced coal-based generation 
     technology projects the application for which is submitted 
     during the period described in paragraph (2)(A)(ii).''.

[[Page 23680]]

       (2) Application period for additional projects.--
     Subparagraph (A) of section 48A(d)(2) is amended to read as 
     follows:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(B) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in paragraph (3)(B)(iii) during the 3-year period beginning 
     at the earlier of the termination of the period described in 
     clause (i) or the date prescribed by the Secretary.''.
       (3) Capture and sequestration of carbon dioxide emissions 
     requirement.--
       (A) In general.--Section 48A(e)(1) is amended by striking 
     ``and'' at the end of subparagraph (E), by striking the 
     period at the end of subparagraph (F) and inserting ``; 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(G) in the case of any project the application for which 
     is submitted during the period described in subsection 
     (d)(2)(A)(ii), the project includes equipment which separates 
     and sequesters at least 65 percent (70 percent in the case of 
     an application for reallocated credits under subsection 
     (d)(4)) of such project's total carbon dioxide emissions.''.
       (B) Highest priority for projects which sequester carbon 
     dioxide emissions.--Section 48A(e)(3) is amended by striking 
     ``and'' at the end of subparagraph (A)(iii), by striking the 
     period at the end of subparagraph (B)(iii) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions.''.
       (C) Recapture of credit for failure to sequester.--Section 
     48A is amended by adding at the end the following new 
     subsection:
       ``(i) Recapture of Credit for Failure To Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements of subsection (e)(1)(G).''.
       (4) Additional priority for research partnerships.--Section 
     48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
       (A) by striking ``and'' at the end of clause (ii),
       (B) by redesignating clause (iii) as clause (iv), and
       (C) by inserting after clause (ii) the following new 
     clause:
       ``(iii) applicant participants who have a research 
     partnership with an eligible educational institution (as 
     defined in section 529(e)(5)), and''.
       (5) Clerical amendment.--Section 48A(e)(3) is amended by 
     striking ``integrated gasification combined cycle'' in the 
     heading and inserting ``certain''.
       (d) Disclosure of Allocations.--Section 48A(d) is amended 
     by adding at the end the following new paragraph:
       ``(5) Disclosure of allocations.--The Secretary shall, upon 
     making a certification under this subsection or section 
     48B(d), publicly disclose the identity of the applicant and 
     the amount of the credit certified with respect to such 
     applicant.''.
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to credits the application for which is submitted during the 
     period described in section 48A(d)(2)(A)(ii) of the Internal 
     Revenue Code of 1986 and which are allocated or reallocated 
     after the date of the enactment of this Act.
       (2) Disclosure of allocations.--The amendment made by 
     subsection (d) shall apply to certifications made after the 
     date of the enactment of this Act.
       (3) Clerical amendment.--The amendment made by subsection 
     (c)(5) shall take effect as if included in the amendment made 
     by section 1307(b) of the Energy Tax Incentives Act of 2005.

     SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48B(a) is 
     amended by inserting ``(30 percent in the case of credits 
     allocated under subsection (d)(1)(B))'' after ``20 percent''.
       (b) Expansion of Aggregate Credits.--Section 48B(d)(1) is 
     amended by striking ``shall not exceed $350,000,000'' and all 
     that follows and inserting ``shall not exceed--
       ``(A) $350,000,000, plus
       ``(B) $250,000,000 for qualifying gasification projects 
     that include equipment which separates and sequesters at 
     least 75 percent of such project's total carbon dioxide 
     emissions.''.
       (c) Recapture of Credit for Failure to Sequester.--Section 
     48B is amended by adding at the end the following new 
     subsection:
       ``(f) Recapture of Credit for Failure to Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements for such project under subsection 
     (d)(1).''.
       (d) Selection Priorities.--Section 48B(d) is amended by 
     adding at the end the following new paragraph:
       ``(4) Selection priorities.--In determining which 
     qualifying gasification projects to certify under this 
     section, the Secretary shall--
       ``(A) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions, and
       ``(B) give high priority to applicant participants who have 
     a research partnership with an eligible educational 
     institution (as defined in section 529(e)(5)).''.
       (e) Eligible Projects Include Transportation Grade Liquid 
     Fuels.--Section 48B(c)(7) (defining eligible entity) is 
     amended by striking ``and'' at the end of subparagraph (F), 
     by striking the period at the end of subparagraph (G) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(H) transportation grade liquid fuels.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to credits described in section 48B(d)(1)(B) of 
     the Internal Revenue Code of 1986 which are allocated or 
     reallocated after the date of the enactment of this Act.

     SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF 
                   BLACK LUNG DISABILITY TRUST FUND.

       (a) Extension of Temporary Increase.--Paragraph (2) of 
     section 4121(e) is amended--
       (1) by striking ``January 1, 2014'' in subparagraph (A) and 
     inserting ``December 31, 2018'', and
       (2) by striking ``January 1 after 1981'' in subparagraph 
     (B) and inserting ``December 31 after 2007''.
       (b) Restructuring of Trust Fund Debt.--
       (1) Definitions.--For purposes of this subsection--
       (A) Market value of the outstanding repayable advances, 
     plus accrued interest.--The term ``market value of the 
     outstanding repayable advances, plus accrued interest'' means 
     the present value (determined by the Secretary of the 
     Treasury as of the refinancing date and using the Treasury 
     rate as the discount rate) of the stream of principal and 
     interest payments derived assuming that each repayable 
     advance that is outstanding on the refinancing date is due on 
     the 30th anniversary of the end of the fiscal year in which 
     the advance was made to the Trust Fund, and that all such 
     principal and interest payments are made on September 30 of 
     the applicable fiscal year.
       (B) Refinancing date.--The term ``refinancing date'' means 
     the date occurring 2 days after the enactment of this Act.
       (C) Repayable advance.--The term ``repayable advance'' 
     means an amount that has been appropriated to the Trust Fund 
     in order to make benefit payments and other expenditures that 
     are authorized under section 9501 of the Internal Revenue 
     Code of 1986 and are required to be repaid when the Secretary 
     of the Treasury determines that monies are available in the 
     Trust Fund for such purpose.
       (D) Treasury rate.--The term ``Treasury rate'' means a rate 
     determined by the Secretary of the Treasury, taking into 
     consideration current market yields on outstanding marketable 
     obligations of the United States of comparable maturities.
       (E) Treasury 1-year rate.--The term ``Treasury 1-year 
     rate'' means a rate determined by the Secretary of the 
     Treasury, taking into consideration current market yields on 
     outstanding marketable obligations of the United States with 
     remaining periods to maturity of approximately 1 year, to 
     have been in effect as of the close of business 1 business 
     day prior to the date on which the Trust Fund issues 
     obligations to the Secretary of the Treasury under paragraph 
     (2)(B).
       (2) Refinancing of outstanding principal of repayable 
     advances and unpaid interest on such advances.--
       (A) Transfer to general fund.--On the refinancing date, the 
     Trust Fund shall repay the market value of the outstanding 
     repayable advances, plus accrued interest, by transferring 
     into the general fund of the Treasury the following sums:
       (i) The proceeds from obligations that the Trust Fund shall 
     issue to the Secretary of the Treasury in such amounts as the 
     Secretaries of Labor and the Treasury shall determine and 
     bearing interest at the Treasury rate, and that shall be in 
     such forms and denominations and be subject to such other 
     terms and conditions, including maturity, as the Secretary of 
     the Treasury shall prescribe.
       (ii) All, or that portion, of the appropriation made to the 
     Trust Fund pursuant to paragraph (3) that is needed to cover 
     the difference defined in that paragraph.
       (B) Repayment of obligations.--In the event that the Trust 
     Fund is unable to repay the obligations that it has issued to 
     the Secretary of the Treasury under subparagraph (A)(i) and 
     this subparagraph, or is unable to make benefit payments and 
     other authorized expenditures, the Trust Fund shall issue 
     obligations to the Secretary of the Treasury in such amounts 
     as may be necessary to make such repayments, payments, and 
     expenditures, with a maturity of 1 year, and bearing interest 
     at the Treasury 1-year rate. These obligations shall be in 
     such forms and denominations and be subject to such other 
     terms and conditions as the Secretary of the Treasury shall 
     prescribe.

[[Page 23681]]

       (C) Authority to issue obligations.--The Trust Fund is 
     authorized to issue obligations to the Secretary of the 
     Treasury under subparagraphs (A)(i) and (B). The Secretary of 
     the Treasury is authorized to purchase such obligations of 
     the Trust Fund. For the purposes of making such purchases, 
     the Secretary of the Treasury may use as a public debt 
     transaction the proceeds from the sale of any securities 
     issued under chapter 31 of title 31, United States Code, and 
     the purposes for which securities may be issued under such 
     chapter are extended to include any purchase of such Trust 
     Fund obligations under this subparagraph.
       (3) One-time appropriation.--There is hereby appropriated 
     to the Trust Fund an amount sufficient to pay to the general 
     fund of the Treasury the difference between--
       (A) the market value of the outstanding repayable advances, 
     plus accrued interest; and
       (B) the proceeds from the obligations issued by the Trust 
     Fund to the Secretary of the Treasury under paragraph 
     (2)(A)(i).
       (4) Prepayment of trust fund obligations.--The Trust Fund 
     is authorized to repay any obligation issued to the Secretary 
     of the Treasury under subparagraphs (A)(i) and (B) of 
     paragraph (2) prior to its maturity date by paying a 
     prepayment price that would, if the obligation being prepaid 
     (including all unpaid interest accrued thereon through the 
     date of prepayment) were purchased by a third party and held 
     to the maturity date of such obligation, produce a yield to 
     the third-party purchaser for the period from the date of 
     purchase to the maturity date of such obligation 
     substantially equal to the Treasury yield on outstanding 
     marketable obligations of the United States having a 
     comparable maturity to this period.

     SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO 
                   CERTAIN COAL PRODUCERS AND EXPORTERS.

       (a) Refund.--
       (1) Coal producers.--
       (A) In general.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, if--
       (i) a coal producer establishes that such coal producer, or 
     a party related to such coal producer, exported coal produced 
     by such coal producer to a foreign country or shipped coal 
     produced by such coal producer to a possession of the United 
     States, or caused such coal to be exported or shipped, the 
     export or shipment of which was other than through an 
     exporter who meets the requirements of paragraph (2),
       (ii) such coal producer filed an excise tax return on or 
     after October 1, 1990, and on or before the date of the 
     enactment of this Act, and
       (iii) such coal producer files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,

     then the Secretary shall pay to such coal producer an amount 
     equal to the tax paid under section 4121 of such Code on such 
     coal exported or shipped by the coal producer or a party 
     related to such coal producer, or caused by the coal producer 
     or a party related to such coal producer to be exported or 
     shipped.
       (B) Special rules for certain taxpayers.--For purposes of 
     this section--
       (i) In general.--If a coal producer or a party related to a 
     coal producer has received a judgment described in clause 
     (iii), such coal producer shall be deemed to have established 
     the export of coal to a foreign country or shipment of coal 
     to a possession of the United States under subparagraph 
     (A)(i).
       (ii) Amount of payment.--If a taxpayer described in clause 
     (i) is entitled to a payment under subparagraph (A), the 
     amount of such payment shall be reduced by any amount paid 
     pursuant to the judgment described in clause (iii).
       (iii) Judgment described.--A judgment is described in this 
     subparagraph if such judgment--

       (I) is made by a court of competent jurisdiction within the 
     United States,
       (II) relates to the constitutionality of any tax paid on 
     exported coal under section 4121 of the Internal Revenue Code 
     of 1986, and
       (III) is in favor of the coal producer or the party related 
     to the coal producer.

       (2) Exporters.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, and a judgment described in paragraph (1)(B)(iii) of 
     this subsection, if--
       (A) an exporter establishes that such exporter exported 
     coal to a foreign country or shipped coal to a possession of 
     the United States, or caused such coal to be so exported or 
     shipped,
       (B) such exporter filed a tax return on or after October 1, 
     1990, and on or before the date of the enactment of this Act, 
     and
       (C) such exporter files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,

     then the Secretary shall pay to such exporter an amount equal 
     to $0.825 per ton of such coal exported by the exporter or 
     caused to be exported or shipped, or caused to be exported or 
     shipped, by the exporter.
       (b) Limitations.--Subsection (a) shall not apply with 
     respect to exported coal if a settlement with the Federal 
     Government has been made with and accepted by, the coal 
     producer, a party related to such coal producer, or the 
     exporter, of such coal, as of the date that the claim is 
     filed under this section with respect to such exported coal. 
     For purposes of this subsection, the term ``settlement with 
     the Federal Government'' shall not include any settlement or 
     stipulation entered into as of the date of the enactment of 
     this Act, the terms of which contemplate a judgment 
     concerning which any party has reserved the right to file an 
     appeal, or has filed an appeal.
       (c) Subsequent Refund Prohibited.--No refund shall be made 
     under this section to the extent that a credit or refund of 
     such tax on such exported or shipped coal has been paid to 
     any person.
       (d) Definitions.--For purposes of this section--
       (1) Coal producer.--The term ``coal producer'' means the 
     person in whom is vested ownership of the coal immediately 
     after the coal is severed from the ground, without regard to 
     the existence of any contractual arrangement for the sale or 
     other disposition of the coal or the payment of any royalties 
     between the producer and third parties. The term includes any 
     person who extracts coal from coal waste refuse piles or from 
     the silt waste product which results from the wet washing (or 
     similar processing) of coal.
       (2) Exporter.--The term ``exporter'' means a person, other 
     than a coal producer, who does not have a contract, fee 
     arrangement, or any other agreement with a producer or seller 
     of such coal to export or ship such coal to a third party on 
     behalf of the producer or seller of such coal and--
       (A) is indicated in the shipper's export declaration or 
     other documentation as the exporter of record, or
       (B) actually exported such coal to a foreign country or 
     shipped such coal to a possession of the United States, or 
     caused such coal to be so exported or shipped.
       (3) Related party.--The term ``a party related to such coal 
     producer'' means a person who--
       (A) is related to such coal producer through any degree of 
     common management, stock ownership, or voting control,
       (B) is related (within the meaning of section 144(a)(3) of 
     the Internal Revenue Code of 1986) to such coal producer, or
       (C) has a contract, fee arrangement, or any other agreement 
     with such coal producer to sell such coal to a third party on 
     behalf of such coal producer.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Treasury or the Secretary's designee.
       (e) Timing of Refund.--With respect to any claim for refund 
     filed pursuant to this section, the Secretary shall determine 
     whether the requirements of this section are met not later 
     than 180 days after such claim is filed. If the Secretary 
     determines that the requirements of this section are met, the 
     claim for refund shall be paid not later than 180 days after 
     the Secretary makes such determination.
       (f) Interest.--Any refund paid pursuant to this section 
     shall be paid by the Secretary with interest from the date of 
     overpayment determined by using the overpayment rate and 
     method under section 6621 of the Internal Revenue Code of 
     1986.
       (g) Denial of Double Benefit.--The payment under subsection 
     (a) with respect to any coal shall not exceed--
       (1) in the case of a payment to a coal producer, the amount 
     of tax paid under section 4121 of the Internal Revenue Code 
     of 1986 with respect to such coal by such coal producer or a 
     party related to such coal producer, and
       (2) in the case of a payment to an exporter, an amount 
     equal to $0.825 per ton with respect to such coal exported by 
     the exporter or caused to be exported by the exporter.
       (h) Application of Section.--This section applies only to 
     claims on coal exported or shipped on or after October 1, 
     1990, through the date of the enactment of this Act.
       (i) Standing Not Conferred.--
       (1) Exporters.--With respect to exporters, this section 
     shall not confer standing upon an exporter to commence, or 
     intervene in, any judicial or administrative proceeding 
     concerning a claim for refund by a coal producer of any 
     Federal or State tax, fee, or royalty paid by the coal 
     producer.
       (2) Coal producers.--With respect to coal producers, this 
     section shall not confer standing upon a coal producer to 
     commence, or intervene in, any judicial or administrative 
     proceeding concerning a claim for refund by an exporter of 
     any Federal or State tax, fee, or royalty paid by the 
     producer and alleged to have been passed on to an exporter.

     SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

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

     ``SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

       ``(a) General Rule.--For purposes of section 38, the carbon 
     dioxide sequestration credit for any taxable year is an 
     amount equal to the sum of--
       ``(1) $20 per metric ton of qualified carbon dioxide which 
     is--

[[Page 23682]]

       ``(A) captured by the taxpayer at a qualified facility, and
       ``(B) disposed of by the taxpayer in secure geological 
     storage, and
       ``(2) $10 per metric ton of qualified carbon dioxide which 
     is--
       ``(A) captured by the taxpayer at a qualified facility, and
       ``(B) used by the taxpayer as a tertiary injectant in a 
     qualified enhanced oil or natural gas recovery project.
       ``(b) Qualified Carbon Dioxide.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified carbon dioxide' 
     means carbon dioxide captured from an industrial source 
     which--
       ``(A) would otherwise be released into the atmosphere as 
     industrial emission of greenhouse gas, and
       ``(B) is measured at the source of capture and verified at 
     the point of disposal or injection.
       ``(2) Recycled carbon dioxide.--The term `qualified carbon 
     dioxide' includes the initial deposit of captured carbon 
     dioxide used as a tertiary injectant. Such term does not 
     include carbon dioxide that is re-captured, recycled, and re-
     injected as part of the enhanced oil and natural gas recovery 
     process.
       ``(c) Qualified Facility.--For purposes of this section, 
     the term `qualified facility' means any industrial facility--
       ``(1) which is owned by the taxpayer,
       ``(2) at which carbon capture equipment is placed in 
     service, and
       ``(3) which captures not less than 500,000 metric tons of 
     carbon dioxide during the taxable year.
       ``(d) Special Rules and Other Definitions.--For purposes of 
     this section--
       ``(1) Only carbon dioxide captured and disposed of or used 
     within the united states taken into account.--The credit 
     under this section shall apply only with respect to qualified 
     carbon dioxide the capture and disposal or use of which is 
     within--
       ``(A) the United States (within the meaning of section 
     638(1)), or
       ``(B) a possession of the United States (within the meaning 
     of section 638(2)).
       ``(2) Secure geological storage.--The Secretary, in 
     consultation with the Administrator of the Environmental 
     Protection Agency, shall establish regulations for 
     determining adequate security measures for the geological 
     storage of carbon dioxide under subsection (a)(1)(B) such 
     that the carbon dioxide does not escape into the atmosphere. 
     Such term shall include storage at deep saline formations and 
     unminable coal seems under such conditions as the Secretary 
     may determine under such regulations.
       ``(3) Tertiary injectant.--The term `tertiary injectant' 
     has the same meaning as when used within section 193(b)(1).
       ``(4) Qualified enhanced oil or natural gas recovery 
     project.--The term `qualified enhanced oil or natural gas 
     recovery project' has the meaning given the term `qualified 
     enhanced oil recovery project' by section 43(c)(2), by 
     substituting `crude oil or natural gas' for `crude oil' in 
     subparagraph (A)(i) thereof.
       ``(5) Credit attributable to taxpayer.--Any credit under 
     this section shall be attributable to the person that 
     captures and physically or contractually ensures the disposal 
     of or the use as a tertiary injectant of the qualified carbon 
     dioxide, except to the extent provided in regulations 
     prescribed by the Secretary.
       ``(6) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any qualified carbon 
     dioxide which ceases to be captured, disposed of, or used as 
     a tertiary injectant in a manner consistent with the 
     requirements of this section.
       ``(7) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2009, there shall be 
     substituted for each dollar amount contained in subsection 
     (a) an amount equal to the product of--
       ``(A) such dollar amount, multiplied by
       ``(B) the inflation adjustment factor for such calendar 
     year determined under section 43(b)(3)(B) for such calendar 
     year, determined by substituting `2008' for `1990'.
       ``(e) Application of Section.--The credit under this 
     section shall apply with respect to qualified carbon dioxide 
     before the end of the calendar year in which the Secretary, 
     in consultation with the Administrator of the Environmental 
     Protection Agency, certifies that 75,000,000 metric tons of 
     qualified carbon dioxide have been captured and disposed of 
     or used as a tertiary injectant.''.
       (b) Conforming Amendment.--Section 38(b) (relating to 
     general business credit) is amended by striking ``plus'' at 
     the end of paragraph (32), by striking the period at the end 
     of paragraph (33) and inserting ``, plus'', and by adding at 
     the end of following new paragraph:
       ``(34) the carbon dioxide sequestration credit determined 
     under section 45Q(a).''.
       (c) Clerical Amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 (relating to other 
     credits) is amended by adding at the end the following new 
     section:

``Sec. 45Q. Credit for carbon dioxide sequestration.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to carbon dioxide captured after the date of the 
     enactment of this Act.

     SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL 
                   SOURCE CARBON DIOXIDE TREATED AS QUALIFYING 
                   INCOME FOR PUBLICLY TRADED PARTNERSHIPS.

       (a) In General.--Subparagraph (E) of section 7704(d)(1) 
     (defining qualifying income) is amended by inserting ``or 
     industrial source carbon dioxide'' after ``timber)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act, 
     in taxable years ending after such date.

     SEC. 117. CARBON AUDIT OF THE TAX CODE.

       (a) Study.--The Secretary of the Treasury shall enter into 
     an agreement with the National Academy of Sciences to 
     undertake a comprehensive review of the Internal Revenue Code 
     of 1986 to identify the types of and specific tax provisions 
     that have the largest effects on carbon and other greenhouse 
     gas emissions and to estimate the magnitude of those effects.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to Congress a report containing the results of study 
     authorized under this section.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,500,000 for 
     the period of fiscal years 2009 and 2010.

     TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

     SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 
                   DEPRECIATION FOR BIOMASS ETHANOL PLANT 
                   PROPERTY.

       (a) In General.--Paragraph (3) of section 168(l) is amended 
     to read as follows:
       ``(3) Cellulosic biofuel.--The term `cellulosic biofuel' 
     means any liquid fuel which is produced from any 
     lignocellulosic or hemicellulosic matter that is available on 
     a renewable or recurring basis.''.
       (b) Conforming Amendments.--Subsection (l) of section 168 
     is amended--
       (1) by striking ``cellulosic biomass ethanol'' each place 
     it appears and inserting ``cellulosic biofuel'',
       (2) by striking ``Cellulosic Biomass Ethanol'' in the 
     heading of such subsection and inserting ``Cellulosic 
     Biofuel'', and
       (3) by striking ``cellulosic biomass ethanol'' in the 
     heading of paragraph (2) thereof and inserting ``cellulosic 
     biofuel''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2009''.
       (b) Increase in Rate of Credit.--
       (1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of 
     section 40A(b) are each amended by striking ``50 cents'' and 
     inserting ``$1.00''.
       (2) Excise tax credit.--Paragraph (2) of section 6426(c) is 
     amended to read as follows:
       ``(2) Applicable amount.--For purposes of this subsection, 
     the applicable amount is $1.00.''.
       (3) Conforming amendments.--
       (A) Subsection (b) of section 40A is amended by striking 
     paragraph (3) and by redesignating paragraphs (4) and (5) as 
     paragraphs (3) and (4), respectively.
       (B) Paragraph (2) of section 40A(f) is amended to read as 
     follows:
       ``(2) Exception.--Subsection (b)(4) shall not apply with 
     respect to renewable diesel.''.
       (C) Paragraphs (2) and (3) of section 40A(e) are each 
     amended by striking ``subsection (b)(5)(C)'' and inserting 
     ``subsection (b)(4)(C)''.
       (D) Clause (ii) of section 40A(d)(3)(C) is amended by 
     striking ``subsection (b)(5)(B)'' and inserting ``subsection 
     (b)(4)(B)''.
       (c) Uniform Treatment of Diesel Produced From Biomass.--
     Paragraph (3) of section 40A(f) is amended--
       (1) by striking ``diesel fuel'' and inserting ``liquid 
     fuel'',
       (2) by striking ``using a thermal depolymerization 
     process'', and
       (3) by inserting ``, or other equivalent standard approved 
     by the Secretary'' after ``D396''.
       (d) Coproduction of Renewable Diesel With Petroleum 
     Feedstock.--
       (1) In general.--Paragraph (3) of section 40A(f) is amended 
     by adding at the end the following new sentences: ``Such term 
     does not include any fuel derived from coprocessing biomass 
     with a feedstock which is not biomass. For purposes of this 
     paragraph, the term `biomass' has the meaning given such term 
     by section 45K(c)(3).''.
       (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
     is amended by striking ``(as defined in section 45K(c)(3))''.
       (e) Eligibility of Certain Aviation Fuel.--Subsection (f) 
     of section 40A (relating to renewable diesel) is amended by 
     adding at the end the following new paragraph:
       ``(4) Certain aviation fuel.--
       ``(A) In general.--Except as provided in the last 3 
     sentences of paragraph (3), the

[[Page 23683]]

     term `renewable diesel' shall include fuel derived from 
     biomass which meets the requirements of a Department of 
     Defense specification for military jet fuel or an American 
     Society of Testing and Materials specification for aviation 
     turbine fuel.
       ``(B) Application of mixture credits.--In the case of fuel 
     which is treated as renewable diesel solely by reason of 
     subparagraph (A), subsection (b)(1) and section 6426(c) shall 
     be applied with respect to such fuel by treating kerosene as 
     though it were diesel fuel.''.
       (f) Modification Relating to Definition of Agri-
     Biodiesel.--Paragraph (2) of section 40A(d) (relating to 
     agri-biodiesel) is amended by striking ``and mustard seeds'' 
     and inserting ``mustard seeds, and camelina''.
       (g) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to fuel produced, and sold or used, after December 31, 2008.
       (2) Coproduction of renewable diesel with petroleum 
     feedstock.--The amendment made by subsection (d) shall apply 
     to fuel produced, and sold or used, after the date of the 
     enactment of this Act.

     SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE AN INCENTIVE FOR UNITED STATES 
                   PRODUCTION.

       (a) Alcohol Fuels Credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(7) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Biodiesel Fuels Credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (c) Excise Tax Credit.--
       (1) In general.--Section 6426 is amended by adding at the 
     end the following new subsection:
       ``(i) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.

     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (2) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(i).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to claims for credit or payment made on or after 
     May 15, 2008.

     SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 
                   CREDIT.

       (a) Extension.--
       (1) Alternative fuel credit.--Paragraph (4) of section 
     6426(d) (relating to alternative fuel credit) is amended by 
     striking ``September 30, 2009'' and inserting ``December 31, 
     2009''.
       (2) Alternative fuel mixture credit.--Paragraph (3) of 
     section 6426(e) (relating to alternative fuel mixture credit) 
     is amended by striking ``September 30, 2009'' and inserting 
     ``December 31, 2009''.
       (3) Payments.--Subparagraph (C) of section 6427(e)(5) 
     (relating to termination) is amended by striking ``September 
     30, 2009'' and inserting ``December 31, 2009''.
       (b) Modifications.--
       (1) Alternative fuel to include compressed or liquified 
     biomass gas.--Paragraph (2) of section 6426(d) (relating to 
     alternative fuel credit) is amended by striking ``and'' at 
     the end of subparagraph (E), by redesignating subparagraph 
     (F) as subparagraph (G), and by inserting after subparagraph 
     (E) the following new subparagraph:
       ``(F) compressed or liquefied gas derived from biomass (as 
     defined in section 45K(c)(3)), and''.
       (2) Credit allowed for aviation use of fuel.--Paragraph (1) 
     of section 6426(d) is amended by inserting ``sold by the 
     taxpayer for use as a fuel in aviation,'' after 
     ``motorboat,''.
       (c) Carbon Capture Requirement for Certain Fuels.--
       (1) In general.--Subsection (d) of section 6426, as amended 
     by subsection (a), is amended by redesignating paragraph (4) 
     as paragraph (5) and by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Carbon capture requirement.--
       ``(A) In general.--The requirements of this paragraph are 
     met if the fuel is certified, under such procedures as 
     required by the Secretary, as having been derived from coal 
     produced at a gasification facility which separates and 
     sequesters not less than the applicable percentage of such 
     facility's total carbon dioxide emissions.
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage is--
       ``(i) 50 percent in the case of fuel produced after 
     September 30, 2009, and on or before December 30, 2009, and
       ``(ii) 75 percent in the case of fuel produced after 
     December 30, 2009.''.
       (2) Conforming amendment.--Subparagraph (E) of section 
     6426(d)(2) is amended by inserting ``which meets the 
     requirements of paragraph (4) and which is'' after ``any 
     liquid fuel''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after the date of the 
     enactment of this Act.

     SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
                   MOTOR VEHICLES.

       (a) Plug-in Electric Drive Motor Vehicle Credit.--Subpart B 
     of part IV of subchapter A of chapter 1 (relating to other 
     credits) is amended by adding at the end the following new 
     section:

     ``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
                   VEHICLES.

       ``(a) Allowance of Credit.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the applicable amount with respect to each 
     new qualified plug-in electric drive motor vehicle placed in 
     service by the taxpayer during the taxable year.
       ``(2) Applicable amount.--For purposes of paragraph (1), 
     the applicable amount is sum of--
       ``(A) $2,500, plus
       ``(B) $417 for each kilowatt hour of traction battery 
     capacity in excess of 4 kilowatt hours.
       ``(b) Limitations.--
       ``(1) Limitation based on weight.--The amount of the credit 
     allowed under subsection (a) by reason of subsection (a)(2) 
     shall not exceed--
       ``(A) $7,500, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of not more than 10,000 pounds,
       ``(B) $10,000, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 10,000 pounds but not more than 14,000 
     pounds,
       ``(C) $12,500, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $15,000, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Limitation on number of passenger vehicles and light 
     trucks eligible for credit.--
       ``(A) In general.--In the case of a new qualified plug-in 
     electric drive motor vehicle sold during the phaseout period, 
     only the applicable percentage of the credit otherwise 
     allowable under subsection (a) shall be allowed.
       ``(B) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the total number of such new 
     qualified plug-in electric drive motor vehicles sold for use 
     in the United States after December 31, 2008, is at least 
     250,000.
       ``(C) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage is--
       ``(i) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(ii) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(iii) 0 percent for each calendar quarter thereafter.
       ``(D) Controlled groups.--Rules similar to the rules of 
     section 30B(f)(4) shall apply for purposes of this 
     subsection.
       ``(c) New Qualified Plug-in Electric Drive Motor Vehicle.--
     For purposes of this section, the term `new qualified plug-in 
     electric drive motor vehicle' means a motor vehicle--
       ``(1) which draws propulsion using a traction battery with 
     at least 4 kilowatt hours of capacity,
       ``(2) which uses an offboard source of energy to recharge 
     such battery,
       ``(3) which, in the case of a passenger vehicle or light 
     truck which has a gross vehicle weight rating of not more 
     than 8,500 pounds, has received a certificate of conformity 
     under the Clean Air Act and meets or exceeds the equivalent 
     qualifying California low emission vehicle standard under 
     section 243(e)(2) of the Clean Air Act for that make and 
     model year, and

[[Page 23684]]

       ``(A) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less, the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle, and
       ``(B) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established,
       ``(4) the original use of which commences with the 
     taxpayer,
       ``(5) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(6) which is made by a manufacturer.
       ``(d) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the credit which would be allowed under 
     subsection (a) for any taxable year (determined without 
     regard to this subsection) that is attributable to property 
     of a character subject to an allowance for depreciation shall 
     be treated as a credit listed in section 38(b) for such 
     taxable year (and not allowed under subsection (a)).
       ``(2) Personal credit.--
       ``(A) In general.--For purposes of this title, the credit 
     allowed under subsection (a) for any taxable year (determined 
     after application of paragraph (1)) shall be treated as a 
     credit allowable under subpart A for such taxable year.
       ``(B) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall not 
     exceed the excess of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under subpart A 
     (other than this section and sections 23 and 25D) and section 
     27 for the taxable year.
       ``(e) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(3) Traction battery capacity.--Traction battery capacity 
     shall be measured in kilowatt hours from a 100 percent state 
     of charge to a zero percent state of charge.
       ``(4) Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed.
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter for a new qualified 
     plug-in electric drive motor vehicle shall be reduced by the 
     amount of credit allowed under subsection (a) for such 
     vehicle for the taxable year.
       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle the use of which is described in paragraph (3) or (4) 
     of section 50(b) and which is not subject to a lease, the 
     person who sold such vehicle to the person or entity using 
     such vehicle shall be treated as the taxpayer that placed 
     such vehicle in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such vehicle (determined without regard to subsection 
     (b)(2)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects not to have this section apply to such vehicle.
       ``(10) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(f) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(g) Termination.--This section shall not apply to 
     property purchased after December 31, 2014.''.
       (b) Coordination With Alternative Motor Vehicle Credit.--
     Section 30B(d)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Exclusion of plug-in vehicles.--Any vehicle with 
     respect to which a credit is allowable under section 30D 
     (determined without regard to subsection (d) thereof) shall 
     not be taken into account under this section.''.
       (c) Credit Made Part of General Business Credit.--Section 
     38(b), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (33), by striking the period 
     at the end of paragraph (34) and inserting ``plus'', and by 
     adding at the end the following new paragraph:
       ``(35) the portion of the new qualified plug-in electric 
     drive motor vehicle credit to which section 30D(d)(1) 
     applies.''.
       (d) Conforming Amendments.--
       (1)(A) Section 24(b)(3)(B), as amended by section 106, is 
     amended by striking ``and 25D'' and inserting ``25D, and 
     30D''.
       (B) Section 25(e)(1)(C)(ii) is amended by inserting 
     ``30D,'' after ``25D,''.
       (C) Section 25B(g)(2), as amended by section 106, is 
     amended by striking ``and 25D'' and inserting ``, 25D, and 
     30D''.
       (D) Section 26(a)(1), as amended by section 106, is amended 
     by striking ``and 25D'' and inserting ``25D, and 30D''.
       (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
     and inserting ``25D, and 30D''.
       (2) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (35), by striking the period at the end of 
     paragraph (36) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(37) to the extent provided in section 30D(e)(4).''.
       (3) Section 6501(m) is amended by inserting ``30D(e)(9),'' 
     after ``30C(e)(5),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.
       (f) Application of EGTRRA Sunset.--The amendment made by 
     subsection (d)(1)(A) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provision of such Act to which such 
     amendment relates.

     SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION 
                   UNITS AND ADVANCED INSULATION.

       (a) In General.--Section 4053 is amended by adding at the 
     end the following new paragraphs:
       ``(9) Idling reduction device.--Any device or system of 
     devices which--
       ``(A) is designed to provide to a vehicle those services 
     (such as heat, air conditioning, or electricity) that would 
     otherwise require the operation of the main drive engine 
     while the vehicle is temporarily parked or remains stationary 
     using one or more devices affixed to a tractor, and
       ``(B) is determined by the Administrator of the 
     Environmental Protection Agency, in consultation with the 
     Secretary of Energy and the Secretary of Transportation, to 
     reduce idling of such vehicle at a motor vehicle rest stop or 
     other location where such vehicles are temporarily parked or 
     remain stationary.
       ``(10) Advanced insulation.--Any insulation that has an R 
     value of not less than R35 per inch.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales or installations after the date of the 
     enactment of this Act.

     SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

       (a) Extension of Credit.--Paragraph (2) of section 30C(g) 
     is amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Inclusion of Electricity as a Clean-Burning Fuel.--
     Section 30C(c)(2) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Electricity.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

[[Page 23685]]



     SEC. 208. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS 
                   AND MIXTURES, BIODIESEL FUELS AND MIXTURES, AND 
                   ALTERNATIVE FUELS AND MIXTURES TREATED AS 
                   QUALIFYING INCOME FOR PUBLICLY TRADED 
                   PARTNERSHIPS.

       (a) In General.--Subparagraph (E) of section 7704(d)(1), as 
     amended by this Act, is amended by striking ``or industrial 
     source carbon dioxide'' and inserting ``, industrial source 
     carbon dioxide, or the transportation or storage of any fuel 
     described in subsection (b), (c), (d), or (e) of section 
     6426, or any alcohol fuel defined in section 6426(b)(4)(A) or 
     any biodiesel fuel as defined in section 40A(d)(1)'' after 
     ``timber)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act, 
     in taxable years ending after such date.

     SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE 
                   CERTAIN REFINERIES.

       (a) Extension.--Paragraph (1) of section 179C(c) (relating 
     to qualified refinery property) is amended--
       (1) by striking ``January 1, 2012'' in subparagraph (B) and 
     inserting ``January 1, 2014'', and
       (2) by striking ``January 1, 2008'' each place it appears 
     in subparagraph (F) and inserting ``January 1, 2010''.
       (b) Inclusion of Fuel Derived From Shale and Tar Sands.--
       (1) In general.--Subsection (d) of section 179C is amended 
     by inserting ``, or directly from shale or tar sands'' after 
     ``(as defined in section 45K(c))''.
       (2) Conforming amendment.--Paragraph (2) of section 179C(e) 
     is amended by inserting ``shale, tar sands, or'' before 
     ``qualified fuels''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON 
                   PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS 
                   PRODUCED FROM MARGINAL PROPERTIES.

       Subparagraph (H) of section 613A(c)(6) (relating to oil and 
     gas produced from marginal properties) is amended by striking 
     ``for any taxable year'' and all that follows and inserting 
     ``for any taxable year--
       ``(i) beginning after December 31, 1997, and before January 
     1, 2008, or
       ``(ii) beginning after December 31, 2008, and before 
     January 1, 2010.''.

     SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

       (a) In General.--Paragraph (1) of section 132(f) is amended 
     by adding at the end the following:
       ``(D) Any qualified bicycle commuting reimbursement.''.
       (b) Limitation on Exclusion.--Paragraph (2) of section 
     132(f) 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) the applicable annual limitation in the case of any 
     qualified bicycle commuting reimbursement.''.
       (c) Definitions.--Paragraph (5) of section 132(f) is 
     amended by adding at the end the following:
       ``(F) Definitions related to bicycle commuting 
     reimbursement.--
       ``(i) Qualified bicycle commuting reimbursement.--The term 
     `qualified bicycle commuting reimbursement' means, with 
     respect to any calendar year, any employer reimbursement 
     during the 15-month period beginning with the first day of 
     such calendar year for reasonable expenses incurred by the 
     employee during such calendar year for the purchase of a 
     bicycle and bicycle improvements, repair, and storage, if 
     such bicycle is regularly used for travel between the 
     employee's residence and place of employment.
       ``(ii) Applicable annual limitation.--The term `applicable 
     annual limitation' means, with respect to any employee for 
     any calendar year, the product of $20 multiplied by the 
     number of qualified bicycle commuting months during such 
     year.
       ``(iii) Qualified bicycle commuting month.--The term 
     `qualified bicycle commuting month' means, with respect to 
     any employee, any month during which such employee--

       ``(I) regularly uses the bicycle for a substantial portion 
     of the travel between the employee's residence and place of 
     employment, and
       ``(II) does not receive any benefit described in 
     subparagraph (A), (B), or (C) of paragraph (1).''.

       (d) Constructive Receipt of Benefit.--Paragraph (4) of 
     section 132(f) is amended by inserting ``(other than a 
     qualified bicycle commuting reimbursement)'' after 
     ``qualified transportation fringe''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

        TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS

     SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as amended by section 107, is amended by adding at 
     the end the following new section:

     ``SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.

       ``(a) Qualified Energy Conservation Bond.--For purposes of 
     this subchapter, the term `qualified energy conservation 
     bond' means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified conservation 
     purposes,
       ``(2) the bond is issued by a State or local government, 
     and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any qualified energy 
     conservation bond shall be 70 percent of the amount so 
     determined without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (e).
       ``(d) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $800,000,000.
       ``(e) Allocations.--
       ``(1) In general.--The limitation applicable under 
     subsection (d) shall be allocated by the Secretary among the 
     States in proportion to the population of the States.
       ``(2) Allocations to largest local governments.--
       ``(A) In general.--In the case of any State in which there 
     is a large local government, each such local government shall 
     be allocated a portion of such State's allocation which bears 
     the same ratio to the State's allocation (determined without 
     regard to this subparagraph) as the population of such large 
     local government bears to the population of such State.
       ``(B) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local government 
     may be reallocated by such local government to the State in 
     which such local government is located.
       ``(C) Large local government.--For purposes of this 
     section, the term `large local government' means any 
     municipality or county if such municipality or county has a 
     population of 100,000 or more.
       ``(3) Allocation to issuers; restriction on private 
     activity bonds.--Any allocation under this subsection to a 
     State or large local government shall be allocated by such 
     State or large local government to issuers within the State 
     in a manner that results in not less than 70 percent of the 
     allocation to such State or large local government being used 
     to designate bonds which are not private activity bonds.
       ``(f) Qualified Conservation Purpose.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified conservation 
     purpose' means any of the following:
       ``(A) Capital expenditures incurred for purposes of--
       ``(i) reducing energy consumption in publicly-owned 
     buildings by at least 20 percent,
       ``(ii) implementing green community programs,
       ``(iii) rural development involving the production of 
     electricity from renewable energy resources, or
       ``(iv) any qualified facility (as determined under section 
     45(d) without regard to paragraphs (8) and (10) thereof and 
     without regard to any placed in service date).
       ``(B) Expenditures with respect to research facilities, and 
     research grants, to support research in--
       ``(i) development of cellulosic ethanol or other nonfossil 
     fuels,
       ``(ii) technologies for the capture and sequestration of 
     carbon dioxide produced through the use of fossil fuels,
       ``(iii) increasing the efficiency of existing technologies 
     for producing nonfossil fuels,
       ``(iv) automobile battery technologies and other 
     technologies to reduce fossil fuel consumption in 
     transportation, or
       ``(v) technologies to reduce energy use in buildings.
       ``(C) Mass commuting facilities and related facilities that 
     reduce the consumption of energy, including expenditures to 
     reduce pollution from vehicles used for mass commuting.
       ``(D) Demonstration projects designed to promote the 
     commercialization of--
       ``(i) green building technology,
       ``(ii) conversion of agricultural waste for use in the 
     production of fuel or otherwise,
       ``(iii) advanced battery manufacturing technologies,
       ``(iv) technologies to reduce peak use of electricity, or
       ``(v) technologies for the capture and sequestration of 
     carbon dioxide emitted from combusting fossil fuels in order 
     to produce electricity.
       ``(E) Public education campaigns to promote energy 
     efficiency.
       ``(2) Special rules for private activity bonds.--For 
     purposes of this section, in the case of any private activity 
     bond, the term `qualified conservation purposes' shall not 
     include any expenditure which is not a capital expenditure.

[[Page 23686]]

       ``(g) Population.--
       ``(1) In general.--The population of any State or local 
     government shall be determined for purposes of this section 
     as provided in section 146(j) for the calendar year which 
     includes the date of the enactment of this section.
       ``(2) Special rule for counties.--In determining the 
     population of any county for purposes of this section, any 
     population of such county which is taken into account in 
     determining the population of any municipality which is a 
     large local government shall not be taken into account in 
     determining the population of such county.
       ``(h) Application to Indian Tribal Governments.--An Indian 
     tribal government shall be treated for purposes of this 
     section in the same manner as a large local government, 
     except that--
       ``(1) an Indian tribal government shall be treated for 
     purposes of subsection (e) as located within a State to the 
     extent of so much of the population of such government as 
     resides within such State, and
       ``(2) any bond issued by an Indian tribal government shall 
     be treated as a qualified energy conservation bond only if 
     issued as part of an issue the available project proceeds of 
     which are used for purposes for which such Indian tribal 
     government could issue bonds to which section 103(a) 
     applies.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as amended by this 
     Act, is amended to read as follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a qualified forestry conservation bond,
       ``(B) a new clean renewable energy bond, or
       ``(C) a qualified energy conservation bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), (5), and (6).''.
       (2) Subparagraph (C) of section 54A(d)(2), as amended by 
     this Act, is amended to read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a qualified forestry conservation 
     bond, a purpose specified in section 54B(e),
       ``(ii) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54C(a)(1), and
       ``(iii) in the case of a qualified energy conservation 
     bond, a purpose specified in section 54D(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding at the end the following new item:

``Sec. 54D. Qualified energy conservation bonds.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

       (a) Extension of Credit.--Section 25C(g) is amended by 
     striking ``placed in service after December 31, 2007'' and 
     inserting ``placed in service--
       ``(1) after December 31, 2007, and before January 1, 2009, 
     or
       ``(2) after December 31, 2009.''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) is amended by adding at 
     the end the following new paragraph:
       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Modification of Water Heater Requirements.--Section 
     25C(d)(3)(E) is amended by inserting ``or a thermal 
     efficiency of at least 90 percent'' after ``0.80''.
       (d) Coordination With Credit for Qualified Geothermal Heat 
     pump Property Expenditures.--
       (1) In general.--Paragraph (3) of section 25C(d), as 
     amended by subsections (b) and (c), is amended by striking 
     subparagraph (C) and by redesignating subparagraphs (D), (E), 
     and (F) as subparagraphs (C), (D), and (E), respectively.
       (2) Conforming amendment.--Subparagraph (C) of section 
     25C(d)(2) is amended to read as follows:
       ``(C) Requirements and standards for air conditioners and 
     heat pumps.--The standards and requirements prescribed by the 
     Secretary under subparagraph (B) with respect to the energy 
     efficiency ratio (EER) for central air conditioners and 
     electric heat pumps--
       ``(i) shall require measurements to be based on published 
     data which is tested by manufacturers at 95 degrees 
     Fahrenheit, and
       ``(ii) may be based on the certified data of the Air 
     Conditioning and Refrigeration Institute that are prepared in 
     partnership with the Consortium for Energy Efficiency.''.
       (e) Modification of Qualified Energy Efficiency 
     Improvements.--
       (1) In general.--Paragraph (1) of section 25C(c) is amended 
     by inserting ``, or an asphalt roof with appropriate cooling 
     granules,'' before ``which meet the Energy Star program 
     requirements''.
       (2) Building envelope component.--Subparagraph (D) of 
     section 25C(c)(2) is amended--
       (A) by inserting ``or asphalt roof'' after ``metal roof'', 
     and
       (B) by inserting ``or cooling granules'' after ``pigmented 
     coatings''.
       (f) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made this section shall apply to expenditures made 
     after December 31, 2008.
       (2) Modification of qualified energy efficiency 
     improvements.--The amendments made by subsection (e) shall 
     apply to property placed in service after the date of the 
     enactment of this Act.

     SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

       Subsection (h) of section 179D is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2013''.

     SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.

       Subsection (g) of section 45L (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

     SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

       (a) In General.--Subsection (b) of section 45M is amended 
     to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009, or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009, or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'',
       (C) by moving the text of such subsection in line with the 
     subsection heading, and
       (D) by redesignating subparagraphs (A) and (B) as 
     paragraphs (1) and (2), respectively, and by moving such 
     paragraphs 2 ems to the left.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by

[[Page 23687]]

     paragraph (1), is amended by striking ``3-calendar year'' and 
     inserting ``2-calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) is 
     amended to read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) is amended 
     to read as follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2), 
     and
       ``(C) any refrigerator described in subsection (b)(3).''.
       (2) Clothes washer.--Section 45M(f)(3) is amended by 
     inserting ``commercial'' before ``residential'' the second 
     place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M is amended by redesignating paragraphs (4), (5), (6), and 
     (7) as paragraphs (5), (6), (7), and (8), respectively, and 
     by inserting after paragraph (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the top of the 
     machine and which operates on a vertical axis.''.
       (4) Replacement of energy factor.--Section 45M(f)(6), as 
     redesignated by paragraph (3), is amended to read as follows:
       ``(6) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (5) Gallons per cycle; water consumption factor.--Section 
     45M(f), as amended by paragraph (3), is amended by adding at 
     the end the following:
       ``(9) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(10) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF 
                   SMART METERS AND SMART GRID SYSTEMS.

       (a) In General.--Section 168(e)(3)(D) is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting a comma, and 
     by inserting after clause (ii) the following new clauses:
       ``(iii) any qualified smart electric meter, and
       ``(iv) any qualified smart electric grid system.''.
       (b) Definitions.--Section 168(i) is amended by inserting at 
     the end the following new paragraph:
       ``(18) Qualified smart electric meters.--
       ``(A) In general.--The term `qualified smart electric 
     meter' means any smart electric meter which--
       ``(i) is placed in service by a taxpayer who is a supplier 
     of electric energy or a provider of electric energy services, 
     and
       ``(ii) does not have a class life (determined without 
     regard to subsection (e)) of less than 10 years.
       ``(B) Smart electric meter.--For purposes of subparagraph 
     (A), the term `smart electric meter' means any time-based 
     meter and related communication equipment which is capable of 
     being used by the taxpayer as part of a system that--
       ``(i) measures and records electricity usage data on a 
     time-differentiated basis in at least 24 separate time 
     segments per day,
       ``(ii) provides for the exchange of information between 
     supplier or provider and the customer's electric meter in 
     support of time-based rates or other forms of demand 
     response,
       ``(iii) provides data to such supplier or provider so that 
     the supplier or provider can provide energy usage information 
     to customers electronically, and
       ``(iv) provides net metering.
       ``(19) Qualified smart electric grid systems.--
       ``(A) In general.--The term `qualified smart electric grid 
     system' means any smart grid property which--
       ``(i) is used as part of a system for electric distribution 
     grid communications, monitoring, and management placed in 
     service by a taxpayer who is a supplier of electric energy or 
     a provider of electric energy services, and
       ``(ii) does not have a class life (determined without 
     regard to subsection (e)) of less than 10 years.
       ``(B) Smart grid property.--For the purposes of 
     subparagraph (A), the term `smart grid property' means 
     electronics and related equipment that is capable of--
       ``(i) sensing, collecting, and monitoring data of or from 
     all portions of a utility's electric distribution grid,
       ``(ii) providing real-time, two-way communications to 
     monitor or manage such grid, and
       ``(iii) providing real time analysis of and event 
     prediction based upon collected data that can be used to 
     improve electric distribution system reliability, quality, 
     and performance.''.
       (c) Continued Application of 150 Percent Declining Balance 
     Method.--Paragraph (2) of section 168(b) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (D), and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) any property (other than property described in 
     paragraph (3)) which is a qualified smart electric meter or 
     qualified smart electric grid system, or''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN 
                   PROJECTS.

       (a) In General.--Paragraph (8) of section 142(l) is amended 
     by striking ``September 30, 2009'' and inserting ``September 
     30, 2012''.
       (b) Treatment of Current Refunding Bonds.--Paragraph (9) of 
     section 142(l) is amended by striking ``October 1, 2009'' and 
     inserting ``October 1, 2012''.
       (c) Accountability.--The second sentence of section 701(d) 
     of the American Jobs Creation Act of 2004 is amended by 
     striking ``issuance,'' and inserting ``issuance of the last 
     issue with respect to such project,''.

     SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE 
                   AND RECYCLING PROPERTY.

       (a) In General.--Section 168 is amended by adding at the 
     end the following new subsection:
       ``(m) Special Allowance for Certain Reuse and Recycling 
     Property.--
       ``(1) In general.--In the case of any qualified reuse and 
     recycling property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of the qualified reuse and recycling property, 
     and
       ``(B) the adjusted basis of the qualified reuse and 
     recycling property shall be reduced by the amount of such 
     deduction before computing the amount otherwise allowable as 
     a depreciation deduction under this chapter for such taxable 
     year and any subsequent taxable year.
       ``(2) Qualified reuse and recycling property.--For purposes 
     of this subsection--
       ``(A) In general.--The term `qualified reuse and recycling 
     property' means any reuse and recycling property--
       ``(i) to which this section applies,
       ``(ii) which has a useful life of at least 5 years,
       ``(iii) the original use of which commences with the 
     taxpayer after August 31, 2008, and
       ``(iv) which is--

       ``(I) acquired by purchase (as defined in section 
     179(d)(2)) by the taxpayer after August 31, 2008, but only if 
     no written binding contract for the acquisition was in effect 
     before September 1, 2008, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after August 31, 
     2008.

       ``(B) Exceptions.--
       ``(i) Bonus depreciation property under subsection (k).--
     The term `qualified reuse and recycling property' shall not 
     include any property to which section 168(k) applies.
       ``(ii) Alternative depreciation property.--The term 
     `qualified reuse and recycling property' shall not include 
     any property to which the alternative depreciation system 
     under subsection (g) applies, determined without regard to 
     paragraph (7) of subsection (g) (relating to election to have 
     system apply).
       ``(iii) Election out.--If a taxpayer makes an election 
     under this clause with respect to any class of property for 
     any taxable year, this subsection shall not apply to all 
     property in such class placed in service during such taxable 
     year.

[[Page 23688]]

       ``(C) Special rule for self-constructed property.--In the 
     case of a taxpayer manufacturing, constructing, or producing 
     property for the taxpayer's own use, the requirements of 
     clause (iv) of subparagraph (A) shall be treated as met if 
     the taxpayer begins manufacturing, constructing, or producing 
     the property after August 31, 2008.
       ``(D) Deduction allowed in computing minimum tax.--For 
     purposes of determining alternative minimum taxable income 
     under section 55, the deduction under subsection (a) for 
     qualified reuse and recycling property shall be determined 
     under this section without regard to any adjustment under 
     section 56.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Reuse and recycling property.--
       ``(i) In general.--The term `reuse and recycling property' 
     means any machinery and equipment (not including buildings or 
     real estate), along with all appurtenances thereto, including 
     software necessary to operate such equipment, which is used 
     exclusively to collect, distribute, or recycle qualified 
     reuse and recyclable materials.
       ``(ii) Exclusion.--Such term does not include rolling stock 
     or other equipment used to transport reuse and recyclable 
     materials.
       ``(B) Qualified reuse and recyclable materials.--
       ``(i) In general.--The term `qualified reuse and recyclable 
     materials' means scrap plastic, scrap glass, scrap textiles, 
     scrap rubber, scrap packaging, recovered fiber, scrap ferrous 
     and nonferrous metals, or electronic scrap generated by an 
     individual or business.
       ``(ii) Electronic scrap.--For purposes of clause (i), the 
     term `electronic scrap' means--

       ``(I) any cathode ray tube, flat panel screen, or similar 
     video display device with a screen size greater than 4 inches 
     measured diagonally, or
       ``(II) any central processing unit.

       ``(C) Recycling or recycle.--The term `recycling' or 
     `recycle' means that process (including sorting) by which 
     worn or superfluous materials are manufactured or processed 
     into specification grade commodities that are suitable for 
     use as a replacement or substitute for virgin materials in 
     manufacturing tangible consumer and commercial products, 
     including packaging.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after August 31, 
     2008.

                      TITLE IV--REVENUE PROVISIONS

     SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO 
                   DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY 
                   PRODUCTS THEREOF.

       (a) In General.--Section 199(d) is amended by redesignating 
     paragraph (9) as paragraph (10) and by inserting after 
     paragraph (8) the following new paragraph:
       ``(9) Special rule for taxpayers with oil related qualified 
     production activities income.--
       ``(A) In general.--If a taxpayer has oil related qualified 
     production activities income for any taxable year beginning 
     after 2009, the amount otherwise allowable as a deduction 
     under subsection (a) shall be reduced by 3 percent of the 
     least of--
       ``(i) the oil related qualified production activities 
     income of the taxpayer for the taxable year,
       ``(ii) the qualified production activities income of the 
     taxpayer for the taxable year, or
       ``(iii) taxable income (determined without regard to this 
     section).
       ``(B) Oil related qualified production activities income.--
     For purposes of this paragraph, the term `oil related 
     qualified production activities income' means for any taxable 
     year the qualified production activities income which is 
     attributable to the production, refining, processing, 
     transportation, or distribution of oil, gas, or any primary 
     product thereof during such taxable year.
       ``(C) Primary product.--For purposes of this paragraph, the 
     term `primary product' has the same meaning as when used in 
     section 927(a)(2)(C), as in effect before its repeal.''.
       (b) Conforming Amendment.--Section 199(d)(2) (relating to 
     application to individuals) is amended by striking 
     ``subsection (a)(1)(B)'' and inserting ``subsections 
     (a)(1)(B) and (d)(9)(A)(iii)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN 
                   OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL 
                   RELATED INCOME FOR PURPOSES OF THE FOREIGN TAX 
                   CREDIT.

       (a) In General.--Subsections (a) and (b) of section 907 
     (relating to special rules in case of foreign oil and gas 
     income) are amended to read as follows:
       ``(a) Reduction in Amount Allowed as Foreign Tax Under 
     Section 901.--In applying section 901, the amount of any 
     foreign oil and gas taxes paid or accrued (or deemed to have 
     been paid) during the taxable year which would (but for this 
     subsection) be taken into account for purposes of section 901 
     shall be reduced by the amount (if any) by which the amount 
     of such taxes exceeds the product of--
       ``(1) the amount of the combined foreign oil and gas income 
     for the taxable year,
       ``(2) multiplied by--
       ``(A) in the case of a corporation, the percentage which is 
     equal to the highest rate of tax specified under section 
     11(b), or
       ``(B) in the case of an individual, a fraction the 
     numerator of which is the tax against which the credit under 
     section 901(a) is taken and the denominator of which is the 
     taxpayer's entire taxable income.
       ``(b) Combined Foreign Oil and Gas Income; Foreign Oil and 
     Gas Taxes.--For purposes of this section--
       ``(1) Combined foreign oil and gas income.--The term 
     `combined foreign oil and gas income' means, with respect to 
     any taxable year, the sum of--
       ``(A) foreign oil and gas extraction income, and
       ``(B) foreign oil related income.
       ``(2) Foreign oil and gas taxes.--The term `foreign oil and 
     gas taxes' means, with respect to any taxable year, the sum 
     of--
       ``(A) oil and gas extraction taxes, and
       ``(B) any income, war profits, and excess profits taxes 
     paid or accrued (or deemed to have been paid or accrued under 
     section 902 or 960) during the taxable year with respect to 
     foreign oil related income (determined without regard to 
     subsection (c)(4)) or loss which would be taken into account 
     for purposes of section 901 without regard to this 
     section.''.
       (b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4) 
     of section 907(c) (relating to recapture of foreign oil and 
     gas extraction losses by recharacterizing later extraction 
     income) is amended to read as follows:
       ``(4) Recapture of foreign oil and gas losses by 
     recharacterizing later combined foreign oil and gas income.--
       ``(A) In general.--The combined foreign oil and gas income 
     of a taxpayer for a taxable year (determined without regard 
     to this paragraph) shall be reduced--
       ``(i) first by the amount determined under subparagraph 
     (B), and
       ``(ii) then by the amount determined under subparagraph 
     (C).
     The aggregate amount of such reductions shall be treated as 
     income (from sources without the United States) which is not 
     combined foreign oil and gas income.
       ``(B) Reduction for pre-2009 foreign oil extraction 
     losses.--The reduction under this paragraph shall be equal to 
     the lesser of--
       ``(i) the foreign oil and gas extraction income of the 
     taxpayer for the taxable year (determined without regard to 
     this paragraph), or
       ``(ii) the excess of--

       ``(I) the aggregate amount of foreign oil extraction losses 
     for preceding taxable years beginning after December 31, 
     1982, and before January 1, 2009, over
       ``(II) so much of such aggregate amount as was 
     recharacterized under this paragraph (as in effect before and 
     after the date of the enactment of the Energy Improvement and 
     Extension Act of 2008) for preceding taxable years beginning 
     after December 31, 1982.

       ``(C) Reduction for post-2008 foreign oil and gas losses.--
     The reduction under this paragraph shall be equal to the 
     lesser of--
       ``(i) the combined foreign oil and gas income of the 
     taxpayer for the taxable year (determined without regard to 
     this paragraph), reduced by an amount equal to the reduction 
     under subparagraph (A) for the taxable year, or
       ``(ii) the excess of--

       ``(I) the aggregate amount of foreign oil and gas losses 
     for preceding taxable years beginning after December 31, 
     2008, over
       ``(II) so much of such aggregate amount as was 
     recharacterized under this paragraph for preceding taxable 
     years beginning after December 31, 2008.

       ``(D) Foreign oil and gas loss defined.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `foreign oil and gas loss' means the amount by which--

       ``(I) the gross income for the taxable year from sources 
     without the United States and its possessions (whether or not 
     the taxpayer chooses the benefits of this subpart for such 
     taxable year) taken into account in determining the combined 
     foreign oil and gas income for such year, is exceeded by
       ``(II) the sum of the deductions properly apportioned or 
     allocated thereto.

       ``(ii) Net operating loss deduction not taken into 
     account.--For purposes of clause (i), the net operating loss 
     deduction allowable for the taxable year under section 172(a) 
     shall not be taken into account.
       ``(iii) Expropriation and casualty losses not taken into 
     account.--For purposes of clause (i), there shall not be 
     taken into account--

       ``(I) any foreign expropriation loss (as defined in section 
     172(h) (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990)) for the 
     taxable year, or
       ``(II) any loss for the taxable year which arises from 
     fire, storm, shipwreck, or other casualty, or from theft,

     to the extent such loss is not compensated for by insurance 
     or otherwise.
       ``(iv) Foreign oil extraction loss.--For purposes of 
     subparagraph (B)(ii)(I), foreign oil extraction losses shall 
     be determined under this paragraph as in effect on the day 
     before the date of the enactment of the Energy Improvement 
     and Extension Act of 2008.''.

[[Page 23689]]

       (c) Carryback and Carryover of Disallowed Credits.--Section 
     907(f) (relating to carryback and carryover of disallowed 
     credits) is amended--
       (1) by striking ``oil and gas extraction taxes'' each place 
     it appears and inserting ``foreign oil and gas taxes'', and
       (2) by adding at the end the following new paragraph:
       ``(4) Transition rules for pre-2009 and 2009 disallowed 
     credits.--
       ``(A) Pre-2009 credits.--In the case of any unused credit 
     year beginning before January 1, 2009, this subsection shall 
     be applied to any unused oil and gas extraction taxes carried 
     from such unused credit year to a year beginning after 
     December 31, 2008--
       ``(i) by substituting `oil and gas extraction taxes' for 
     `foreign oil and gas taxes' each place it appears in 
     paragraphs (1), (2), and (3), and
       ``(ii) by computing, for purposes of paragraph (2)(A), the 
     limitation under subparagraph (A) for the year to which such 
     taxes are carried by substituting `foreign oil and gas 
     extraction income' for `foreign oil and gas income' in 
     subsection (a).
       ``(B) 2009 credits.--In the case of any unused credit year 
     beginning in 2009, the amendments made to this subsection by 
     the Energy Improvement and Extension Act of 2008 shall be 
     treated as being in effect for any preceding year beginning 
     before January 1, 2009, solely for purposes of determining 
     how much of the unused foreign oil and gas taxes for such 
     unused credit year may be deemed paid or accrued in such 
     preceding year.''.
       (d) Conforming Amendment.--Section 6501(i) is amended by 
     striking ``oil and gas extraction taxes'' and inserting 
     ``foreign oil and gas taxes''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 403. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES 
                   TRANSACTIONS.

       (a) In General.--
       (1) Broker reporting for securities transactions.--Section 
     6045 is amended by adding at the end the following new 
     subsection:
       ``(g) Additional Information Required in the Case of 
     Securities Transactions, etc.--
       ``(1) In general.--If a broker is otherwise required to 
     make a return under subsection (a) with respect to the gross 
     proceeds of the sale of a covered security, the broker shall 
     include in such return the information described in paragraph 
     (2).
       ``(2) Additional information required.--
       ``(A) In general.--The information required under paragraph 
     (1) to be shown on a return with respect to a covered 
     security of a customer shall include the customer's adjusted 
     basis in such security and whether any gain or loss with 
     respect to such security is long-term or short-term (within 
     the meaning of section 1222).
       ``(B) Determination of adjusted basis.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--The customer's adjusted basis shall be 
     determined--

       ``(I) in the case of any security (other than any stock for 
     which an average basis method is permissible under section 
     1012), in accordance with the first-in first-out method 
     unless the customer notifies the broker by means of making an 
     adequate identification of the stock sold or transferred, and
       ``(II) in the case of any stock for which an average basis 
     method is permissible under section 1012, in accordance with 
     the broker's default method unless the customer notifies the 
     broker that he elects another acceptable method under section 
     1012 with respect to the account in which such stock is held.

       ``(ii) Exception for wash sales.--Except as otherwise 
     provided by the Secretary, the customer's adjusted basis 
     shall be determined without regard to section 1091 (relating 
     to loss from wash sales of stock or securities) unless the 
     transactions occur in the same account with respect to 
     identical securities.
       ``(3) Covered security.--For purposes of this subsection--
       ``(A) In general.--The term `covered security' means any 
     specified security acquired on or after the applicable date 
     if such security--
       ``(i) was acquired through a transaction in the account in 
     which such security is held, or
       ``(ii) was transferred to such account from an account in 
     which such security was a covered security, but only if the 
     broker received a statement under section 6045A with respect 
     to the transfer.
       ``(B) Specified security.--The term `specified security' 
     means--
       ``(i) any share of stock in a corporation,
       ``(ii) any note, bond, debenture, or other evidence of 
     indebtedness,
       ``(iii) any commodity, or contract or derivative with 
     respect to such commodity, if the Secretary determines that 
     adjusted basis reporting is appropriate for purposes of this 
     subsection, and
       ``(iv) any other financial instrument with respect to which 
     the Secretary determines that adjusted basis reporting is 
     appropriate for purposes of this subsection.
       ``(C) Applicable date.--The term `applicable date' means--
       ``(i) January 1, 2011, in the case of any specified 
     security which is stock in a corporation (other than any 
     stock described in clause (ii)),
       ``(ii) January 1, 2012, in the case of any stock for which 
     an average basis method is permissible under section 1012, 
     and
       ``(iii) January 1, 2013, or such later date determined by 
     the Secretary in the case of any other specified security.
       ``(4) Treatment of s corporations.--In the case of the sale 
     of a covered security acquired by an S corporation (other 
     than a financial institution) after December 31, 2011, such S 
     corporation shall be treated in the same manner as a 
     partnership for purposes of this section.
       ``(5) Special rules for short sales.--In the case of a 
     short sale, reporting under this section shall be made for 
     the year in which such sale is closed.''.
       (2) Broker information required with respect to options.--
     Section 6045, as amended by subsection (a), is amended by 
     adding at the end the following new subsection:
       ``(h) Application to Options on Securities.--
       ``(1) Exercise of option.--For purposes of this section, if 
     a covered security is acquired or disposed of pursuant to the 
     exercise of an option that was granted or acquired in the 
     same account as the covered security, the amount received 
     with respect to the grant or paid with respect to the 
     acquisition of such option shall be treated as an adjustment 
     to gross proceeds or as an adjustment to basis, as the case 
     may be.
       ``(2) Lapse or closing transaction.--In the case of the 
     lapse (or closing transaction (as defined in section 
     1234(b)(2)(A))) of an option on a specified security or the 
     exercise of a cash-settled option on a specified security, 
     reporting under subsections (a) and (g) with respect to such 
     option shall be made for the calendar year which includes the 
     date of such lapse, closing transaction, or exercise.
       ``(3) Prospective application.--Paragraphs (1) and (2) 
     shall not apply to any option which is granted or acquired 
     before January 1, 2013.
       ``(4) Definitions.--For purposes of this subsection, the 
     terms `covered security' and `specified security' shall have 
     the meanings given such terms in subsection (g)(3).''.
       (3) Extension of period for statements sent to customers.--
       (A) In general.--Subsection (b) of section 6045 is amended 
     by striking ``January 31'' and inserting ``February 15''.
       (B) Statements related to substitute payments.--Subsection 
     (d) of section 6045 is amended--
       (i) by striking ``at such time and'', and
       (ii) by inserting after ``other item.'' the following new 
     sentence: ``The written statement required under the 
     preceding sentence shall be furnished on or before February 
     15 of the year following the calendar year in which the 
     payment was made.''.
       (C) Other statements.--Subsection (b) of section 6045 is 
     amended by adding at the end the following: ``In the case of 
     a consolidated reporting statement (as defined in 
     regulations) with respect to any customer, any statement 
     which would otherwise be required to be furnished on or 
     before January 31 of a calendar year with respect to any item 
     reportable to the taxpayer shall instead be required to be 
     furnished on or before February 15 of such calendar year if 
     furnished with such consolidated reporting statement.''.
       (b) Determination of Basis of Certain Securities on Account 
     by Account or Average Basis Method.--Section 1012 is 
     amended--
       (1) by striking ``The basis of property'' and inserting the 
     following:
       ``(a) In General.--The basis of property'',
       (2) by striking ``The cost of real property'' and inserting 
     the following:
       ``(b) Special Rule for Apportioned Real Estate Taxes.--The 
     cost of real property'', and
       (3) by adding at the end the following new subsections:
       ``(c) Determinations by Account.--
       ``(1) In general.--In the case of the sale, exchange, or 
     other disposition of a specified security on or after the 
     applicable date, the conventions prescribed by regulations 
     under this section shall be applied on an account by account 
     basis.
       ``(2) Application to certain funds.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any stock for which an average basis method is permissible 
     under section 1012 which is acquired before January 1, 2012, 
     shall be treated as a separate account from any such stock 
     acquired on or after such date.
       ``(B) Election fund for treatment as single account.--If a 
     fund described in subparagraph (A) elects to have this 
     subparagraph apply with respect to one or more of its 
     stockholders--
       ``(i) subparagraph (A) shall not apply with respect to any 
     stock in such fund held by such stockholders, and
       ``(ii) all stock in such fund which is held by such 
     stockholders shall be treated as covered securities described 
     in section 6045(g)(3) without regard to the date of the 
     acquisition of such stock.


[[Page 23690]]


     A rule similar to the rule of the preceding sentence shall 
     apply with respect to a broker holding such stock as a 
     nominee.
       ``(3) Definitions.--For purposes of this section, the terms 
     `specified security' and `applicable date' shall have the 
     meaning given such terms in section 6045(g).
       ``(d) Average Basis for Stock Acquired Pursuant to a 
     Dividend Reinvestment Plan.--
       ``(1) In general.--In the case of any stock acquired after 
     December 31, 2010, in connection with a dividend reinvestment 
     plan, the basis of such stock while held as part of such plan 
     shall be determined using one of the methods which may be 
     used for determining the basis of stock in an open-end fund.
       ``(2) Treatment after transfer.--In the case of the 
     transfer to another account of stock to which paragraph (1) 
     applies, such stock shall have a cost basis in such other 
     account equal to its basis in the dividend reinvestment plan 
     immediately before such transfer (properly adjusted for any 
     fees or other charges taken into account in connection with 
     such transfer).
       ``(3) Separate accounts; election for treatment as single 
     account.--Rules similar to the rules of subsection (c)(2) 
     shall apply for purposes of this subsection.
       ``(4) Dividend reinvestment plan.--For purposes of this 
     subsection--
       ``(A) In general.--The term `dividend reinvestment plan' 
     means any arrangement under which dividends on any stock are 
     reinvested in stock identical to the stock with respect to 
     which the dividends are paid.
       ``(B) Initial stock acquisition treated as acquired in 
     connection with plan.--Stock shall be treated as acquired in 
     connection with a dividend reinvestment plan if such stock is 
     acquired pursuant to such plan or if the dividends paid on 
     such stock are subject to such plan.''.
       (c) Information by Transferors To Aid Brokers.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6045 the 
     following new section:

     ``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH 
                   TRANSFERS OF COVERED SECURITIES TO BROKERS.

       ``(a) Furnishing of Information.--Every applicable person 
     which transfers to a broker (as defined in section 
     6045(c)(1)) a security which is a covered security (as 
     defined in section 6045(g)(3)) in the hands of such 
     applicable person shall furnish to such broker a written 
     statement in such manner and setting forth such information 
     as the Secretary may by regulations prescribe for purposes of 
     enabling such broker to meet the requirements of section 
     6045(g).
       ``(b) Applicable Person.--For purposes of subsection (a), 
     the term `applicable person' means--
       ``(1) any broker (as defined in section 6045(c)(1)), and
       ``(2) any other person as provided by the Secretary in 
     regulations.
       ``(c) Time for Furnishing Statement.--Except as otherwise 
     provided by the Secretary, any statement required by 
     subsection (a) shall be furnished not later than 15 days 
     after the date of the transfer described in such 
     subsection.''.
       (2) Assessable penalties.--Paragraph (2) of section 
     6724(d), as amended by the Housing Assistance Tax Act of 
     2008, is amended by redesignating subparagraphs (I) through 
     (DD) as subparagraphs (J) through (EE), respectively, and by 
     inserting after subparagraph (H) the following new 
     subparagraph:
       ``(I) section 6045A (relating to information required in 
     connection with transfers of covered securities to 
     brokers),''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6045 the 
     following new item:

``Sec. 6045A. Information required in connection with transfers of 
              covered securities to brokers.''.

       (d) Additional Issuer Information To Aid Brokers.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61, as amended by subsection (b), is amended by 
     inserting after section 6045A the following new section:

     ``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF 
                   SPECIFIED SECURITIES.

       ``(a) In General.--According to the forms or regulations 
     prescribed by the Secretary, any issuer of a specified 
     security shall make a return setting forth--
       ``(1) a description of any organizational action which 
     affects the basis of such specified security of such issuer,
       ``(2) the quantitative effect on the basis of such 
     specified security resulting from such action, and
       ``(3) such other information as the Secretary may 
     prescribe.
       ``(b) Time for Filing Return.--Any return required by 
     subsection (a) shall be filed not later than the earlier of--
       ``(1) 45 days after the date of the action described in 
     subsection (a), or
       ``(2) January 15 of the year following the calendar year 
     during which such action occurred.
       ``(c) Statements To Be Furnished to Holders of Specified 
     Securities or Their Nominees.--According to the forms or 
     regulations prescribed by the Secretary, every person 
     required to make a return under subsection (a) with respect 
     to a specified security shall furnish to the nominee with 
     respect to the specified security (or certificate holder if 
     there is no nominee) a written statement showing--
       ``(1) the name, address, and phone number of the 
     information contact of the person required to make such 
     return,
       ``(2) the information required to be shown on such return 
     with respect to such security, and
       ``(3) such other information as the Secretary may 
     prescribe.

     The written statement required under the preceding sentence 
     shall be furnished to the holder on or before January 15 of 
     the year following the calendar year during which the action 
     described in subsection (a) occurred.
       ``(d) Specified Security.--For purposes of this section, 
     the term `specified security' has the meaning given such term 
     by section 6045(g)(3)(B). No return shall be required under 
     this section with respect to actions described in subsection 
     (a) with respect to a specified security which occur before 
     the applicable date (as defined in section 6045(g)(3)(C)) 
     with respect to such security.
       ``(e) Public Reporting in Lieu of Return.--The Secretary 
     may waive the requirements under subsections (a) and (c) with 
     respect to a specified security, if the person required to 
     make the return under subsection (a) makes publicly 
     available, in such form and manner as the Secretary 
     determines necessary to carry out the purposes of this 
     section--
       ``(1) the name, address, phone number, and email address of 
     the information contact of such person, and
       ``(2) the information described in paragraphs (1), (2), and 
     (3) of subsection (a).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1), as amended by 
     the Housing Assistance Tax Act of 2008, is amended by 
     redesignating clause (iv) and each of the clauses which 
     follow as clauses (v) through (xxiii), respectively, and by 
     inserting after clause (iii) the following new clause:
       ``(iv) section 6045B(a) (relating to returns relating to 
     actions affecting basis of specified securities),''.
       (B) Paragraph (2) of section 6724(d), as amended by the 
     Housing Assistance Tax Act of 2008 and by subsection (c)(2), 
     is amended by redesignating subparagraphs (J) through (EE) as 
     subparagraphs (K) through (FF), respectively, and by 
     inserting after subparagraph (I) the following new 
     subparagraph:
       ``(J) subsections (c) and (e) of section 6045B (relating to 
     returns relating to actions affecting basis of specified 
     securities),''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61, as amended by 
     subsection (b)(3), is amended by inserting after the item 
     relating to section 6045A the following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified 
              securities.''.

       (e) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on January 1, 2011.
       (2) Extension of period for statements sent to customers.--
     The amendments made by subsection (a)(3) shall apply to 
     statements required to be furnished after December 31, 2008.

     SEC. 404. 0.2 PERCENT FUTA SURTAX.

       (a) In General.--Section 3301 (relating to rate of tax) is 
     amended--
       (1) by striking ``through 2008'' in paragraph (1) and 
     inserting ``through 2009'', and
       (2) by striking ``calendar year 2009'' in paragraph (2) and 
     inserting ``calendar year 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to wages paid after December 31, 2008.

     SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST 
                   FUND TAX.

       (a) Increase in Rate.--
       (1) In general.--Section 4611(c)(2)(B) (relating to rates) 
     is amended by striking ``is 5 cents a barrel.'' and inserting 
     ``is--
       ``(i) in the case of crude oil received or petroleum 
     products entered before January 1, 2017, 8 cents a barrel, 
     and
       ``(ii) in the case of crude oil received or petroleum 
     products entered after December 31, 2016, 9 cents a 
     barrel.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply on and after the first day of the first calendar 
     quarter beginning more than 60 days after the date of the 
     enactment of this Act.
       (b) Extension.--
       (1) In general.--Section 4611(f) (relating to application 
     of Oil Spill Liability Trust Fund financing rate) is amended 
     by striking paragraphs (2) and (3) and inserting the 
     following new paragraph:
       ``(2) Termination.--The Oil Spill Liability Trust Fund 
     financing rate shall not apply after December 31, 2017.''.
       (2) Conforming amendment.--Section 4611(f)(1) is amended by 
     striking ``paragraphs (2) and (3)'' and inserting ``paragraph 
     (2)''.

[[Page 23691]]

       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.

      DIVISION C--TAX EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This division may be cited as the ``Tax 
     Extenders and Alternative Minimum Tax Relief Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this division 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 of this 
     division is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

                TITLE I--ALTERNATIVE MINIMUM TAX RELIEF

Sec. 101. Extension of alternative minimum tax relief for nonrefundable 
              personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption 
              amount.
Sec. 103. Increase of AMT refundable credit amount for individuals with 
              long-term unused credits for prior year minimum tax 
              liability, etc.

            TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS

Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Deduction for certain expenses of elementary and secondary 
              school teachers.
Sec. 204. Additional standard deduction for real property taxes for 
              nonitemizers.
Sec. 205. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 206. Treatment of certain dividends of regulated investment 
              companies.
Sec. 207. Stock in RIC for purposes of determining estates of 
              nonresidents not citizens.
Sec. 208. Qualified investment entities.

            TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS

Sec. 301. Extension and modification of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign 
              corporations.
Sec. 305. Extension of 15-year straight-line cost recovery for 
              qualified leasehold improvements and qualified restaurant 
              improvements; 15-year straight-line cost recovery for 
              certain improvements to retail space.
Sec. 306. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 307. Basis adjustment to stock of S corporations making charitable 
              contributions of property.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto 
              Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 310. Extension of mine rescue team training credit.
Sec. 311. Extension of election to expense advanced mine safety 
              equipment.
Sec. 312. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 313. Qualified zone academy bonds.
Sec. 314. Indian employment credit.
Sec. 315. Accelerated depreciation for business property on Indian 
              reservations.
Sec. 316. Railroad track maintenance.
Sec. 317. Seven-year cost recovery period for motorsports racing track 
              facility.
Sec. 318. Expensing of environmental remediation costs.
Sec. 319. Extension of work opportunity tax credit for Hurricane 
              Katrina employees.
Sec. 320. Extension of increased rehabilitation credit for structures 
              in the Gulf Opportunity Zone.
Sec. 321. Enhanced deduction for qualified computer contributions.
Sec. 322. Tax incentives for investment in the District of Columbia.
Sec. 323. Enhanced charitable deductions for contributions of food 
              inventory.
Sec. 324. Extension of enhanced charitable deduction for contributions 
              of book inventory.
Sec. 325. Extension and modification of duty suspension on wool 
              products; wool research fund; wool duty refunds.

          TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS

Sec. 401. Permanent authority for undercover operations.
Sec. 402. Permanent authority for disclosure of information relating to 
              terrorist activities.

        TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS

                     Subtitle A--General Provisions

Sec. 501. $8,500 income threshold used to calculate refundable portion 
              of child tax credit.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed 
              for use by children.
Sec. 504. Income averaging for amounts received in connection with the 
              Exxon Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as 
              5-year property.
Sec. 506. Modification of penalty on understatement of taxpayer's 
              liability by tax return preparer.

 Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and 
                      Addiction Equity Act of 2008

Sec. 511. Short title.
Sec. 512. Mental health parity.

                       TITLE VI--OTHER PROVISIONS

Sec. 601. Secure rural schools and community self-determination 
              program.
Sec. 602. Transfer to abandoned mine reclamation fund.

                       TITLE VII--DISASTER RELIEF

        Subtitle A--Heartland and Hurricane Ike Disaster Relief

Sec. 701. Short title.
Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern 
              severe storms, tornados, and flooding.
Sec. 703. Reporting requirements relating to disaster relief 
              contributions.
Sec. 704. Temporary tax-exempt bond financing and low-income housing 
              tax relief for areas damaged by Hurricane Ike.

                  Subtitle B--National Disaster Relief

Sec. 706. Losses attributable to federally declared disasters.
Sec. 707. Expensing of Qualified Disaster Expenses.
Sec. 708. Net operating losses attributable to federally declared 
              disasters.
Sec. 709. Waiver of certain mortgage revenue bond requirements 
              following federally declared disasters.
Sec. 710. Special depreciation allowance for qualified disaster 
              property.
Sec. 711. Increased expensing for qualified disaster assistance 
              property.
Sec. 712. Coordination with Heartland disaster relief.

TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW 
                           TAX RELIEF POLICY

Sec. 801. Nonqualified deferred compensation from certain tax 
              indifferent parties.

                TITLE I--ALTERNATIVE MINIMUM TAX RELIEF

     SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR 
                   NONREFUNDABLE PERSONAL CREDITS.

       (a) In General.--Paragraph (2) of section 26(a) (relating 
     to special rule for taxable years 2000 through 2007) is 
     amended--
       (1) by striking ``or 2007'' and inserting ``2007, or 
     2008'', and
       (2) by striking ``2007'' in the heading thereof and 
     inserting ``2008''.
       (b)  Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX 
                   EXEMPTION AMOUNT.

       (a) In General.--Paragraph (1) of section 55(d) (relating 
     to exemption amount) is amended--
       (1) by striking ``($66,250 in the case of taxable years 
     beginning in 2007)'' in subparagraph (A) and inserting 
     ``($69,950 in the case of taxable years beginning in 2008)'', 
     and
       (2) by striking ``($44,350 in the case of taxable years 
     beginning in 2007)'' in subparagraph (B) and inserting 
     ``($46,200 in the case of taxable years beginning in 2008)''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 103. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR 
                   INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR 
                   PRIOR YEAR MINIMUM TAX LIABILITY, ETC.

       (a) In General.--Paragraph (2) of section 53(e) is amended 
     to read as follows:
       ``(2) AMT refundable credit amount.--For purposes of 
     paragraph (1), the term `AMT refundable credit amount' means, 
     with respect to any taxable year, the amount (not in excess 
     of the long-term unused minimum tax credit for such taxable 
     year) equal to the greater of--
       ``(A) 50 percent of the long-term unused minimum tax credit 
     for such taxable year, or
       ``(B) the amount (if any) of the AMT refundable credit 
     amount determined under

[[Page 23692]]

     this paragraph for the taxpayer's preceding taxable year 
     (determined without regard to subsection (f)(2)).''.
       (b) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--Section 53 is amended by adding at the end the 
     following new subsection:
       ``(f) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--
       ``(1) Abatement.--Any underpayment of tax outstanding on 
     the date of the enactment of this subsection which is 
     attributable to the application of section 56(b)(3) for any 
     taxable year ending before January 1, 2008, and any interest 
     or penalty with respect to such underpayment which is 
     outstanding on such date of enactment, is hereby abated. The 
     amount determined under subsection (b)(1) shall not include 
     any tax abated under the preceding sentence.
       ``(2) Increase in credit for certain interest and penalties 
     already paid.--The AMT refundable credit amount, and the 
     minimum tax credit determined under subsection (b), for the 
     taxpayer's first 2 taxable years beginning after December 31, 
     2007, shall each be increased by 50 percent of the aggregate 
     amount of the interest and penalties which were paid by the 
     taxpayer before the date of the enactment of this subsection 
     and which would (but for such payment) have been abated under 
     paragraph (1).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Abatement.--Section 53(f)(1), as added by subsection 
     (b), shall take effect on the date of the enactment of this 
     Act.

            TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS

     SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 203. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) 
     (relating to certain expenses of elementary and secondary 
     school teachers) is amended by striking ``or 2007'' and 
     inserting ``2007, 2008, or 2009''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 204. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Subparagraph (C) of section 63(c)(1), as 
     added by the Housing Assistance Tax Act of 2008, is amended 
     by inserting ``or 2009'' after ``2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 206. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining interest-related dividend) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. 207. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) (relating 
     to stock in a RIC) is amended by striking ``December 31, 
     2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

     SEC. 208. QUALIFIED INVESTMENT ENTITIES.

       (a) In General.--Clause (ii) of section 897(h)(4)(A) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2008.

            TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS

     SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.

       (a) Extension.--
       (1) In general.--Section 41(h) (relating to termination) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009'' in paragraph (1)(B).
       (2) Conforming amendment.--Subparagraph (D) of section 
     45C(b)(1) (relating to special rule) is amended by striking 
     ``after December 31, 2007'' and inserting ``after December 
     31, 2009''.
       (b) Termination of Alternative Incremental Credit.--Section 
     41(h) is amended by redesignating paragraph (2) as paragraph 
     (3), and by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Termination of alternative incremental credit.--No 
     election under subsection (c)(4) shall apply to taxable years 
     beginning after December 31, 2008.''.
       (c) Modification of Alternative Simplified Credit.--
     Paragraph (5)(A) of section 41(c) (relating to election of 
     alternative simplified credit) is amended by striking ``12 
     percent'' and inserting ``14 percent (12 percent in the case 
     of taxable years ending before January 1, 2009)''.
       (d) Technical Correction.--Paragraph (3) of section 41(h) 
     is amended to read as follows:
       ``(2) Computation for taxable year in which credit 
     terminates.--In the case of any taxable year with respect to 
     which this section applies to a number of days which is less 
     than the total number of days in such taxable year--
       ``(A) the amount determined under subsection (c)(1)(B) with 
     respect to such taxable year shall be the amount which bears 
     the same ratio to such amount (determined without regard to 
     this paragraph) as the number of days in such taxable year to 
     which this section applies bears to the total number of days 
     in such taxable year, and
       ``(B) for purposes of subsection (c)(5), the average 
     qualified research expenses for the preceding 3 taxable years 
     shall be the amount which bears the same ratio to such 
     average qualified research expenses (determined without 
     regard to this paragraph) as the number of days in such 
     taxable year to which this section applies bears to the total 
     number of days in such taxable year.''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Extension.--The amendments made by subsection (a) shall 
     apply to amounts paid or incurred after December 31, 2007.

     SEC. 302. NEW MARKETS TAX CREDIT.

       Subparagraph (D) of section 45D(f)(1) (relating to national 
     limitation on amount of investments designated) is amended by 
     striking ``and 2008'' and inserting ``2008, and 2009''.

     SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Paragraph (10) of section 
     953(e) (relating to application) is amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2010'', and
       (2) by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Exception to Treatment as Foreign Personal Holding 
     Company Income.--Paragraph (9) of section 954(h) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

     SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED 
                   FOREIGN CORPORATIONS.

       (a) In General.--Subparagraph (C) of section 954(c)(6) 
     (relating to application) is amended by striking ``January 1, 
     2009'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2007, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY 
                   FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND 
                   QUALIFIED RESTAURANT IMPROVEMENTS; 15-YEAR 
                   STRAIGHT-LINE COST RECOVERY FOR CERTAIN 
                   IMPROVEMENTS TO RETAIL SPACE.

       (a) Extension of Leasehold and Restaurant Improvements.--
       (1) In general.--Clauses (iv) and (v) of section 
     168(e)(3)(E) (relating to 15-year property) are each amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2010''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (b) Treatment to Include New Construction.--
       (1) In general.--Paragraph (7) of section 168(e) (relating 
     to classification of property) is amended to read as follows:
       ``(7) Qualified restaurant property.--

[[Page 23693]]

       ``(A) In general.--The term `qualified restaurant property' 
     means any section 1250 property which is--
       ``(i) a building, if such building is placed in service 
     after December 31, 2008, and before January 1, 2010, or
       ``(ii) 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.
       ``(B) Exclusion from bonus depreciation.--Property 
     described in this paragraph shall not be considered qualified 
     property for purposes of subsection (k).''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2008.
       (c) Recovery Period for Depreciation of Certain 
     Improvements to Retail Space.--
       (1) 15-year recovery period.--Section 168(e)(3)(E) 
     (relating to 15-year property) is amended by striking ``and'' 
     at the end of clause (vii), by striking the period at the end 
     of clause (viii) and inserting ``, and'', and by adding at 
     the end the following new clause:
       ``(ix) any qualified retail improvement property placed in 
     service after December 31, 2008, and before January 1, 
     2010.''.
       (2) Qualified retail improvement property.--Section 168(e) 
     is amended by adding at the end the following new paragraph:
       ``(8) Qualified retail improvement property.--
       ``(A) In general.--The term `qualified retail improvement 
     property' means any improvement to an interior portion of a 
     building which is nonresidential real property if--
       ``(i) such portion is open to the general public and is 
     used in the retail trade or business of selling tangible 
     personal property to the general public, and
       ``(ii) such improvement is placed in service more than 3 
     years after the date the building was first placed in 
     service.
       ``(B) Improvements made by owner.--In the case of an 
     improvement made by the owner of such improvement, such 
     improvement shall be qualified retail improvement property 
     (if at all) only so long as such improvement is held by such 
     owner. Rules similar to the rules under paragraph (6)(B) 
     shall apply for purposes of the preceding sentence.
       ``(C) Certain improvements not included.--Such term shall 
     not include any improvement for which the expenditure is 
     attributable to--
       ``(i) the enlargement of the building,
       ``(ii) any elevator or escalator,
       ``(iii) any structural component benefitting a common area, 
     or
       ``(iv) the internal structural framework of the building.
       ``(D) Exclusion from bonus depreciation.--Property 
     described in this paragraph shall not be considered qualified 
     property for purposes of subsection (k).
       ``(E) Termination.--Such term shall not include any 
     improvement placed in service after December 31, 2009.''.
       (3) Requirement to use straight line method.--Section 
     168(b)(3) is amended by adding at the end the following new 
     subparagraph:
       ``(I) Qualified retail improvement property described in 
     subsection (e)(8).''.
       (4) Alternative system.--The table contained in section 
     168(g)(3)(B) is amended by inserting after the item relating 
     to subparagraph (E)(viii) the following new item:

    ``(E)(ix).....................................................39''.
       (5) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2008.

     SEC. 306. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. 307. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) 
     (relating to decreases in basis) is amended by striking 
     ``December 31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after December 31, 2007.

     SEC. 309. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR 
                   AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 4 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 310. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.

       Section 45N(e) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. 311. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE 
                   SAFETY EQUIPMENT.

       Section 179E(g) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. 312. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) 
     (relating to termination) is amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 4 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 313. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

     ``SEC. 54E. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bonds.--For purposes of this 
     subchapter, the term `qualified zone academy bond' means any 
     bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for a qualified purpose with respect to 
     a qualified zone academy established by an eligible local 
     education agency,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located, and
       ``(3) the issuer--
       ``(A) designates such bond for purposes of this section,
       ``(B) certifies that it has written assurances that the 
     private business contribution requirement of subsection (b) 
     will be met with respect to such academy, and
       ``(C) certifies that it has the written approval of the 
     eligible local education agency for such bond issuance.
       ``(b)  Private Business Contribution Requirement.--For 
     purposes of subsection (a), the private business contribution 
     requirement of this subsection is met with respect to any 
     issue if the eligible local education agency that established 
     the qualified zone academy has written commitments from 
     private entities to make qualified contributions having a 
     present value (as of the date of issuance of the issue) of 
     not less than 10 percent of the proceeds of the issue.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national zone 
     academy bond limitation for each calendar year. Such 
     limitation is $400,000,000 for 2008 and 2009, and, except as 
     provided in paragraph (4), zero thereafter.
       ``(2) Allocation of limitation.--The national zone academy 
     bond limitation for a calendar year shall be allocated by the 
     Secretary among the States on the basis of their respective 
     populations of individuals below the poverty line (as defined 
     by the Office of Management and Budget). The limitation 
     amount allocated to a State under the preceding sentence 
     shall be allocated by the State education agency to qualified 
     zone academies within such State.
       ``(3) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     paragraph (2) for such calendar year.
       ``(4) Carryover of unused limitation.--
       ``(A) In general.--If for any calendar year--
       ``(i) the limitation amount for any State, exceeds
       ``(ii) the amount of bonds issued during such year which 
     are designated under subsection (a) with respect to qualified 
     zone academies within such State,
     the limitation amount for such State for the following 
     calendar year shall be increased by the amount of such 
     excess.
       ``(B) Limitation on carryover.--Any carryforward of a 
     limitation amount may be carried only to the first 2 years 
     following the unused limitation year. For purposes of the 
     preceding sentence, a limitation amount shall be treated as 
     used on a first-in first-out basis.
       ``(C) Coordination with section 1397e.--Any carryover 
     determined under section 1397E(e)(4) (relating to carryover 
     of unused limitation) with respect to any State to calendar 
     year 2008 or 2009 shall be treated for purposes of this 
     section as a carryover with respect to such State for such 
     calendar year under subparagraph (A), and the limitation of 
     subparagraph (B) shall apply to such carryover taking into 
     account the calendar years to which such carryover relates.
       ``(d) Definitions.--For purposes of this section--

[[Page 23694]]

       ``(1) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of an eligible local education agency to 
     provide education or training below the postsecondary level 
     if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with business to enhance the academic 
     curriculum, increase graduation and employment rates, and 
     better prepare students for the rigors of college and the 
     increasingly complex workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the eligible 
     local education agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the eligible local education 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(2) Eligible local education agency.--For purposes of 
     this section, the term `eligible local education agency' 
     means any local educational agency as defined in section 9101 
     of the Elementary and Secondary Education Act of 1965.
       ``(3) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) rehabilitating or repairing the public school 
     facility in which the academy is established,
       ``(B) providing equipment for use at such academy,
       ``(C) developing course materials for education to be 
     provided at such academy, and
       ``(D) training teachers and other school personnel in such 
     academy.
       ``(4) Qualified contributions.--The term `qualified 
     contribution' means any contribution (of a type and quality 
     acceptable to the eligible local education agency) of--
       ``(A) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),
       ``(B) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(C) services of employees as volunteer mentors,
       ``(D) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(E) any other property or service specified by the 
     eligible local education agency.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as amended by this 
     Act, is amended by striking ``or'' at the end of subparagraph 
     (B), by inserting ``or'' at the end of subparagraph (C), and 
     by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) a qualified zone academy bond,''.
       (2) Subparagraph (C) of section 54A(d)(2), as amended by 
     this Act, is amended by striking ``and'' at the end of clause 
     (ii), by striking the period at the end of clause (iii) and 
     inserting ``, and'', and by adding at the end the following 
     new clause:
       ``(iv) in the case of a qualified zone academy bond, a 
     purpose specified in section 54E(a)(1).''.
       (3) Section 1397E is amended by adding at the end the 
     following new subsection:
       ``(m) Termination.--This section shall not apply to any 
     obligation issued after the date of the enactment of the Tax 
     Extenders and Alternative Minimum Tax Relief Act of 2008.''.
       (4) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54E. Qualified zone academy bonds.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 314. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATIONS.

       (a) In General.--Paragraph (8) of section 168(j) (relating 
     to termination) is amended by striking ``December 31, 2007'' 
     and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 316. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G (relating to 
     application of section) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2010''.
       (b) Credit Allowed Against Alternative Minimum Tax.--
     Subparagraph (B) of section 38(c)(4), as amended by this Act, 
     is amended--
       (1) by redesignating clauses (v), (vi), and (vii) as 
     clauses (vi), (vii), and (viii), respectively, and
       (2) by inserting after clause (iv) the following new 
     clause:
       ``(v) the credit determined under section 45G,''.
       (c) Effective Dates.--
       (1) The amendment made by subsection (a) shall apply to 
     expenditures paid or incurred during taxable years beginning 
     after December 31, 2007.
       (2) The amendments made by subsection (b) shall apply to 
     credits determined under section 45G of the Internal Revenue 
     Code of 1986 in taxable years beginning after December 31, 
     2007, and to carrybacks of such credits.

     SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 318. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR 
                   HURRICANE KATRINA EMPLOYEES.

       (a) In General.--Paragraph (1) of section 201(b) of the 
     Katrina Emergency Tax Relief Act of 2005 is amended by 
     striking ``2-year'' and inserting ``4-year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals hired after August 27, 2007.

     SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR 
                   STRUCTURES IN THE GULF OPPORTUNITY ZONE.

       (a) In General.--Subsection (h) of section 1400N is amended 
     by striking ``December 31, 2008'' and inserting ``December 
     31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after the date 
     of the enactment of this Act.

     SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER 
                   CONTRIBUTIONS.

       (a) In General.--Subparagraph (G) of section 170(e)(6) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made during taxable years 
     beginning after December 31, 2007.

     SEC. 322. 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 ``2007'' both places it appears and inserting 
     ``2009''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2007.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2007'' and inserting ``2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2007.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2008'' each place it appears and inserting 
     ``2010''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2012'' and inserting ``2014'', and
       (ii) by striking ``2012'' in the heading thereof and 
     inserting ``2014''.
       (B) Section 1400B(g)(2) is amended by striking ``2012'' and 
     inserting ``2014''.
       (C) Section 1400F(d) is amended by striking ``2012'' and 
     inserting ``2014''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2007.
       (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 ``2008'' and inserting ``2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2007.

     SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) Increased Amount of Deduction.--
       (1) In general.--Clause (iv) of section 170(e)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to contributions made after December 31, 2007.

[[Page 23695]]

       (b) Temporary Suspension of Limitations on Charitable 
     Contributions.--
       (1) In general.--Section 170(b) is amended by adding at the 
     end the following new paragraph:
       ``(3) Temporary suspension of limitations on charitable 
     contributions.--In the case of a qualified farmer or rancher 
     (as defined in paragraph (1)(E)(v)), any charitable 
     contribution of food--
       ``(A) to which subsection (e)(3)(C) applies (without regard 
     to clause (ii) thereof), and
       ``(B) which is made during the period beginning on the date 
     of the enactment of this paragraph and before January 1, 
     2009,
     shall be treated for purposes of paragraph (1)(E) or (2)(B), 
     whichever is applicable, as if it were a qualified 
     conservation contribution which is made by a qualified farmer 
     or rancher and which otherwise meets the requirements of such 
     paragraph.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR 
                   CONTRIBUTIONS OF BOOK INVENTORY.

       (a) Extension.--Clause (iv) of section 170(e)(3)(D) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Clerical Amendment.--Clause (iii) of section 
     170(e)(3)(D) (relating to certification by donee) is amended 
     by inserting ``of books'' after ``to any contribution''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON 
                   WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY 
                   REFUNDS.

       (a) Extension of Temporary Duty Reductions.--Each of the 
     following headings of the Harmonized Tariff Schedule of the 
     United States is amended by striking the date in the 
     effective period column and inserting ``12/31/2014'':
       (1) Heading 9902.51.11 (relating to fabrics of worsted 
     wool).
       (2) Heading 9902.51.13 (relating to yarn of combed wool).
       (3) Heading 9902.51.14 (relating to wool fiber, waste, 
     garnetted stock, combed wool, or wool top).
       (4) Heading 9902.51.15 (relating to fabrics of combed 
     wool).
       (5) Heading 9902.51.16 (relating to fabrics of combed 
     wool).
       (b) Extension of Duty Refunds and Wool Research Trust 
     Fund.--
       (1) In general.--Section 4002(c) of the Wool Suit and 
     Textile Trade Extension Act of 2004 (Public Law 108-429; 118 
     Stat. 2603) is amended--
       (A) in paragraph (3)(C), by striking ``2010'' and inserting 
     ``2015''; and
       (B) in paragraph (6)(A), by striking ``through 2009'' and 
     inserting ``through 2014''.
       (2) Sunset.--Section 506(f) of the Trade and Development 
     Act of 2000 (Public 106-200; 114 Stat. 303 (7 U.S.C. 7101 
     note)) is amended by striking ``2010'' and inserting 
     ``2015''.

          TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS

     SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.

       (a) In General.--Section 7608(c) (relating to rules 
     relating to undercover operations) is amended by striking 
     paragraph (6).
       (b) Effective Date.--The amendment made by this section 
     shall apply to operations conducted after the date of the 
     enactment of this Act.

     SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF INFORMATION 
                   RELATING TO TERRORIST ACTIVITIES.

       (a) Disclosure of Return Information to Apprise Appropriate 
     Officials of Terrorist Activities.--Subparagraph (C) of 
     section 6103(i)(3) is amended by striking clause (iv).
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities.--Paragraph (7) of section 6103(i) is 
     amended by striking subparagraph (E).
       (c) Effective Date.--The amendments made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

        TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS

                     Subtitle A--General Provisions

     SEC. 501. $8,500 INCOME THRESHOLD USED TO CALCULATE 
                   REFUNDABLE PORTION OF CHILD TAX CREDIT.

       (a) In General.--Section 24(d) is amended by adding at the 
     end the following new paragraph:
       ``(4) Special rule for 2008.--Notwithstanding paragraph 
     (3), in the case of any taxable year beginning in 2008, the 
     dollar amount in effect for such taxable year under paragraph 
     (1)(B)(i) shall be $8,500.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION 
                   PRODUCTIONS.

       (a) Extension of Expensing Rules for Qualified Film and 
     Television Productions.--Section 181(f) (relating to 
     termination) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2009''.
       (b) Modification of Limitation on Expensing.--Subparagraph 
     (A) of section 181(a)(2) is amended to read as follows:
       ``(A) In general.--Paragraph (1) shall not apply to so much 
     of the aggregate cost of any qualified film or television 
     production as exceeds $15,000,000.''.
       (c) Modifications to Deduction for Domestic Activities.--
       (1) Determination of w-2 wages.--Paragraph (2) of section 
     199(b) is amended by adding at the end the following new 
     subparagraph:
       ``(D) Special rule for qualified film.--In the case of a 
     qualified film, such term shall include compensation for 
     services performed in the United States by actors, production 
     personnel, directors, and producers.''.
       (2) Definition of qualified film.--Paragraph (6) of section 
     199(c) is amended by adding at the end the following: ``A 
     qualified film shall include any copyrights, trademarks, or 
     other intangibles with respect to such film. The methods and 
     means of distributing a qualified film shall not affect the 
     availability of the deduction under this section.''.
       (3) Partnerships.--Subparagraph (A) of section 199(d)(1) is 
     amended by striking ``and'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(iv) in the case of each partner of a partnership, or 
     shareholder of an S corporation, who owns (directly or 
     indirectly) at least 20 percent of the capital interests in 
     such partnership or of the stock of such S corporation--

       ``(I) such partner or shareholder shall be treated as 
     having engaged directly in any film produced by such 
     partnership or S corporation, and
       ``(II) such partnership or S corporation shall be treated 
     as having engaged directly in any film produced by such 
     partner or shareholder.''.

       (d) Conforming Amendment.--Section 181(d)(3)(A) is amended 
     by striking ``actors'' and all that follows and inserting 
     ``actors, production personnel, directors, and producers.''.
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to qualified film and television productions commencing after 
     December 31, 2007.
       (2) Deduction.--The amendments made by subsection (c) shall 
     apply to taxable years beginning after December 31, 2007.

     SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS 
                   DESIGNED FOR USE BY CHILDREN.

       (a) In General.--Paragraph (2) of section 4161(b) is 
     amended by redesignating subparagraph (B) as subparagraph (C) 
     and by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Exemption for certain wooden arrow shafts.--
     Subparagraph (A) shall not apply to any shaft consisting of 
     all natural wood with no laminations or artificial means of 
     enhancing the spine of such shaft (whether sold separately or 
     incorporated as part of a finished or unfinished product) of 
     a type used in the manufacture of any arrow which after its 
     assembly--
       ``(i) measures \5/16\ of an inch or less in diameter, and
       ``(ii) is not suitable for use with a bow described in 
     paragraph (1)(A).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to shafts first sold after the date of enactment 
     of this Act.

     SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION 
                   WITH THE EXXON VALDEZ LITIGATION.

       (a) Income Averaging of Amounts Received From the Exxon 
     Valdez Litigation.--For purposes of section 1301 of the 
     Internal Revenue Code of 1986--
       (1) any qualified taxpayer who receives any qualified 
     settlement income in any taxable year shall be treated as 
     engaged in a fishing business (determined without regard to 
     the commercial nature of the business), and
       (2) such qualified settlement income shall be treated as 
     income attributable to such a fishing business for such 
     taxable year.
       (b) Contributions of Amounts Received to Retirement 
     Accounts.--
       (1) In general.--Any qualified taxpayer who receives 
     qualified settlement income during the taxable year may, at 
     any time before the end of the taxable year in which such 
     income was received, make one or more contributions to an 
     eligible retirement plan of which such qualified taxpayer is 
     a beneficiary in an aggregate amount not to exceed the lesser 
     of--
       (A) $100,000 (reduced by the amount of qualified settlement 
     income contributed to an eligible retirement plan in prior 
     taxable years pursuant to this subsection), or
       (B) the amount of qualified settlement income received by 
     the individual during the taxable year.
       (2) Time when contributions deemed made.--For purposes of 
     paragraph (1), a qualified taxpayer shall be deemed to have 
     made a contribution to an eligible retirement plan on the 
     last day of the taxable year in which such income is received 
     if the contribution is made on account of such taxable year 
     and is made not later than the time prescribed by law for 
     filing the return for such taxable year (not including 
     extensions thereof).

[[Page 23696]]

       (3) Treatment of contributions to eligible retirement 
     plans.--For purposes of the Internal Revenue Code of 1986, if 
     a contribution is made pursuant to paragraph (1) with respect 
     to qualified settlement income, then--
       (A) except as provided in paragraph (4)--
       (i) to the extent of such contribution, the qualified 
     settlement income shall not be included in taxable income, 
     and
       (ii) for purposes of section 72 of such Code, such 
     contribution shall not be considered to be investment in the 
     contract,
       (B) the qualified taxpayer shall, to the extent of the 
     amount of the contribution, be treated--
       (i) as having received the qualified settlement income--

       (I) in the case of a contribution to an individual 
     retirement plan (as defined under section 7701(a)(37) of such 
     Code), in a distribution described in section 408(d)(3) of 
     such Code, and
       (II) in the case of any other eligible retirement plan, in 
     an eligible rollover distribution (as defined under section 
     402(f)(2) of such Code), and

       (ii) as having transferred the amount to the eligible 
     retirement plan in a direct trustee to trustee transfer 
     within 60 days of the distribution,
       (C) section 408(d)(3)(B) of the Internal Revenue Code of 
     1986 shall not apply with respect to amounts treated as a 
     rollover under this paragraph, and
       (D) section 408A(c)(3)(B) of the Internal Revenue Code of 
     1986 shall not apply with respect to amounts contributed to a 
     Roth IRA (as defined under section 408A(b) of such Code) or a 
     designated Roth contribution to an applicable retirement plan 
     (within the meaning of section 402A of such Code) under this 
     paragraph.
       (4) Special rule for roth iras and roth 401(k)s.--For 
     purposes of the Internal Revenue Code of 1986, if a 
     contribution is made pursuant to paragraph (1) with respect 
     to qualified settlement income to a Roth IRA (as defined 
     under section 408A(b) of such Code) or as a designated Roth 
     contribution to an applicable retirement plan (within the 
     meaning of section 402A of such Code), then--
       (A) the qualified settlement income shall be includible in 
     taxable income, and
       (B) for purposes of section 72 of such Code, such 
     contribution shall be considered to be investment in the 
     contract.
       (5) Eligible retirement plan.--For purpose of this 
     subsection, the term ``eligible retirement plan'' has the 
     meaning given such term under section 402(c)(8)(B) of the 
     Internal Revenue Code of 1986.
       (c) Treatment of Qualified Settlement Income Under 
     Employment Taxes.--
       (1) SECA.--For purposes of chapter 2 of the Internal 
     Revenue Code of 1986 and section 211 of the Social Security 
     Act, no portion of qualified settlement income received by a 
     qualified taxpayer shall be treated as self-employment 
     income.
       (2) FICA.--For purposes of chapter 21 of the Internal 
     Revenue Code of 1986 and section 209 of the Social Security 
     Act, no portion of qualified settlement income received by a 
     qualified taxpayer shall be treated as wages.
       (d) Qualified Taxpayer.--For purposes of this section, the 
     term ``qualified taxpayer'' means--
       (1) any individual who is a plaintiff in the civil action 
     In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D. 
     Alaska); or
       (2) any individual who is a beneficiary of the estate of 
     such a plaintiff who--
       (A) acquired the right to receive qualified settlement 
     income from that plaintiff; and
       (B) was the spouse or an immediate relative of that 
     plaintiff.
       (e) Qualified Settlement Income.--For purposes of this 
     section, the term ``qualified settlement income'' means any 
     interest and punitive damage awards which are--
       (1) otherwise includible in taxable income, and
       (2) received (whether as lump sums or periodic payments) in 
     connection with the civil action In re Exxon Valdez, No. 89-
     095-CV (HRH) (Consolidated) (D. Alaska) (whether pre- or 
     post-judgment and whether related to a settlement or 
     judgment).

     SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT 
                   TREATED AS 5-YEAR PROPERTY.

       (a) In General.--Section 168(e)(3)(B) (defining 5-year 
     property) is amended by striking ``and'' at the end of clause 
     (v), by striking the period at the end of clause (vi)(III) 
     and inserting ``, and'', and by inserting after clause (vi) 
     the following new clause:
       ``(vii) any machinery or equipment (other than any grain 
     bin, cotton ginning asset, fence, or other land improvement) 
     which is used in a farming business (as defined in section 
     263A(e)(4)), the original use of which commences with the 
     taxpayer after December 31, 2008, and which is placed in 
     service before January 1, 2010.''.
       (b) Alternative System.--The table contained in section 
     168(g)(3)(B) (relating to special rule for certain property 
     assigned to classes) is amended by inserting after the item 
     relating to subparagraph (B)(iii) the following:

    (B)(vii)......................................................10''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2008.

     SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF 
                   TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.

       (a) In General.--Subsection (a) of section 6694 is amended 
     to read as follows:
       ``(a) Understatement Due to Unreasonable Positions.--
       ``(1) In general.--If a tax return preparer--
       ``(A) prepares any return or claim of refund with respect 
     to which any part of an understatement of liability is due to 
     a position described in paragraph (2), and
       ``(B) knew (or reasonably should have known) of the 
     position,
     such tax return preparer shall pay a penalty with respect to 
     each such return or claim in an amount equal to the greater 
     of $1,000 or 50 percent of the income derived (or to be 
     derived) by the tax return preparer with respect to the 
     return or claim.
       ``(2) Unreasonable position.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a position is described in this paragraph unless 
     there is or was substantial authority for the position.
       ``(B) Disclosed positions.--If the position was disclosed 
     as provided in section 6662(d)(2)(B)(ii)(I) and is not a 
     position to which subparagraph (C) applies, the position is 
     described in this paragraph unless there is a reasonable 
     basis for the position.
       ``(C) Tax shelters and reportable transactions.--If the 
     position is with respect to a tax shelter (as defined in 
     section 6662(d)(2)(C)(ii)) or a reportable transaction to 
     which section 6662A applies, the position is described in 
     this paragraph unless it is reasonable to believe that the 
     position would more likely than not be sustained on its 
     merits.
       ``(3) Reasonable cause exception.--No penalty shall be 
     imposed under this subsection if it is shown that there is 
     reasonable cause for the understatement and the tax return 
     preparer acted in good faith.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply--
       (1) in the case of a position other than a position 
     described in subparagraph (C) of section 6694(a)(2) of the 
     Internal Revenue Code of 1986 (as amended by this section), 
     to returns prepared after May 25, 2007, and
       (2) in the case of a position described in such 
     subparagraph (C), to returns prepared for taxable years 
     ending after the date of the enactment of this Act.

 Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and 
                      Addiction Equity Act of 2008

     SEC. 511. SHORT TITLE.

       This subtitle may be cited as the ``Paul Wellstone and Pete 
     Domenici Mental Health Parity and Addiction Equity Act of 
     2008''.

     SEC. 512. MENTAL HEALTH PARITY.

       (a) Amendments to ERISA.--Section 712 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1185a) is 
     amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) Financial requirements and treatment limitations.--
       ``(A) In general.--In the case of a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan) that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, such plan 
     or coverage shall ensure that--
       ``(i) the financial requirements applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant financial requirements 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage), and there are no separate 
     cost sharing requirements that are applicable only with 
     respect to mental health or substance use disorder benefits; 
     and
       ``(ii) the treatment limitations applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant treatment limitations 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage) and there are no separate 
     treatment limitations that are applicable only with respect 
     to mental health or substance use disorder benefits.
       ``(B) Definitions.--In this paragraph:
       ``(i) Financial requirement.--The term `financial 
     requirement' includes deductibles, copayments, coinsurance, 
     and out-of-pocket expenses, but excludes an aggregate 
     lifetime limit and an annual limit subject to paragraphs (1) 
     and (2),
       ``(ii) Predominant.--A financial requirement or treatment 
     limit is considered to be predominant if it is the most 
     common or frequent of such type of limit or requirement.
       ``(iii) Treatment limitation.--The term `treatment 
     limitation' includes limits on the frequency of treatment, 
     number of visits, days of coverage, or other similar limits 
     on the scope or duration of treatment.
       ``(4) Availability of plan information.--The criteria for 
     medical necessity determinations made under the plan with 
     respect to mental health or substance use disorder benefits 
     (or the health insurance coverage offered in connection with 
     the plan with respect to such benefits) shall be made 
     available by the plan administrator (or the health insurance 
     issuer offering such coverage) in accordance with regulations 
     to any current or potential participant, beneficiary, or 
     contracting provider upon request. The reason

[[Page 23697]]

     for any denial under the plan (or coverage) of reimbursement 
     or payment for services with respect to mental health or 
     substance use disorder benefits in the case of any 
     participant or beneficiary shall, on request or as otherwise 
     required, be made available by the plan administrator (or the 
     health insurance issuer offering such coverage) to the 
     participant or beneficiary in accordance with regulations.
       ``(5) Out-of-network providers.--In the case of a plan or 
     coverage that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, if the plan 
     or coverage provides coverage for medical or surgical 
     benefits provided by out-of-network providers, the plan or 
     coverage shall provide coverage for mental health or 
     substance use disorder benefits provided by out-of-network 
     providers in a manner that is consistent with the 
     requirements of this section.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) in the case of a group health plan (or health 
     insurance coverage offered in connection with such a plan) 
     that provides mental health or substance use disorder 
     benefits, as affecting the terms and conditions of the plan 
     or coverage relating to such benefits under the plan or 
     coverage, except as provided in subsection (a).'';
       (3) in subsection (c)--
       (A) in paragraph (1)(B)--
       (i) by inserting ``(or 1 in the case of an employer 
     residing in a State that permits small groups to include a 
     single individual)'' after ``at least 2'' the first place 
     that such appears; and
       (ii) by striking ``and who employs at least 2 employees on 
     the first day of the plan year''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Cost exemption.--
       ``(A) In general.--With respect to a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan), if the application of this section to such plan (or 
     coverage) results in an increase for the plan year involved 
     of the actual total costs of coverage with respect to medical 
     and surgical benefits and mental health and substance use 
     disorder benefits under the plan (as determined and certified 
     under subparagraph (C)) by an amount that exceeds the 
     applicable percentage described in subparagraph (B) of the 
     actual total plan costs, the provisions of this section shall 
     not apply to such plan (or coverage) during the following 
     plan year, and such exemption shall apply to the plan (or 
     coverage) for 1 plan year. An employer may elect to continue 
     to apply mental health and substance use disorder parity 
     pursuant to this section with respect to the group health 
     plan (or coverage) involved regardless of any increase in 
     total costs.
       ``(B) Applicable percentage.--With respect to a plan (or 
     coverage), the applicable percentage described in this 
     subparagraph shall be--
       ``(i) 2 percent in the case of the first plan year in which 
     this section is applied; and
       ``(ii) 1 percent in the case of each subsequent plan year.
       ``(C) Determinations by actuaries.--Determinations as to 
     increases in actual costs under a plan (or coverage) for 
     purposes of this section shall be made and certified by a 
     qualified and licensed actuary who is a member in good 
     standing of the American Academy of Actuaries. All such 
     determinations shall be in a written report prepared by the 
     actuary. The report, and all underlying documentation relied 
     upon by the actuary, shall be maintained by the group health 
     plan or health insurance issuer for a period of 6 years 
     following the notification made under subparagraph (E).
       ``(D) 6-month determinations.--If a group health plan (or a 
     health insurance issuer offering coverage in connection with 
     a group health plan) seeks an exemption under this paragraph, 
     determinations under subparagraph (A) shall be made after 
     such plan (or coverage) has complied with this section for 
     the first 6 months of the plan year involved.
       ``(E) Notification.--
       ``(i) In general.--A group health plan (or a health 
     insurance issuer offering coverage in connection with a group 
     health plan) that, based upon a certification described under 
     subparagraph (C), qualifies for an exemption under this 
     paragraph, and elects to implement the exemption, shall 
     promptly notify the Secretary, the appropriate State 
     agencies, and participants and beneficiaries in the plan of 
     such election.
       ``(ii) Requirement.--A notification to the Secretary under 
     clause (i) shall include--

       ``(I) a description of the number of covered lives under 
     the plan (or coverage) involved at the time of the 
     notification, and as applicable, at the time of any prior 
     election of the cost-exemption under this paragraph by such 
     plan (or coverage);
       ``(II) for both the plan year upon which a cost exemption 
     is sought and the year prior, a description of the actual 
     total costs of coverage with respect to medical and surgical 
     benefits and mental health and substance use disorder 
     benefits under the plan; and
       ``(III) for both the plan year upon which a cost exemption 
     is sought and the year prior, the actual total costs of 
     coverage with respect to mental health and substance use 
     disorder benefits under the plan.

       ``(iii) Confidentiality.--A notification to the Secretary 
     under clause (i) shall be confidential. The Secretary shall 
     make available, upon request and on not more than an annual 
     basis, an anonymous itemization of such notifications, that 
     includes--

       ``(I) a breakdown of States by the size and type of 
     employers submitting such notification; and
       ``(II) a summary of the data received under clause (ii).

       ``(F) Audits by appropriate agencies.--To determine 
     compliance with this paragraph, the Secretary may audit the 
     books and records of a group health plan or health insurance 
     issuer relating to an exemption, including any actuarial 
     reports prepared pursuant to subparagraph (C), during the 6 
     year period following the notification of such exemption 
     under subparagraph (E). A State agency receiving a 
     notification under subparagraph (E) may also conduct such an 
     audit with respect to an exemption covered by such 
     notification.'';
       (4) in subsection (e), by striking paragraph (4) and 
     inserting the following:
       ``(4) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for mental 
     health conditions, as defined under the terms of the plan and 
     in accordance with applicable Federal and State law.
       ``(5) Substance use disorder benefits.--The term `substance 
     use disorder benefits' means benefits with respect to 
     services for substance use disorders, as defined under the 
     terms of the plan and in accordance with applicable Federal 
     and State law.'';
       (5) by striking subsection (f);
       (6) by inserting after subsection (e) the following:
       ``(f) Secretary Report.--The Secretary shall, by January 1, 
     2012, and every two years thereafter, submit to the 
     appropriate committees of Congress a report on compliance of 
     group health plans (and health insurance coverage offered in 
     connection with such plans) with the requirements of this 
     section. Such report shall include the results of any surveys 
     or audits on compliance of group health plans (and health 
     insurance coverage offered in connection with such plans) 
     with such requirements and an analysis of the reasons for any 
     failures to comply.
       ``(g) Notice and Assistance.--The Secretary, in cooperation 
     with the Secretaries of Health and Human Services and 
     Treasury, as appropriate, shall publish and widely 
     disseminate guidance and information for group health plans, 
     participants and beneficiaries, applicable State and local 
     regulatory bodies, and the National Association of Insurance 
     Commissioners concerning the requirements of this section and 
     shall provide assistance concerning such requirements and the 
     continued operation of applicable State law. Such guidance 
     and information shall inform participants and beneficiaries 
     of how they may obtain assistance under this section, 
     including, where appropriate, assistance from State consumer 
     and insurance agencies.'';
       (7) by striking ``mental health benefits'' and inserting 
     ``mental health and substance use disorder benefits'' each 
     place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
     (a)(2)(B)(i), and (a)(2)(C); and
       (8) by striking ``mental health benefits'' and inserting 
     ``mental health or substance use disorder benefits'' each 
     place it appears (other than in any provision amended by the 
     previous paragraph).
       (b) Amendments to Public Health Service Act.--Section 2705 
     of the Public Health Service Act (42 U.S.C. 300gg-5) is 
     amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) Financial requirements and treatment limitations.--
       ``(A) In general.--In the case of a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan) that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, such plan 
     or coverage shall ensure that--
       ``(i) the financial requirements applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant financial requirements 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage), and there are no separate 
     cost sharing requirements that are applicable only with 
     respect to mental health or substance use disorder benefits; 
     and
       ``(ii) the treatment limitations applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant treatment limitations 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage) and there are no separate 
     treatment limitations that are applicable only with respect 
     to mental health or substance use disorder benefits.
       ``(B) Definitions.--In this paragraph:
       ``(i) Financial requirement.--The term `financial 
     requirement' includes deductibles, copayments, coinsurance, 
     and out-of-pocket expenses, but excludes an aggregate 
     lifetime limit and an annual limit subject to paragraphs (1) 
     and (2).
       ``(ii) Predominant.--A financial requirement or treatment 
     limit is considered to be predominant if it is the most 
     common or frequent of such type of limit or requirement.

[[Page 23698]]

       ``(iii) Treatment limitation.--The term `treatment 
     limitation' includes limits on the frequency of treatment, 
     number of visits, days of coverage, or other similar limits 
     on the scope or duration of treatment.
       ``(4) Availability of plan information.--The criteria for 
     medical necessity determinations made under the plan with 
     respect to mental health or substance use disorder benefits 
     (or the health insurance coverage offered in connection with 
     the plan with respect to such benefits) shall be made 
     available by the plan administrator (or the health insurance 
     issuer offering such coverage) in accordance with regulations 
     to any current or potential participant, beneficiary, or 
     contracting provider upon request. The reason for any denial 
     under the plan (or coverage) of reimbursement or payment for 
     services with respect to mental health or substance use 
     disorder benefits in the case of any participant or 
     beneficiary shall, on request or as otherwise required, be 
     made available by the plan administrator (or the health 
     insurance issuer offering such coverage) to the participant 
     or beneficiary in accordance with regulations.
       ``(5) Out-of-network providers.--In the case of a plan or 
     coverage that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, if the plan 
     or coverage provides coverage for medical or surgical 
     benefits provided by out-of-network providers, the plan or 
     coverage shall provide coverage for mental health or 
     substance use disorder benefits provided by out-of-network 
     providers in a manner that is consistent with the 
     requirements of this section.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) in the case of a group health plan (or health 
     insurance coverage offered in connection with such a plan) 
     that provides mental health or substance use disorder 
     benefits, as affecting the terms and conditions of the plan 
     or coverage relating to such benefits under the plan or 
     coverage, except as provided in subsection (a).'';
       (3) in subsection (c)--
       (A) in paragraph (1), by inserting before the period the 
     following: ``(as defined in section 2791(e)(4), except that 
     for purposes of this paragraph such term shall include 
     employers with 1 employee in the case of an employer residing 
     in a State that permits small groups to include a single 
     individual)''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Cost exemption.--
       ``(A) In general.--With respect to a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan), if the application of this section to such plan (or 
     coverage) results in an increase for the plan year involved 
     of the actual total costs of coverage with respect to medical 
     and surgical benefits and mental health and substance use 
     disorder benefits under the plan (as determined and certified 
     under subparagraph (C)) by an amount that exceeds the 
     applicable percentage described in subparagraph (B) of the 
     actual total plan costs, the provisions of this section shall 
     not apply to such plan (or coverage) during the following 
     plan year, and such exemption shall apply to the plan (or 
     coverage) for 1 plan year. An employer may elect to continue 
     to apply mental health and substance use disorder parity 
     pursuant to this section with respect to the group health 
     plan (or coverage) involved regardless of any increase in 
     total costs.
       ``(B) Applicable percentage.--With respect to a plan (or 
     coverage), the applicable percentage described in this 
     subparagraph shall be--
       ``(i) 2 percent in the case of the first plan year in which 
     this section is applied; and
       ``(ii) 1 percent in the case of each subsequent plan year.
       ``(C) Determinations by actuaries.--Determinations as to 
     increases in actual costs under a plan (or coverage) for 
     purposes of this section shall be made and certified by a 
     qualified and licensed actuary who is a member in good 
     standing of the American Academy of Actuaries. All such 
     determinations shall be in a written report prepared by the 
     actuary. The report, and all underlying documentation relied 
     upon by the actuary, shall be maintained by the group health 
     plan or health insurance issuer for a period of 6 years 
     following the notification made under subparagraph (E).
       ``(D) 6-month determinations.--If a group health plan (or a 
     health insurance issuer offering coverage in connection with 
     a group health plan) seeks an exemption under this paragraph, 
     determinations under subparagraph (A) shall be made after 
     such plan (or coverage) has complied with this section for 
     the first 6 months of the plan year involved.
       ``(E) Notification.--
       ``(i) In general.--A group health plan (or a health 
     insurance issuer offering coverage in connection with a group 
     health plan) that, based upon a certification described under 
     subparagraph (C), qualifies for an exemption under this 
     paragraph, and elects to implement the exemption, shall 
     promptly notify the Secretary, the appropriate State 
     agencies, and participants and beneficiaries in the plan of 
     such election.
       ``(ii) Requirement.--A notification to the Secretary under 
     clause (i) shall include--

       ``(I) a description of the number of covered lives under 
     the plan (or coverage) involved at the time of the 
     notification, and as applicable, at the time of any prior 
     election of the cost-exemption under this paragraph by such 
     plan (or coverage);
       ``(II) for both the plan year upon which a cost exemption 
     is sought and the year prior, a description of the actual 
     total costs of coverage with respect to medical and surgical 
     benefits and mental health and substance use disorder 
     benefits under the plan; and
       ``(III) for both the plan year upon which a cost exemption 
     is sought and the year prior, the actual total costs of 
     coverage with respect to mental health and substance use 
     disorder benefits under the plan.

       ``(iii) Confidentiality.--A notification to the Secretary 
     under clause (i) shall be confidential. The Secretary shall 
     make available, upon request and on not more than an annual 
     basis, an anonymous itemization of such notifications, that 
     includes--

       ``(I) a breakdown of States by the size and type of 
     employers submitting such notification; and
       ``(II) a summary of the data received under clause (ii).

       ``(F) Audits by appropriate agencies.--To determine 
     compliance with this paragraph, the Secretary may audit the 
     books and records of a group health plan or health insurance 
     issuer relating to an exemption, including any actuarial 
     reports prepared pursuant to subparagraph (C), during the 6 
     year period following the notification of such exemption 
     under subparagraph (E). A State agency receiving a 
     notification under subparagraph (E) may also conduct such an 
     audit with respect to an exemption covered by such 
     notification.'';
       (4) in subsection (e), by striking paragraph (4) and 
     inserting the following:
       ``(4) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for mental 
     health conditions, as defined under the terms of the plan and 
     in accordance with applicable Federal and State law.
       ``(5) Substance use disorder benefits.--The term `substance 
     use disorder benefits' means benefits with respect to 
     services for substance use disorders, as defined under the 
     terms of the plan and in accordance with applicable Federal 
     and State law.'';
       (5) by striking subsection (f);
       (6) by striking ``mental health benefits'' and inserting 
     ``mental health and substance use disorder benefits'' each 
     place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
     (a)(2)(B)(i), and (a)(2)(C); and
       (7) by striking ``mental health benefits'' and inserting 
     ``mental health or substance use disorder benefits'' each 
     place it appears (other than in any provision amended by the 
     previous paragraph).
       (c) Amendments to Internal Revenue Code.--Section 9812 of 
     the Internal Revenue Code of 1986 is amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) Financial requirements and treatment limitations.--
       ``(A) In general.--In the case of a group health plan that 
     provides both medical and surgical benefits and mental health 
     or substance use disorder benefits, such plan shall ensure 
     that--
       ``(i) the financial requirements applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant financial requirements 
     applied to substantially all medical and surgical benefits 
     covered by the plan, and there are no separate cost sharing 
     requirements that are applicable only with respect to mental 
     health or substance use disorder benefits; and
       ``(ii) the treatment limitations applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant treatment limitations 
     applied to substantially all medical and surgical benefits 
     covered by the plan and there are no separate treatment 
     limitations that are applicable only with respect to mental 
     health or substance use disorder benefits.
       ``(B) Definitions.--In this paragraph:
       ``(i) Financial requirement.--The term `financial 
     requirement' includes deductibles, copayments, coinsurance, 
     and out-of-pocket expenses, but excludes an aggregate 
     lifetime limit and an annual limit subject to paragraphs (1) 
     and (2),
       ``(ii) Predominant.--A financial requirement or treatment 
     limit is considered to be predominant if it is the most 
     common or frequent of such type of limit or requirement.
       ``(iii) Treatment limitation.--The term `treatment 
     limitation' includes limits on the frequency of treatment, 
     number of visits, days of coverage, or other similar limits 
     on the scope or duration of treatment.
       ``(4) Availability of plan information.--The criteria for 
     medical necessity determinations made under the plan with 
     respect to mental health or substance use disorder benefits 
     shall be made available by the plan administrator in 
     accordance with regulations to any current or potential 
     participant, beneficiary, or contracting provider upon 
     request. The reason for any denial under the plan of 
     reimbursement or payment for services with respect to mental 
     health or substance use disorder benefits in the case of any 
     participant or beneficiary shall, on request or as otherwise 
     required, be made

[[Page 23699]]

     available by the plan administrator to the participant or 
     beneficiary in accordance with regulations.
       ``(5) Out-of-network providers.--In the case of a plan that 
     provides both medical and surgical benefits and mental health 
     or substance use disorder benefits, if the plan provides 
     coverage for medical or surgical benefits provided by out-of-
     network providers, the plan shall provide coverage for mental 
     health or substance use disorder benefits provided by out-of-
     network providers in a manner that is consistent with the 
     requirements of this section.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) in the case of a group health plan that provides 
     mental health or substance use disorder benefits, as 
     affecting the terms and conditions of the plan relating to 
     such benefits under the plan, except as provided in 
     subsection (a).'';
       (3) in subsection (c)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) Small employer exemption.--
       ``(A) In general.--This section shall not apply to any 
     group health plan for any plan year of a small employer.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     the term `small employer' means, with respect to a calendar 
     year and a plan year, an employer who employed an average of 
     at least 2 (or 1 in the case of an employer residing in a 
     State that permits small groups to include a single 
     individual) but not more than 50 employees on business days 
     during the preceding calendar year. For purposes of the 
     preceding sentence, all persons treated as a single employer 
     under subsection (b), (c), (m), or (o) of section 414 shall 
     be treated as 1 employer and rules similar to rules of 
     subparagraphs (B) and (C) of section 4980D(d)(2) shall 
     apply.''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Cost exemption.--
       ``(A) In general.--With respect to a group health plan, if 
     the application of this section to such plan results in an 
     increase for the plan year involved of the actual total costs 
     of coverage with respect to medical and surgical benefits and 
     mental health and substance use disorder benefits under the 
     plan (as determined and certified under subparagraph (C)) by 
     an amount that exceeds the applicable percentage described in 
     subparagraph (B) of the actual total plan costs, the 
     provisions of this section shall not apply to such plan 
     during the following plan year, and such exemption shall 
     apply to the plan for 1 plan year. An employer may elect to 
     continue to apply mental health and substance use disorder 
     parity pursuant to this section with respect to the group 
     health plan involved regardless of any increase in total 
     costs.
       ``(B) Applicable percentage.--With respect to a plan, the 
     applicable percentage described in this subparagraph shall 
     be--
       ``(i) 2 percent in the case of the first plan year in which 
     this section is applied; and
       ``(ii) 1 percent in the case of each subsequent plan year.
       ``(C) Determinations by actuaries.--Determinations as to 
     increases in actual costs under a plan for purposes of this 
     section shall be made and certified by a qualified and 
     licensed actuary who is a member in good standing of the 
     American Academy of Actuaries. All such determinations shall 
     be in a written report prepared by the actuary. The report, 
     and all underlying documentation relied upon by the actuary, 
     shall be maintained by the group health plan for a period of 
     6 years following the notification made under subparagraph 
     (E).
       ``(D) 6-month determinations.--If a group health plan seeks 
     an exemption under this paragraph, determinations under 
     subparagraph (A) shall be made after such plan has complied 
     with this section for the first 6 months of the plan year 
     involved.
       ``(E) Notification.--
       ``(i) In general.--A group health plan that, based upon a 
     certification described under subparagraph (C), qualifies for 
     an exemption under this paragraph, and elects to implement 
     the exemption, shall promptly notify the Secretary, the 
     appropriate State agencies, and participants and 
     beneficiaries in the plan of such election.
       ``(ii) Requirement.--A notification to the Secretary under 
     clause (i) shall include--

       ``(I) a description of the number of covered lives under 
     the plan involved at the time of the notification, and as 
     applicable, at the time of any prior election of the cost-
     exemption under this paragraph by such plan;
       ``(II) for both the plan year upon which a cost exemption 
     is sought and the year prior, a description of the actual 
     total costs of coverage with respect to medical and surgical 
     benefits and mental health and substance use disorder 
     benefits under the plan; and
       ``(III) for both the plan year upon which a cost exemption 
     is sought and the year prior, the actual total costs of 
     coverage with respect to mental health and substance use 
     disorder benefits under the plan.

       ``(iii) Confidentiality.--A notification to the Secretary 
     under clause (i) shall be confidential. The Secretary shall 
     make available, upon request and on not more than an annual 
     basis, an anonymous itemization of such notifications, that 
     includes--

       ``(I) a breakdown of States by the size and type of 
     employers submitting such notification; and
       ``(II) a summary of the data received under clause (ii).

       ``(F) Audits by appropriate agencies.--To determine 
     compliance with this paragraph, the Secretary may audit the 
     books and records of a group health plan relating to an 
     exemption, including any actuarial reports prepared pursuant 
     to subparagraph (C), during the 6 year period following the 
     notification of such exemption under subparagraph (E). A 
     State agency receiving a notification under subparagraph (E) 
     may also conduct such an audit with respect to an exemption 
     covered by such notification.'';
       (4) in subsection (e), by striking paragraph (4) and 
     inserting the following:
       ``(4) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for mental 
     health conditions, as defined under the terms of the plan and 
     in accordance with applicable Federal and State law.
       ``(5) Substance use disorder benefits.--The term `substance 
     use disorder benefits' means benefits with respect to 
     services for substance use disorders, as defined under the 
     terms of the plan and in accordance with applicable Federal 
     and State law.'';
       (5) by striking subsection (f);
       (6) by striking ``mental health benefits'' and inserting 
     ``mental health and substance use disorder benefits'' each 
     place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
     (a)(2)(B)(i), and (a)(2)(C); and
       (7) by striking ``mental health benefits'' and inserting 
     ``mental health or substance use disorder benefits'' each 
     place it appears (other than in any provision amended by the 
     previous paragraph).
       (d) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Secretaries of Labor, Health and 
     Human Services, and the Treasury shall issue regulations to 
     carry out the amendments made by subsections (a), (b), and 
     (c), respectively.
       (e) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to group health plans for plan years 
     beginning after the date that is 1 year after the date of 
     enactment of this Act, regardless of whether regulations have 
     been issued to carry out such amendments by such effective 
     date, except that the amendments made by subsections (a)(5), 
     (b)(5), and (c)(5), relating to striking of certain sunset 
     provisions, shall take effect on January 1, 2009.
       (2) Special rule for collective bargaining agreements.--In 
     the case of a group health plan maintained pursuant to one or 
     more collective bargaining agreements between employee 
     representatives and one or more employers ratified before the 
     date of the enactment of this Act, the amendments made by 
     this section shall not apply to plan years beginning before 
     the later of--
       (A) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act), or
       (B) January 1, 2009.
     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by this section shall not be treated as a 
     termination of such collective bargaining agreement.
       (f) Assuring Coordination.--The Secretary of Health and 
     Human Services, the Secretary of Labor, and the Secretary of 
     the Treasury may ensure, through the execution or revision of 
     an interagency memorandum of understanding among such 
     Secretaries, that--
       (1) regulations, rulings, and interpretations issued by 
     such Secretaries relating to the same matter over which two 
     or more such Secretaries have responsibility under this 
     section (and the amendments made by this section) are 
     administered so as to have the same effect at all times; and
       (2) coordination of policies relating to enforcing the same 
     requirements through such Secretaries in order to have a 
     coordinated enforcement strategy that avoids duplication of 
     enforcement efforts and assigns priorities in enforcement.
       (g) Conforming Clerical Amendments.--
       (1) ERISA heading.--
       (A) In general.--The heading of section 712 of the Employee 
     Retirement Income Security Act of 1974 is amended to read as 
     follows:

     ``SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
                   DISORDER BENEFITS.''.

       (B) Clerical amendment.--The table of contents in section 1 
     of such Act is amended by striking the item relating to 
     section 712 and inserting the following new item:

``Sec. 712. Parity in mental health and substance use disorder 
              benefits.''.
       (2) PHSA heading.--The heading of section 2705 of the 
     Public Health Service Act is amended to read as follows:

     ``SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
                   DISORDER BENEFITS.''.

       (3) IRC heading.--
       (A) In general.--The heading of section 9812 of the 
     Internal Revenue Code of 1986 is amended to read as follows:

[[Page 23700]]



     ``SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
                   DISORDER BENEFITS.''.

       (B) Clerical amendment.--The table of sections for 
     subchapter B of chapter 100 of such Code is amended by 
     striking the item relating to section 9812 and inserting the 
     following new item:

``Sec. 9812. Parity in mental health and substance use disorder 
              benefits.''.

       (h) GAO Study on Coverage and Exclusion of Mental Health 
     and Substance Use Disorder Diagnoses.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study that analyzes the specific 
     rates, patterns, and trends in coverage and exclusion of 
     specific mental health and substance use disorder diagnoses 
     by health plans and health insurance. The study shall include 
     an analysis of--
       (A) specific coverage rates for all mental health 
     conditions and substance use disorders;
       (B) which diagnoses are most commonly covered or excluded;
       (C) whether implementation of this Act has affected trends 
     in coverage or exclusion of such diagnoses; and
       (D) the impact of covering or excluding specific diagnoses 
     on participants' and enrollees' health, their health care 
     coverage, and the costs of delivering health care.
       (2) Reports.--Not later than 3 years after the date of the 
     enactment of this Act, and 2 years after the date of 
     submission the first report under this paragraph, the 
     Comptroller General shall submit to Congress a report on the 
     results of the study conducted under paragraph (1).

                       TITLE VI--OTHER PROVISIONS

     SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF-
                   DETERMINATION PROGRAM.

       (a) Reauthorization of the Secure Rural Schools and 
     Community Self-Determination Act of 2000.--The Secure Rural 
     Schools and Community Self-Determination Act of 2000 (16 
     U.S.C. 500 note; Public Law 106-393) is amended by striking 
     sections 1 through 403 and inserting the following:

     ``SECTION 1. SHORT TITLE.

       ``This Act may be cited as the `Secure Rural Schools and 
     Community Self-Determination Act of 2000'.

     ``SEC. 2. PURPOSES.

       ``The purposes of this Act are--
       ``(1) to stabilize and transition payments to counties to 
     provide funding for schools and roads that supplements other 
     available funds;
       ``(2) to make additional investments in, and create 
     additional employment opportunities through, projects that--
       ``(A)(i) improve the maintenance of existing 
     infrastructure;
       ``(ii) implement stewardship objectives that enhance forest 
     ecosystems; and
       ``(iii) restore and improve land health and water quality;
       ``(B) enjoy broad-based support; and
       ``(C) have objectives that may include--
       ``(i) road, trail, and infrastructure maintenance or 
     obliteration;
       ``(ii) soil productivity improvement;
       ``(iii) improvements in forest ecosystem health;
       ``(iv) watershed restoration and maintenance;
       ``(v) the restoration, maintenance, and improvement of 
     wildlife and fish habitat;
       ``(vi) the control of noxious and exotic weeds; and
       ``(vii) the reestablishment of native species; and
       ``(3) to improve cooperative relationships among--
       ``(A) the people that use and care for Federal land; and
       ``(B) the agencies that manage the Federal land.

     ``SEC. 3. DEFINITIONS.

       ``In this Act:
       ``(1) Adjusted share.--The term `adjusted share' means the 
     number equal to the quotient obtained by dividing--
       ``(A) the number equal to the quotient obtained by 
     dividing--
       ``(i) the base share for the eligible county; by
       ``(ii) the income adjustment for the eligible county; by
       ``(B) the number equal to the sum of the quotients obtained 
     under subparagraph (A) and paragraph (8)(A) for all eligible 
     counties.
       ``(2) Base share.--The term `base share' means the number 
     equal to the average of--
       ``(A) the quotient obtained by dividing--
       ``(i) the number of acres of Federal land described in 
     paragraph (7)(A) in each eligible county; by
       ``(ii) the total number acres of Federal land in all 
     eligible counties in all eligible States; and
       ``(B) the quotient obtained by dividing--
       ``(i) the amount equal to the average of the 3 highest 25-
     percent payments and safety net payments made to each 
     eligible State for each eligible county during the 
     eligibility period; by
       ``(ii) the amount equal to the sum of the amounts 
     calculated under clause (i) and paragraph (9)(B)(i) for all 
     eligible counties in all eligible States during the 
     eligibility period.
       ``(3) County payment.--The term `county payment' means the 
     payment for an eligible county calculated under section 
     101(b).
       ``(4) Eligible county.--The term `eligible county' means 
     any county that--
       ``(A) contains Federal land (as defined in paragraph (7)); 
     and
       ``(B) elects to receive a share of the State payment or the 
     county payment under section 102(b).
       ``(5) Eligibility period.--The term `eligibility period' 
     means fiscal year 1986 through fiscal year 1999.
       ``(6) Eligible state.--The term `eligible State' means a 
     State or territory of the United States that received a 25-
     percent payment for 1 or more fiscal years of the eligibility 
     period.
       ``(7) Federal land.--The term `Federal land' means--
       ``(A) land within the National Forest System, as defined in 
     section 11(a) of the Forest and Rangeland Renewable Resources 
     Planning Act of 1974 (16 U.S.C. 1609(a)) exclusive of the 
     National Grasslands and land utilization projects designated 
     as National Grasslands administered pursuant to the Act of 
     July 22, 1937 (7 U.S.C. 1010-1012); and
       ``(B) such portions of the revested Oregon and California 
     Railroad and reconveyed Coos Bay Wagon Road grant land as are 
     or may hereafter come under the jurisdiction of the 
     Department of the Interior, which have heretofore or may 
     hereafter be classified as timberlands, and power-site land 
     valuable for timber, that shall be managed, except as 
     provided in the former section 3 of the Act of August 28, 
     1937 (50 Stat. 875; 43 U.S.C. 1181c), for permanent forest 
     production.
       ``(8) 50-Percent adjusted share.--The term `50-percent 
     adjusted share' means the number equal to the quotient 
     obtained by dividing--
       ``(A) the number equal to the quotient obtained by 
     dividing--
       ``(i) the 50-percent base share for the eligible county; by
       ``(ii) the income adjustment for the eligible county; by
       ``(B) the number equal to the sum of the quotients obtained 
     under subparagraph (A) and paragraph (1)(A) for all eligible 
     counties.
       ``(9) 50-Percent base share.--The term `50-percent base 
     share' means the number equal to the average of--
       ``(A) the quotient obtained by dividing--
       ``(i) the number of acres of Federal land described in 
     paragraph (7)(B) in each eligible county; by
       ``(ii) the total number acres of Federal land in all 
     eligible counties in all eligible States; and
       ``(B) the quotient obtained by dividing--
       ``(i) the amount equal to the average of the 3 highest 50-
     percent payments made to each eligible county during the 
     eligibility period; by
       ``(ii) the amount equal to the sum of the amounts 
     calculated under clause (i) and paragraph (2)(B)(i) for all 
     eligible counties in all eligible States during the 
     eligibility period.
       ``(10) 50-percent payment.--The term `50-percent payment' 
     means the payment that is the sum of the 50-percent share 
     otherwise paid to a county pursuant to title II of the Act of 
     August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 
     and the payment made to a county pursuant to the Act of May 
     24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f-1 et 
     seq.).
       ``(11) Full funding amount.--The term `full funding amount' 
     means--
       ``(A) $500,000,000 for fiscal year 2008; and
       ``(B) for fiscal year 2009 and each fiscal year thereafter, 
     the amount that is equal to 90 percent of the full funding 
     amount for the preceding fiscal year.
       ``(12) Income adjustment.--The term `income adjustment' 
     means the square of the quotient obtained by dividing--
       ``(A) the per capita personal income for each eligible 
     county; by
       ``(B) the median per capita personal income of all eligible 
     counties.
       ``(13) Per capita personal income.--The term `per capita 
     personal income' means the most recent per capita personal 
     income data, as determined by the Bureau of Economic 
     Analysis.
       ``(14) Safety net payments.--The term `safety net payments' 
     means the special payment amounts paid to States and counties 
     required by section 13982 or 13983 of the Omnibus Budget 
     Reconciliation Act of 1993 (Public Law 103-66; 16 U.S.C. 500 
     note; 43 U.S.C. 1181f note).
       ``(15) Secretary concerned.--The term `Secretary concerned' 
     means--
       ``(A) the Secretary of Agriculture or the designee of the 
     Secretary of Agriculture with respect to the Federal land 
     described in paragraph (7)(A); and
       ``(B) the Secretary of the Interior or the designee of the 
     Secretary of the Interior with respect to the Federal land 
     described in paragraph (7)(B).
       ``(16) State payment.--The term `State payment' means the 
     payment for an eligible State calculated under section 
     101(a).
       ``(17) 25-Percent payment.--The term `25-percent payment' 
     means the payment to States required by the sixth paragraph 
     under the heading of `FOREST SERVICE' in the Act of May 23, 
     1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act 
     of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

[[Page 23701]]



 ``TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL 
                                  LAND

     ``SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL 
                   LAND.

       ``(a) State Payment.--For each of fiscal years 2008 through 
     2011, the Secretary of Agriculture shall calculate for each 
     eligible State an amount equal to the sum of the products 
     obtained by multiplying--
       ``(1) the adjusted share for each eligible county within 
     the eligible State; by
       ``(2) the full funding amount for the fiscal year.
       ``(b) County Payment.--For each of fiscal years 2008 
     through 2011, the Secretary of the Interior shall calculate 
     for each eligible county that received a 50-percent payment 
     during the eligibility period an amount equal to the product 
     obtained by multiplying--
       ``(1) the 50-percent adjusted share for the eligible 
     county; by
       ``(2) the full funding amount for the fiscal year.

     ``SEC. 102. PAYMENTS TO STATES AND COUNTIES.

       ``(a) Payment Amounts.--Except as provided in section 103, 
     the Secretary of the Treasury shall pay to--
       ``(1) a State or territory of the United States an amount 
     equal to the sum of the amounts elected under subsection (b) 
     by each county within the State or territory for--
       ``(A) if the county is eligible for the 25-percent payment, 
     the share of the 25-percent payment; or
       ``(B) the share of the State payment of the eligible 
     county; and
       ``(2) a county an amount equal to the amount elected under 
     subsection (b) by each county for--
       ``(A) if the county is eligible for the 50-percent payment, 
     the 50-percent payment; or
       ``(B) the county payment for the eligible county.
       ``(b) Election To Receive Payment Amount.--
       ``(1) Election; submission of results.--
       ``(A) In general.--The election to receive a share of the 
     State payment, the county payment, a share of the State 
     payment and the county payment, a share of the 25-percent 
     payment, the 50-percent payment, or a share of the 25-percent 
     payment and the 50-percent payment, as applicable, shall be 
     made at the discretion of each affected county by August 1, 
     2008 (or as soon thereafter as the Secretary concerned 
     determines is practicable), and August 1 of each second 
     fiscal year thereafter, in accordance with paragraph (2), and 
     transmitted to the Secretary concerned by the Governor of 
     each eligible State.
       ``(B) Failure to transmit.--If an election for an affected 
     county is not transmitted to the Secretary concerned by the 
     date specified under subparagraph (A), the affected county 
     shall be considered to have elected to receive a share of the 
     State payment, the county payment, or a share of the State 
     payment and the county payment, as applicable.
       ``(2) Duration of election.--
       ``(A) In general.--A county election to receive a share of 
     the 25-percent payment or 50-percent payment, as applicable, 
     shall be effective for 2 fiscal years.
       ``(B) Full funding amount.--If a county elects to receive a 
     share of the State payment or the county payment, the 
     election shall be effective for all subsequent fiscal years 
     through fiscal year 2011.
       ``(3) Source of payment amounts.--The payment to an 
     eligible State or eligible county under this section for a 
     fiscal year shall be derived from--
       ``(A) any amounts that are appropriated to carry out this 
     Act;
       ``(B) any revenues, fees, penalties, or miscellaneous 
     receipts, exclusive of deposits to any relevant trust fund, 
     special account, or permanent operating funds, received by 
     the Federal Government from activities by the Bureau of Land 
     Management or the Forest Service on the applicable Federal 
     land; and
       ``(C) to the extent of any shortfall, out of any amounts in 
     the Treasury of the United States not otherwise appropriated.
       ``(c) Distribution and Expenditure of Payments.--
       ``(1) Distribution method.--A State that receives a payment 
     under subsection (a) for Federal land described in section 
     3(7)(A) shall distribute the appropriate payment amount among 
     the appropriate counties in the State in accordance with--
       ``(A) the Act of May 23, 1908 (16 U.S.C. 500); and
       ``(B) section 13 of the Act of March 1, 1911 (36 Stat. 963; 
     16 U.S.C. 500).
       ``(2) Expenditure purposes.--Subject to subsection (d), 
     payments received by a State under subsection (a) and 
     distributed to counties in accordance with paragraph (1) 
     shall be expended as required by the laws referred to in 
     paragraph (1).
       ``(d) Expenditure Rules for Eligible Counties.--
       ``(1) Allocations.--
       ``(A) Use of portion in same manner as 25-percent payment 
     or 50-percent payment, as applicable.--Except as provided in 
     paragraph (3)(B), if an eligible county elects to receive its 
     share of the State payment or the county payment, not less 
     than 80 percent, but not more than 85 percent, of the funds 
     shall be expended in the same manner in which the 25-percent 
     payments or 50-percent payment, as applicable, are required 
     to be expended.
       ``(B) Election as to use of balance.--Except as provided in 
     subparagraph (C), an eligible county shall elect to do 1 or 
     more of the following with the balance of any funds not 
     expended pursuant to subparagraph (A):
       ``(i) Reserve any portion of the balance for projects in 
     accordance with title II.
       ``(ii) Reserve not more than 7 percent of the total share 
     for the eligible county of the State payment or the county 
     payment for projects in accordance with title III.
       ``(iii) Return the portion of the balance not reserved 
     under clauses (i) and (ii) to the Treasury of the United 
     States.
       ``(C) Counties with modest distributions.--In the case of 
     each eligible county to which more than $100,000, but less 
     than $350,000, is distributed for any fiscal year pursuant to 
     either or both of paragraphs (1)(B) and (2)(B) of subsection 
     (a), the eligible county, with respect to the balance of any 
     funds not expended pursuant to subparagraph (A) for that 
     fiscal year, shall--
       ``(i) reserve any portion of the balance for--

       ``(I) carrying out projects under title II;
       ``(II) carrying out projects under title III; or
       ``(III) a combination of the purposes described in 
     subclauses (I) and (II); or

       ``(ii) return the portion of the balance not reserved under 
     clause (i) to the Treasury of the United States.
       ``(2) Distribution of funds.--
       ``(A) In general.--Funds reserved by an eligible county 
     under subparagraph (B)(i) or (C)(i) of paragraph (1) for 
     carrying out projects under title II shall be deposited in a 
     special account in the Treasury of the United States.
       ``(B) Availability.--Amounts deposited under subparagraph 
     (A) shall--
       ``(i) be available for expenditure by the Secretary 
     concerned, without further appropriation; and
       ``(ii) remain available until expended in accordance with 
     title II.
       ``(3) Election.--
       ``(A) Notification.--
       ``(i) In general.--An eligible county shall notify the 
     Secretary concerned of an election by the eligible county 
     under this subsection not later than September 30, 2008 (or 
     as soon thereafter as the Secretary concerned determines is 
     practicable), and each September 30 thereafter for each 
     succeeding fiscal year.
       ``(ii) Failure to elect.--Except as provided in 
     subparagraph (B), if the eligible county fails to make an 
     election by the date specified in clause (i), the eligible 
     county shall--

       ``(I) be considered to have elected to expend 85 percent of 
     the funds in accordance with paragraph (1)(A); and
       ``(II) return the balance to the Treasury of the United 
     States.

       ``(B) Counties with minor distributions.--In the case of 
     each eligible county to which less than $100,000 is 
     distributed for any fiscal year pursuant to either or both of 
     paragraphs (1)(B) and (2)(B) of subsection (a), the eligible 
     county may elect to expend all the funds in the same manner 
     in which the 25-percent payments or 50-percent payments, as 
     applicable, are required to be expended.
       ``(e) Time for Payment.--The payments required under this 
     section for a fiscal year shall be made as soon as 
     practicable after the end of that fiscal year.

     ``SEC. 103. TRANSITION PAYMENTS TO STATES.

       ``(a) Definitions.--In this section:
       ``(1) Adjusted amount.--The term `adjusted amount' means, 
     with respect to a covered State--
       ``(A) for fiscal year 2008, 90 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2008; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2008;
       ``(B) for fiscal year 2009, 81 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2009; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2009; and
       ``(C) for fiscal year 2010, 73 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2010; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2010.

[[Page 23702]]

       ``(2) Covered state.--The term `covered State' means each 
     of the States of California, Louisiana, Oregon, Pennsylvania, 
     South Carolina, South Dakota, Texas, and Washington.
       ``(b) Transition Payments.--For each of fiscal years 2008 
     through 2010, in lieu of the payment amounts that otherwise 
     would have been made under paragraphs (1)(B) and (2)(B) of 
     section 102(a), the Secretary of the Treasury shall pay the 
     adjusted amount to each covered State and the eligible 
     counties within the covered State, as applicable.
       ``(c) Distribution of Adjusted Amount.--Except as provided 
     in subsection (d), it is the intent of Congress that the 
     method of distributing the payments under subsection (b) 
     among the counties in the covered States for each of fiscal 
     years 2008 through 2010 be in the same proportion that the 
     payments were distributed to the eligible counties in fiscal 
     year 2006.
       ``(d) Distribution of Payments in California.--The 
     following payments shall be distributed among the eligible 
     counties in the State of California in the same proportion 
     that payments under section 102(a)(2) (as in effect on 
     September 29, 2006) were distributed to the eligible counties 
     for fiscal year 2006:
       ``(1) Payments to the State of California under subsection 
     (b).
       ``(2) The shares of the eligible counties of the State 
     payment for California under section 102 for fiscal year 
     2011.
       ``(e) Treatment of Payments.--For purposes of this Act, any 
     payment made under subsection (b) shall be considered to be a 
     payment made under section 102(a).

              ``TITLE II--SPECIAL PROJECTS ON FEDERAL LAND

     ``SEC. 201. DEFINITIONS.

       ``In this title:
       ``(1) Participating county.--The term `participating 
     county' means an eligible county that elects under section 
     102(d) to expend a portion of the Federal funds received 
     under section 102 in accordance with this title.
       ``(2) Project funds.--The term `project funds' means all 
     funds an eligible county elects under section 102(d) to 
     reserve for expenditure in accordance with this title.
       ``(3) Resource advisory committee.--The term `resource 
     advisory committee' means--
       ``(A) an advisory committee established by the Secretary 
     concerned under section 205; or
       ``(B) an advisory committee determined by the Secretary 
     concerned to meet the requirements of section 205.
       ``(4) Resource management plan.--The term `resource 
     management plan' means--
       ``(A) a land use plan prepared by the Bureau of Land 
     Management for units of the Federal land described in section 
     3(7)(B) pursuant to section 202 of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1712); or
       ``(B) a land and resource management plan prepared by the 
     Forest Service for units of the National Forest System 
     pursuant to section 6 of the Forest and Rangeland Renewable 
     Resources Planning Act of 1974 (16 U.S.C. 1604).

     ``SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS.

       ``(a) Limitation.--Project funds shall be expended solely 
     on projects that meet the requirements of this title.
       ``(b) Authorized Uses.--Project funds may be used by the 
     Secretary concerned for the purpose of entering into and 
     implementing cooperative agreements with willing Federal 
     agencies, State and local governments, private and nonprofit 
     entities, and landowners for protection, restoration, and 
     enhancement of fish and wildlife habitat, and other resource 
     objectives consistent with the purposes of this Act on 
     Federal land and on non-Federal land where projects would 
     benefit the resources on Federal land.

     ``SEC. 203. SUBMISSION OF PROJECT PROPOSALS.

       ``(a) Submission of Project Proposals to Secretary 
     Concerned.--
       ``(1) Projects funded using project funds.--Not later than 
     September 30 for fiscal year 2008 (or as soon thereafter as 
     the Secretary concerned determines is practicable), and each 
     September 30 thereafter for each succeeding fiscal year 
     through fiscal year 2011, each resource advisory committee 
     shall submit to the Secretary concerned a description of any 
     projects that the resource advisory committee proposes the 
     Secretary undertake using any project funds reserved by 
     eligible counties in the area in which the resource advisory 
     committee has geographic jurisdiction.
       ``(2) Projects funded using other funds.--A resource 
     advisory committee may submit to the Secretary concerned a 
     description of any projects that the committee proposes the 
     Secretary undertake using funds from State or local 
     governments, or from the private sector, other than project 
     funds and funds appropriated and otherwise available to do 
     similar work.
       ``(3) Joint projects.--Participating counties or other 
     persons may propose to pool project funds or other funds, 
     described in paragraph (2), and jointly propose a project or 
     group of projects to a resource advisory committee 
     established under section 205.
       ``(b) Required Description of Projects.--In submitting 
     proposed projects to the Secretary concerned under subsection 
     (a), a resource advisory committee shall include in the 
     description of each proposed project the following 
     information:
       ``(1) The purpose of the project and a description of how 
     the project will meet the purposes of this title.
       ``(2) The anticipated duration of the project.
       ``(3) The anticipated cost of the project.
       ``(4) The proposed source of funding for the project, 
     whether project funds or other funds.
       ``(5)(A) Expected outcomes, including how the project will 
     meet or exceed desired ecological conditions, maintenance 
     objectives, or stewardship objectives.
       ``(B) An estimate of the amount of any timber, forage, and 
     other commodities and other economic activity, including jobs 
     generated, if any, anticipated as part of the project.
       ``(6) A detailed monitoring plan, including funding needs 
     and sources, that--
       ``(A) tracks and identifies the positive or negative 
     impacts of the project, implementation, and provides for 
     validation monitoring; and
       ``(B) includes an assessment of the following:
       ``(i) Whether or not the project met or exceeded desired 
     ecological conditions; created local employment or training 
     opportunities, including summer youth jobs programs such as 
     the Youth Conservation Corps where appropriate.
       ``(ii) Whether the project improved the use of, or added 
     value to, any products removed from land consistent with the 
     purposes of this title.
       ``(7) An assessment that the project is to be in the public 
     interest.
       ``(c) Authorized Projects.--Projects proposed under 
     subsection (a) shall be consistent with section 2.

     ``SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY 
                   CONCERNED.

       ``(a) Conditions for Approval of Proposed Project.--The 
     Secretary concerned may make a decision to approve a project 
     submitted by a resource advisory committee under section 203 
     only if the proposed project satisfies each of the following 
     conditions:
       ``(1) The project complies with all applicable Federal laws 
     (including regulations).
       ``(2) The project is consistent with the applicable 
     resource management plan and with any watershed or subsequent 
     plan developed pursuant to the resource management plan and 
     approved by the Secretary concerned.
       ``(3) The project has been approved by the resource 
     advisory committee in accordance with section 205, including 
     the procedures issued under subsection (e) of that section.
       ``(4) A project description has been submitted by the 
     resource advisory committee to the Secretary concerned in 
     accordance with section 203.
       ``(5) The project will improve the maintenance of existing 
     infrastructure, implement stewardship objectives that enhance 
     forest ecosystems, and restore and improve land health and 
     water quality.
       ``(b) Environmental Reviews.--
       ``(1) Request for payment by county.--The Secretary 
     concerned may request the resource advisory committee 
     submitting a proposed project to agree to the use of project 
     funds to pay for any environmental review, consultation, or 
     compliance with applicable environmental laws required in 
     connection with the project.
       ``(2) Conduct of environmental review.--If a payment is 
     requested under paragraph (1) and the resource advisory 
     committee agrees to the expenditure of funds for this 
     purpose, the Secretary concerned shall conduct environmental 
     review, consultation, or other compliance responsibilities in 
     accordance with Federal laws (including regulations).
       ``(3) Effect of refusal to pay.--
       ``(A) In general.--If a resource advisory committee does 
     not agree to the expenditure of funds under paragraph (1), 
     the project shall be deemed withdrawn from further 
     consideration by the Secretary concerned pursuant to this 
     title.
       ``(B) Effect of withdrawal.--A withdrawal under 
     subparagraph (A) shall be deemed to be a rejection of the 
     project for purposes of section 207(c).
       ``(c) Decisions of Secretary Concerned.--
       ``(1) Rejection of projects.--
       ``(A) In general.--A decision by the Secretary concerned to 
     reject a proposed project shall be at the sole discretion of 
     the Secretary concerned.
       ``(B) No administrative appeal or judicial review.--
     Notwithstanding any other provision of law, a decision by the 
     Secretary concerned to reject a proposed project shall not be 
     subject to administrative appeal or judicial review.
       ``(C) Notice of rejection.--Not later than 30 days after 
     the date on which the Secretary concerned makes the rejection 
     decision, the Secretary concerned shall notify in writing the 
     resource advisory committee that submitted the proposed 
     project of the rejection and the reasons for rejection.
       ``(2) Notice of project approval.--The Secretary concerned 
     shall publish in the Federal Register notice of each project 
     approved under subsection (a) if the notice

[[Page 23703]]

     would be required had the project originated with the 
     Secretary.
       ``(d) Source and Conduct of Project.--Once the Secretary 
     concerned accepts a project for review under section 203, the 
     acceptance shall be deemed a Federal action for all purposes.
       ``(e) Implementation of Approved Projects.--
       ``(1) Cooperation.--Notwithstanding chapter 63 of title 31, 
     United States Code, using project funds the Secretary 
     concerned may enter into contracts, grants, and cooperative 
     agreements with States and local governments, private and 
     nonprofit entities, and landowners and other persons to 
     assist the Secretary in carrying out an approved project.
       ``(2) Best value contracting.--
       ``(A) In general.--For any project involving a contract 
     authorized by paragraph (1) the Secretary concerned may elect 
     a source for performance of the contract on a best value 
     basis.
       ``(B) Factors.--The Secretary concerned shall determine 
     best value based on such factors as--
       ``(i) the technical demands and complexity of the work to 
     be done;
       ``(ii)(I) the ecological objectives of the project; and
       ``(II) the sensitivity of the resources being treated;
       ``(iii) the past experience by the contractor with the type 
     of work being done, using the type of equipment proposed for 
     the project, and meeting or exceeding desired ecological 
     conditions; and
       ``(iv) the commitment of the contractor to hiring highly 
     qualified workers and local residents.
       ``(3) Merchantable timber contracting pilot program.--
       ``(A) Establishment.--The Secretary concerned shall 
     establish a pilot program to implement a certain percentage 
     of approved projects involving the sale of merchantable 
     timber using separate contracts for--
       ``(i) the harvesting or collection of merchantable timber; 
     and
       ``(ii) the sale of the timber.
       ``(B) Annual percentages.--Under the pilot program, the 
     Secretary concerned shall ensure that, on a nationwide basis, 
     not less than the following percentage of all approved 
     projects involving the sale of merchantable timber are 
     implemented using separate contracts:
       ``(i) For fiscal year 2008, 35 percent.
       ``(ii) For fiscal year 2009, 45 percent.
       ``(iii) For each of fiscal years 2010 and 2011, 50 percent.
       ``(C) Inclusion in pilot program.--The decision whether to 
     use separate contracts to implement a project involving the 
     sale of merchantable timber shall be made by the Secretary 
     concerned after the approval of the project under this title.
       ``(D) Assistance.--
       ``(i) In general.--The Secretary concerned may use funds 
     from any appropriated account available to the Secretary for 
     the Federal land to assist in the administration of projects 
     conducted under the pilot program.
       ``(ii) Maximum amount of assistance.--The total amount 
     obligated under this subparagraph may not exceed $1,000,000 
     for any fiscal year during which the pilot program is in 
     effect.
       ``(E) Review and report.--
       ``(i) Initial report.--Not later than September 30, 2010, 
     the Comptroller General shall submit to the Committees on 
     Agriculture, Nutrition, and Forestry and Energy and Natural 
     Resources of the Senate and the Committees on Agriculture and 
     Natural Resources of the House of Representatives a report 
     assessing the pilot program.
       ``(ii) Annual report.--The Secretary concerned shall submit 
     to the Committees on Agriculture, Nutrition, and Forestry and 
     Energy and Natural Resources of the Senate and the Committees 
     on Agriculture and Natural Resources of the House of 
     Representatives an annual report describing the results of 
     the pilot program.
       ``(f) Requirements for Project Funds.--The Secretary shall 
     ensure that at least 50 percent of all project funds be used 
     for projects that are primarily dedicated--
       ``(1) to road maintenance, decommissioning, or 
     obliteration; or
       ``(2) to restoration of streams and watersheds.

     ``SEC. 205. RESOURCE ADVISORY COMMITTEES.

       ``(a) Establishment and Purpose of Resource Advisory 
     Committees.--
       ``(1) Establishment.--The Secretary concerned shall 
     establish and maintain resource advisory committees to 
     perform the duties in subsection (b), except as provided in 
     paragraph (4).
       ``(2) Purpose.--The purpose of a resource advisory 
     committee shall be--
       ``(A) to improve collaborative relationships; and
       ``(B) to provide advice and recommendations to the land 
     management agencies consistent with the purposes of this 
     title.
       ``(3) Access to resource advisory committees.--To ensure 
     that each unit of Federal land has access to a resource 
     advisory committee, and that there is sufficient interest in 
     participation on a committee to ensure that membership can be 
     balanced in terms of the points of view represented and the 
     functions to be performed, the Secretary concerned may, 
     establish resource advisory committees for part of, or 1 or 
     more, units of Federal land.
       ``(4) Existing advisory committees.--
       ``(A) In general.--An advisory committee that meets the 
     requirements of this section, a resource advisory committee 
     established before September 29, 2006, or an advisory 
     committee determined by the Secretary concerned before 
     September 29, 2006, to meet the requirements of this section 
     may be deemed by the Secretary concerned to be a resource 
     advisory committee for the purposes of this title.
       ``(B) Charter.--A charter for a committee described in 
     subparagraph (A) that was filed on or before September 29, 
     2006, shall be considered to be filed for purposes of this 
     Act.
       ``(C) Bureau of land management advisory committees.--The 
     Secretary of the Interior may deem a resource advisory 
     committee meeting the requirements of subpart 1784 of part 
     1780 of title 43, Code of Federal Regulations, as a resource 
     advisory committee for the purposes of this title.
       ``(b) Duties.--A resource advisory committee shall--
       ``(1) review projects proposed under this title by 
     participating counties and other persons;
       ``(2) propose projects and funding to the Secretary 
     concerned under section 203;
       ``(3) provide early and continuous coordination with 
     appropriate land management agency officials in recommending 
     projects consistent with purposes of this Act under this 
     title;
       ``(4) provide frequent opportunities for citizens, 
     organizations, tribes, land management agencies, and other 
     interested parties to participate openly and meaningfully, 
     beginning at the early stages of the project development 
     process under this title;
       ``(5)(A) monitor projects that have been approved under 
     section 204; and
       ``(B) advise the designated Federal official on the 
     progress of the monitoring efforts under subparagraph (A); 
     and
       ``(6) make recommendations to the Secretary concerned for 
     any appropriate changes or adjustments to the projects being 
     monitored by the resource advisory committee.
       ``(c) Appointment by the Secretary.--
       ``(1) Appointment and term.--
       ``(A) In general.--The Secretary concerned, shall appoint 
     the members of resource advisory committees for a term of 4 
     years beginning on the date of appointment.
       ``(B) Reappointment.--The Secretary concerned may reappoint 
     members to subsequent 4-year terms.
       ``(2) Basic requirements.--The Secretary concerned shall 
     ensure that each resource advisory committee established 
     meets the requirements of subsection (d).
       ``(3) Initial appointment.--Not later than 180 days after 
     the date of the enactment of this Act, the Secretary 
     concerned shall make initial appointments to the resource 
     advisory committees.
       ``(4) Vacancies.--The Secretary concerned shall make 
     appointments to fill vacancies on any resource advisory 
     committee as soon as practicable after the vacancy has 
     occurred.
       ``(5) Compensation.--Members of the resource advisory 
     committees shall not receive any compensation.
       ``(d) Composition of Advisory Committee.--
       ``(1) Number.--Each resource advisory committee shall be 
     comprised of 15 members.
       ``(2) Community interests represented.--Committee members 
     shall be representative of the interests of the following 3 
     categories:
       ``(A) 5 persons that--
       ``(i) represent organized labor or non-timber forest 
     product harvester groups;
       ``(ii) represent developed outdoor recreation, off highway 
     vehicle users, or commercial recreation activities;
       ``(iii) represent--

       ``(I) energy and mineral development interests; or
       ``(II) commercial or recreational fishing interests;

       ``(iv) represent the commercial timber industry; or
       ``(v) hold Federal grazing or other land use permits, or 
     represent nonindustrial private forest land owners, within 
     the area for which the committee is organized.
       ``(B) 5 persons that represent--
       ``(i) nationally recognized environmental organizations;
       ``(ii) regionally or locally recognized environmental 
     organizations;
       ``(iii) dispersed recreational activities;
       ``(iv) archaeological and historical interests; or
       ``(v) nationally or regionally recognized wild horse and 
     burro interest groups, wildlife or hunting organizations, or 
     watershed associations.
       ``(C) 5 persons that--
       ``(i) hold State elected office (or a designee);
       ``(ii) hold county or local elected office;
       ``(iii) represent American Indian tribes within or adjacent 
     to the area for which the committee is organized;
       ``(iv) are school officials or teachers; or
       ``(v) represent the affected public at large.

[[Page 23704]]

       ``(3) Balanced representation.--In appointing committee 
     members from the 3 categories in paragraph (2), the Secretary 
     concerned shall provide for balanced and broad representation 
     from within each category.
       ``(4) Geographic distribution.--The members of a resource 
     advisory committee shall reside within the State in which the 
     committee has jurisdiction and, to extent practicable, the 
     Secretary concerned shall ensure local representation in each 
     category in paragraph (2).
       ``(5) Chairperson.--A majority on each resource advisory 
     committee shall select the chairperson of the committee.
       ``(e) Approval Procedures.--
       ``(1) In general.--Subject to paragraph (3), each resource 
     advisory committee shall establish procedures for proposing 
     projects to the Secretary concerned under this title.
       ``(2) Quorum.--A quorum must be present to constitute an 
     official meeting of the committee.
       ``(3) Approval by majority of members.--A project may be 
     proposed by a resource advisory committee to the Secretary 
     concerned under section 203(a), if the project has been 
     approved by a majority of members of the committee from each 
     of the 3 categories in subsection (d)(2).
       ``(f) Other Committee Authorities and Requirements.--
       ``(1) Staff assistance.--A resource advisory committee may 
     submit to the Secretary concerned a request for periodic 
     staff assistance from Federal employees under the 
     jurisdiction of the Secretary.
       ``(2) Meetings.--All meetings of a resource advisory 
     committee shall be announced at least 1 week in advance in a 
     local newspaper of record and shall be open to the public.
       ``(3) Records.--A resource advisory committee shall 
     maintain records of the meetings of the committee and make 
     the records available for public inspection.

     ``SEC. 206. USE OF PROJECT FUNDS.

       ``(a) Agreement Regarding Schedule and Cost of Project.--
       ``(1) Agreement between parties.--The Secretary concerned 
     may carry out a project submitted by a resource advisory 
     committee under section 203(a) using project funds or other 
     funds described in section 203(a)(2), if, as soon as 
     practicable after the issuance of a decision document for the 
     project and the exhaustion of all administrative appeals and 
     judicial review of the project decision, the Secretary 
     concerned and the resource advisory committee enter into an 
     agreement addressing, at a minimum, the following:
       ``(A) The schedule for completing the project.
       ``(B) The total cost of the project, including the level of 
     agency overhead to be assessed against the project.
       ``(C) For a multiyear project, the estimated cost of the 
     project for each of the fiscal years in which it will be 
     carried out.
       ``(D) The remedies for failure of the Secretary concerned 
     to comply with the terms of the agreement consistent with 
     current Federal law.
       ``(2) Limited use of federal funds.--The Secretary 
     concerned may decide, at the sole discretion of the Secretary 
     concerned, to cover the costs of a portion of an approved 
     project using Federal funds appropriated or otherwise 
     available to the Secretary for the same purposes as the 
     project.
       ``(b) Transfer of Project Funds.--
       ``(1) Initial transfer required.--As soon as practicable 
     after the agreement is reached under subsection (a) with 
     regard to a project to be funded in whole or in part using 
     project funds, or other funds described in section 203(a)(2), 
     the Secretary concerned shall transfer to the applicable unit 
     of National Forest System land or Bureau of Land Management 
     District an amount of project funds equal to--
       ``(A) in the case of a project to be completed in a single 
     fiscal year, the total amount specified in the agreement to 
     be paid using project funds, or other funds described in 
     section 203(a)(2); or
       ``(B) in the case of a multiyear project, the amount 
     specified in the agreement to be paid using project funds, or 
     other funds described in section 203(a)(2) for the first 
     fiscal year.
       ``(2) Condition on project commencement.--The unit of 
     National Forest System land or Bureau of Land Management 
     District concerned, shall not commence a project until the 
     project funds, or other funds described in section 203(a)(2) 
     required to be transferred under paragraph (1) for the 
     project, have been made available by the Secretary concerned.
       ``(3) Subsequent transfers for multiyear projects.--
       ``(A) In general.--For the second and subsequent fiscal 
     years of a multiyear project to be funded in whole or in part 
     using project funds, the unit of National Forest System land 
     or Bureau of Land Management District concerned shall use the 
     amount of project funds required to continue the project in 
     that fiscal year according to the agreement entered into 
     under subsection (a).
       ``(B) Suspension of work.--The Secretary concerned shall 
     suspend work on the project if the project funds required by 
     the agreement in the second and subsequent fiscal years are 
     not available.

     ``SEC. 207. AVAILABILITY OF PROJECT FUNDS.

       ``(a) Submission of Proposed Projects To Obligate Funds.--
     By September 30, 2008 (or as soon thereafter as the Secretary 
     concerned determines is practicable), and each September 30 
     thereafter for each succeeding fiscal year through fiscal 
     year 2011, a resource advisory committee shall submit to the 
     Secretary concerned pursuant to section 203(a)(1) a 
     sufficient number of project proposals that, if approved, 
     would result in the obligation of at least the full amount of 
     the project funds reserved by the participating county in the 
     preceding fiscal year.
       ``(b) Use or Transfer of Unobligated Funds.--Subject to 
     section 208, if a resource advisory committee fails to comply 
     with subsection (a) for a fiscal year, any project funds 
     reserved by the participating county in the preceding fiscal 
     year and remaining unobligated shall be available for use as 
     part of the project submissions in the next fiscal year.
       ``(c) Effect of Rejection of Projects.--Subject to section 
     208, any project funds reserved by a participating county in 
     the preceding fiscal year that are unobligated at the end of 
     a fiscal year because the Secretary concerned has rejected 
     one or more proposed projects shall be available for use as 
     part of the project submissions in the next fiscal year.
       ``(d) Effect of Court Orders.--
       ``(1) In general.--If an approved project under this Act is 
     enjoined or prohibited by a Federal court, the Secretary 
     concerned shall return the unobligated project funds related 
     to the project to the participating county or counties that 
     reserved the funds.
       ``(2) Expenditure of funds.--The returned funds shall be 
     available for the county to expend in the same manner as the 
     funds reserved by the county under subparagraph (B) or (C)(i) 
     of section 102(d)(1).

     ``SEC. 208. TERMINATION OF AUTHORITY.

       ``(a) In General.--The authority to initiate projects under 
     this title shall terminate on September 30, 2011.
       ``(b) Deposits in Treasury.--Any project funds not 
     obligated by September 30, 2012, shall be deposited in the 
     Treasury of the United States.

                       ``TITLE III--COUNTY FUNDS

     ``SEC. 301. DEFINITIONS.

       ``In this title:
       ``(1) County funds.--The term `county funds' means all 
     funds an eligible county elects under section 102(d) to 
     reserve for expenditure in accordance with this title.
       ``(2) Participating county.--The term `participating 
     county' means an eligible county that elects under section 
     102(d) to expend a portion of the Federal funds received 
     under section 102 in accordance with this title.

     ``SEC. 302. USE.

       ``(a) Authorized Uses.--A participating county, including 
     any applicable agencies of the participating county, shall 
     use county funds, in accordance with this title, only--
       ``(1) to carry out activities under the Firewise 
     Communities program to provide to homeowners in fire-
     sensitive ecosystems education on, and assistance with 
     implementing, techniques in home siting, home construction, 
     and home landscaping that can increase the protection of 
     people and property from wildfires;
       ``(2) to reimburse the participating county for search and 
     rescue and other emergency services, including firefighting, 
     that are--
       ``(A) performed on Federal land after the date on which the 
     use was approved under subsection (b);
       ``(B) paid for by the participating county; and
       ``(3) to develop community wildfire protection plans in 
     coordination with the appropriate Secretary concerned.
       ``(b) Proposals.--A participating county shall use county 
     funds for a use described in subsection (a) only after a 45-
     day public comment period, at the beginning of which the 
     participating county shall--
       ``(1) publish in any publications of local record a 
     proposal that describes the proposed use of the county funds; 
     and
       ``(2) submit the proposal to any resource advisory 
     committee established under section 205 for the participating 
     county.

     ``SEC. 303. CERTIFICATION.

       ``(a) In General.--Not later than February 1 of the year 
     after the year in which any county funds were expended by a 
     participating county, the appropriate official of the 
     participating county shall submit to the Secretary concerned 
     a certification that the county funds expended in the 
     applicable year have been used for the uses authorized under 
     section 302(a), including a description of the amounts 
     expended and the uses for which the amounts were expended.
       ``(b) Review.--The Secretary concerned shall review the 
     certifications submitted under subsection (a) as the 
     Secretary concerned determines to be appropriate.

     ``SEC. 304. TERMINATION OF AUTHORITY.

       ``(a) In General.--The authority to initiate projects under 
     this title terminates on September 30, 2011.
       ``(b) Availability.--Any county funds not obligated by 
     September 30, 2012, shall be returned to the Treasury of the 
     United States.

                  ``TITLE IV--MISCELLANEOUS PROVISIONS

     ``SEC. 401. REGULATIONS.

       ``The Secretary of Agriculture and the Secretary of the 
     Interior shall issue regulations to carry out the purposes of 
     this Act.

[[Page 23705]]



     ``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as are 
     necessary to carry out this Act for each of fiscal years 2008 
     through 2011.

     ``SEC. 403. TREATMENT OF FUNDS AND REVENUES.

       ``(a) Relation to Other Appropriations.--Funds made 
     available under section 402 and funds made available to a 
     Secretary concerned under section 206 shall be in addition to 
     any other annual appropriations for the Forest Service and 
     the Bureau of Land Management.
       ``(b) Deposit of Revenues and Other Funds.--All revenues 
     generated from projects pursuant to title II, including any 
     interest accrued from the revenues, shall be deposited in the 
     Treasury of the United States.''.
       (b) Forest Receipt Payments to Eligible States and 
     Counties.--
       (1) Act of may 23, 1908.--The sixth paragraph under the 
     heading ``FOREST SERVICE'' in the Act of May 23, 1908 (16 
     U.S.C. 500) is amended in the first sentence by striking 
     ``twenty-five percentum'' and all that follows through 
     ``shall be paid'' and inserting the following: ``an amount 
     equal to the annual average of 25 percent of all amounts 
     received for the applicable fiscal year and each of the 
     preceding 6 fiscal years from each national forest shall be 
     paid''.
       (2) Weeks law.--Section 13 of the Act of March 1, 1911 
     (commonly known as the ``Weeks Law'') (16 U.S.C. 500) is 
     amended in the first sentence by striking ``twenty-five 
     percentum'' and all that follows through ``shall be paid'' 
     and inserting the following: ``an amount equal to the annual 
     average of 25 percent of all amounts received for the 
     applicable fiscal year and each of the preceding 6 fiscal 
     years from each national forest shall be paid''.
       (c) Payments in Lieu of Taxes.--
       (1) In general.--Section 6906 of title 31, United States 
     Code, is amended to read as follows:

     ``Sec. 6906. Funding

       ``For each of fiscal years 2008 through 2012--
       ``(1) each county or other eligible unit of local 
     government shall be entitled to payment under this chapter; 
     and
       ``(2) sums shall be made available to the Secretary of the 
     Interior for obligation or expenditure in accordance with 
     this chapter.''.
       (2) Conforming amendment.--The table of sections for 
     chapter 69 of title 31, United States Code, is amended by 
     striking the item relating to section 6906 and inserting the 
     following:

``6906. Funding.''.

       (3) Budget scorekeeping.--
       (A) In general.--Notwithstanding the Budget Scorekeeping 
     Guidelines and the accompanying list of programs and accounts 
     set forth in the joint explanatory statement of the committee 
     of conference accompanying Conference Report 105-217, the 
     section in this title regarding Payments in Lieu of Taxes 
     shall be treated in the baseline for purposes of section 257 
     of the Balanced Budget and Emergency Deficit Control Act of 
     1985 (as in effect prior to September 30, 2002), and by the 
     Chairmen of the House and Senate Budget Committees, as 
     appropriate, for purposes of budget enforcement in the House 
     and Senate, and under the Congressional Budget Act of 1974 as 
     if Payment in Lieu of Taxes (14-1114-0-1-806) were an account 
     designated as Appropriated Entitlements and Mandatories for 
     Fiscal Year 1997 in the joint explanatory statement of the 
     committee of conference accompanying Conference Report 105-
     217.
       (B) Effective date.--This paragraph shall remain in effect 
     for the fiscal years to which the entitlement in section 6906 
     of title 31, United States Code (as amended by paragraph 
     (1)), applies.

     SEC. 602. TRANSFER TO ABANDONED MINE RECLAMATION FUND.

       Subparagraph (C) of section 402(i)(1) of the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 1232(i)(1)) is 
     amended by striking ``and $9,000,000 on October 1, 2009'' and 
     inserting ``$9,000,000 on October 1, 2009, and $9,000,000 on 
     October 1, 2010''.

                       TITLE VII--DISASTER RELIEF

        Subtitle A--Heartland and Hurricane Ike Disaster Relief

     SEC. 701. SHORT TITLE.

       This subtitle may be cited as the ``Heartland Disaster Tax 
     Relief Act of 2008''.

     SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008 
                   MIDWESTERN SEVERE STORMS, TORNADOS, AND 
                   FLOODING.

       (a) In General.--Subject to the modifications described in 
     this section, the following provisions of or relating to the 
     Internal Revenue Code of 1986 shall apply to any Midwestern 
     disaster area in addition to the areas to which such 
     provisions otherwise apply:
       (1) Go zone benefits.--
       (A) Section 1400N (relating to tax benefits) other than 
     subsections (b), (d), (e), (i), (j), (m), and (o) thereof.
       (B) Section 1400O (relating to education tax benefits).
       (C) Section 1400P (relating to housing tax benefits).
       (D) Section 1400Q (relating to special rules for use of 
     retirement funds).
       (E) Section 1400R(a) (relating to employee retention credit 
     for employers).
       (F) Section 1400S (relating to additional tax relief) other 
     than subsection (d) thereof.
       (G) Section 1400T (relating to special rules for mortgage 
     revenue bonds).
       (2) Other benefits included in katrina emergency tax relief 
     act of 2005.--Sections 302, 303, 304, 401, and 405 of the 
     Katrina Emergency Tax Relief Act of 2005.
       (b) Midwestern Disaster Area.--
       (1) In general.--For purposes of this section and for 
     applying the substitutions described in subsections (d) and 
     (e), the term ``Midwestern disaster area'' means an area--
       (A) with respect to which a major disaster has been 
     declared by the President on or after May 20, 2008, and 
     before August 1, 2008, under section 401 of the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act by 
     reason of severe storms, tornados, or flooding occurring in 
     any of the States of Arkansas, Illinois, Indiana, Iowa, 
     Kansas, Michigan, Minnesota, Missouri, Nebraska, and 
     Wisconsin, and
       (B) determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under such Act with respect to damages attributable to such 
     severe storms, tornados, or flooding.
       (2) Certain benefits available to areas eligible only for 
     public assistance.--For purposes of applying this section to 
     benefits under the following provisions, paragraph (1) shall 
     be applied without regard to subparagraph (B):
       (A) Sections 1400Q, 1400S(b), and 1400S(d) of the Internal 
     Revenue Code of 1986.
       (B) Sections 302, 401, and 405 of the Katrina Emergency Tax 
     Relief Act of 2005.
       (c) References.--
       (1) Area.--Any reference in such provisions to the 
     Hurricane Katrina disaster area or the Gulf Opportunity Zone 
     shall be treated as a reference to any Midwestern disaster 
     area and any reference to the Hurricane Katrina disaster area 
     or the Gulf Opportunity Zone within a State shall be treated 
     as a reference to all Midwestern disaster areas within the 
     State.
       (2) Items attributable to disaster.--Any reference in such 
     provisions to any loss, damage, or other item attributable to 
     Hurricane Katrina shall be treated as a reference to any 
     loss, damage, or other item attributable to the severe 
     storms, tornados, or flooding giving rise to any Presidential 
     declaration described in subsection (b)(1)(A).
       (3) Applicable disaster date.--For purposes of applying the 
     substitutions described in subsections (d) and (e), the term 
     ``applicable disaster date'' means, with respect to any 
     Midwestern disaster area, the date on which the severe 
     storms, tornados, or flooding giving rise to the Presidential 
     declaration described in subsection (b)(1)(A) occurred.
       (d) Modifications to 1986 Code.--The following provisions 
     of the Internal Revenue Code of 1986 shall be applied with 
     the following modifications:
       (1) Tax-exempt bond financing.--Section 1400N(a)--
       (A) by substituting ``qualified Midwestern disaster area 
     bond'' for ``qualified Gulf Opportunity Zone Bond'' each 
     place it appears, except that in determining whether a bond 
     is a qualified Midwestern disaster area bond--
       (i) paragraph (2)(A)(i) shall be applied by only treating 
     costs as qualified project costs if--

       (I) in the case of a project involving a private business 
     use (as defined in section 141(b)(6)), either the person 
     using the property suffered a loss in a trade or business 
     attributable to the severe storms, tornados, or flooding 
     giving rise to any Presidential declaration described in 
     subsection (b)(1)(A) or is a person designated for purposes 
     of this section by the Governor of the State in which the 
     project is located as a person carrying on a trade or 
     business replacing a trade or business with respect to which 
     another person suffered such a loss, and
       (II) in the case of a project relating to public utility 
     property, the project involves repair or reconstruction of 
     public utility property damaged by such severe storms, 
     tornados, or flooding, and

       (ii) paragraph (2)(A)(ii) shall be applied by treating an 
     issue as a qualified mortgage issue only if 95 percent or 
     more of the net proceeds (as defined in section 150(a)(3)) of 
     the issue are to be used to provide financing for mortgagors 
     who suffered damages to their principal residences 
     attributable to such severe storms, tornados, or flooding,
       (B) by substituting ``any State in which a Midwestern 
     disaster area is located'' for ``the State of Alabama, 
     Louisiana, or Mississippi'' in paragraph (2)(B),
       (C) by substituting ``designated for purposes of this 
     section (on the basis of providing assistance to areas in the 
     order in which such assistance is most needed)'' for 
     ``designated for purposes of this section'' in paragraph 
     (2)(C),
       (D) by substituting ``January 1, 2013'' for ``January 1, 
     2011'' in paragraph (2)(D),
       (E) in paragraph (3)(A)--
       (i) by substituting ``$1,000'' for ``$2,500'', and
       (ii) by substituting ``before the earliest applicable 
     disaster date for Midwestern disaster areas within the 
     State'' for ``before August 28, 2005'',

[[Page 23706]]

       (F) by substituting ``qualified Midwestern disaster area 
     repair or construction'' for ``qualified GO Zone repair or 
     construction'' each place it appears,
       (G) by substituting ``after the date of the enactment of 
     the Heartland Disaster Tax Relief Act of 2008 and before 
     January 1, 2013'' for ``after the date of the enactment of 
     this paragraph and before January 1, 2011'' in paragraph 
     (7)(C), and
       (H) by disregarding paragraph (8) thereof.
       (2) Low-income housing credit.--Section 1400N(c)--
       (A) only with respect to calendar years 2008, 2009, and 
     2010,
       (B) by substituting ``Disaster Recovery Assistance housing 
     amount'' for ``Gulf Opportunity housing amount'' each place 
     it appears,
       (C) in paragraph (1)(B)--
       (i) by substituting ``$8.00'' for ``$18.00'', and
       (ii) by substituting ``before the earliest applicable 
     disaster date for Midwestern disaster areas within the 
     State'' for ``before August 28, 2005'' , and
       (D) determined without regard to paragraphs (2), (3), (4), 
     (5), and (6) thereof.
       (3) Expensing for certain demolition and clean-up costs.--
     Section 1400N(f)--
       (A) by substituting ``qualified Disaster Recovery 
     Assistance clean-up cost'' for ``qualified Gulf Opportunity 
     Zone clean-up cost'' each place it appears,
       (B) by substituting ``beginning on the applicable disaster 
     date and ending on December 31, 2010'' for ``beginning on 
     August 28, 2005, and ending on December 31, 2007'' in 
     paragraph (2), and
       (C) by treating costs as qualified Disaster Recovery 
     Assistance clean-up costs only if the removal of debris or 
     demolition of any structure was necessary due to damage 
     attributable to the severe storms, tornados, or flooding 
     giving rise to any Presidential declaration described in 
     subsection (b)(1)(A).
       (4) Extension of expensing for environmental remediation 
     costs.--Section 1400N(g)--
       (A) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' each place it appears,
       (B) by substituting ``January 1, 2011'' for ``January 1, 
     2008'' in paragraph (1),
       (C) by substituting ``December 31, 2010'' for ``December 
     31, 2007'' in paragraph (1), and
       (D) by treating a site as a qualified contaminated site 
     only if the release (or threat of release) or disposal of a 
     hazardous substance at the site was attributable to the 
     severe storms, tornados, or flooding giving rise to any 
     Presidential declaration described in subsection (b)(1)(A).
       (5) Increase in rehabilitation credit.--Section 1400N(h), 
     as amended by this Act--
       (A) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'',
       (B) by substituting ``December 31, 2011'' for ``December 
     31, 2009'' in paragraph (1), and
       (C) by only applying such subsection to qualified 
     rehabilitation expenditures with respect to any building or 
     structure which was damaged or destroyed as a result of the 
     severe storms, tornados, or flooding giving rise to any 
     Presidential declaration described in subsection (b)(1)(A).
       (6) Treatment of net operating losses attributable to 
     disaster losses.--Section 1400N(k)--
       (A) by substituting ``qualified Disaster Recovery 
     Assistance loss'' for ``qualified Gulf Opportunity Zone 
     loss'' each place it appears,
       (B) by substituting ``after the day before the applicable 
     disaster date, and before January 1, 2011'' for ``after 
     August 27, 2005, and before January 1, 2008'' each place it 
     appears,
       (C) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' in paragraph (2)(B)(ii)(I),
       (D) by substituting ``qualified Disaster Recovery 
     Assistance property'' for ``qualified Gulf Opportunity Zone 
     property'' in paragraph (2)(B)(iv), and
       (E) by substituting ``qualified Disaster Recovery 
     Assistance casualty loss'' for ``qualified Gulf Opportunity 
     Zone casualty loss'' each place it appears.
       (7) Credit to holders of tax credit bonds.--Section 
     1400N(l)--
       (A) by substituting ``Midwestern tax credit bond'' for 
     ``Gulf tax credit bond'' each place it appears,
       (B) by substituting ``any State in which a Midwestern 
     disaster area is located or any instrumentality of the 
     State'' for ``the State of Alabama, Louisiana, or 
     Mississippi'' in paragraph (4)(A)(i),
       (C) by substituting ``after December 31, 2008 and before 
     January 1, 2010'' for ``after December 31, 2005, and before 
     January 1, 2007'',
       (D) by substituting ``shall not exceed $100,000,000 for any 
     State with an aggregate population located in all Midwestern 
     disaster areas within the State of at least 2,000,000, 
     $50,000,000 for any State with an aggregate population 
     located in all Midwestern disaster areas within the State of 
     at least 1,000,000 but less than 2,000,000, and zero for any 
     other State. The population of a State within any area shall 
     be determined on the basis of the most recent census estimate 
     of resident population released by the Bureau of Census 
     before the earliest applicable disaster date for Midwestern 
     disaster areas within the State.'' for ``shall not exceed'' 
     and all that follows in paragraph (4)(C), and
       (E) by substituting ``the earliest applicable disaster date 
     for Midwestern disaster areas within the State'' for ``August 
     28, 2005'' in paragraph (5)(A).
       (8) Education tax benefits.--Section 1400O, by substituting 
     ``2008 or 2009'' for ``2005 or 2006''.
       (9) Housing tax benefits.--Section 1400P, by substituting 
     ``the applicable disaster date'' for ``August 28, 2005'' in 
     subsection (c)(1).
       (10) Special rules for use of retirement funds.--Section 
     1400Q--
       (A) by substituting ``qualified Disaster Recovery 
     Assistance distribution'' for ``qualified hurricane 
     distribution'' each place it appears,
       (B) by substituting ``on or after the applicable disaster 
     date and before January 1, 2010'' for ``on or after August 
     25, 2005, and before January 1, 2007'' in subsection 
     (a)(4)(A)(i),
       (C) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' in subsections (a)(4)(A)(i) and 
     (c)(3)(B),
       (D) by disregarding clauses (ii) and (iii) of subsection 
     (a)(4)(A) thereof,
       (E) by substituting ``qualified storm damage distribution'' 
     for ``qualified Katrina distribution'' each place it appears,
       (F) by substituting ``after the date which is 6 months 
     before the applicable disaster date and before the date which 
     is the day after the applicable disaster date'' for ``after 
     February 28, 2005, and before August 29, 2005'' in subsection 
     (b)(2)(B)(ii),
       (G) by substituting ``the Midwestern disaster area, but not 
     so purchased or constructed on account of severe storms, 
     tornados, or flooding giving rise to the designation of the 
     area as a disaster area'' for ``the Hurricane Katrina 
     disaster area, but not so purchased or constructed on account 
     of Hurricane Katrina'' in subsection (b)(2)(B)(iii),
       (H) by substituting ``beginning on the applicable disaster 
     date and ending on the date which is 5 months after the date 
     of the enactment of the Heartland Disaster Tax Relief Act of 
     2008'' for ``beginning on August 25, 2005, and ending on 
     February 28, 2006'' in subsection (b)(3)(A),
       (I) by substituting ``qualified storm damage individual'' 
     for ``qualified Hurricane Katrina individual'' each place it 
     appears,
       (J) by substituting ``December 31, 2009'' for ``December 
     31, 2006'' in subsection (c)(2)(A),
       (K) by disregarding subparagraphs (C) and (D) of subsection 
     (c)(3) thereof,
       (L) by substituting ``beginning on the date of the 
     enactment of the Heartland Disaster Tax Relief Act of 2008 
     and ending on December 31, 2009'' for ``beginning on 
     September 24, 2005, and ending on December 31, 2006'' in 
     subsection (c)(4)(A)(i),
       (M) by substituting ``the applicable disaster date'' for 
     ``August 25, 2005'' in subsection (c)(4)(A)(ii), and
       (N) by substituting ``January 1, 2010'' for ``January 1, 
     2007'' in subsection (d)(2)(A)(ii).
       (11) Employee retention credit for employers affected by 
     severe storms, tornados, and flooding.--Section 1400R(a)--
       (A) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' each place it appears,
       (B) by substituting ``January 1, 2009'' for ``January 1, 
     2006'' both places it appears, and
       (C) only with respect to eligible employers who employed an 
     average of not more than 200 employees on business days 
     during the taxable year before the applicable disaster date.
       (12) Temporary suspension of limitations on charitable 
     contributions.--Section 1400S(a), by substituting the 
     following paragraph for paragraph (4) thereof:
       ``(4) Qualified contributions.--
       ``(A) In general.--For purposes of this subsection, the 
     term `qualified contribution' means any charitable 
     contribution (as defined in section 170(c)) if--
       ``(i) such contribution--

       ``(I) is paid during the period beginning on the earliest 
     applicable disaster date for all States and ending on 
     December 31, 2008, in cash to an organization described in 
     section 170(b)(1)(A), and
       ``(II) is made for relief efforts in 1 or more Midwestern 
     disaster areas,

       ``(ii) the taxpayer obtains from such organization 
     contemporaneous written acknowledgment (within the meaning of 
     section 170(f)(8)) that such contribution was used (or is to 
     be used) for relief efforts in 1 or more Midwestern disaster 
     areas, and
       ``(iii) the taxpayer has elected the application of this 
     subsection with respect to such contribution.
       ``(B) Exception.--Such term shall not include a 
     contribution by a donor if the contribution is--
       ``(i) to an organization described in section 509(a)(3), or
       ``(ii) for establishment of a new, or maintenance of an 
     existing, donor advised fund (as defined in section 
     4966(d)(2)).
       ``(C) Application of election to partnerships and s 
     corporations.--In the case of a partnership or S corporation, 
     the election under subparagraph (A)(iii) shall be made 
     separately by each partner or shareholder.''.
       (13) Suspension of certain limitations on personal casualty 
     losses.--Section 1400S(b)(1), by substituting ``the 
     applicable disaster date'' for ``August 25, 2005''.

[[Page 23707]]

       (14) Special rule for determining earned income.--Section 
     1400S(d)--
       (A) by treating an individual as a qualified individual if 
     such individual's principal place of abode on the applicable 
     disaster date was located in a Midwestern disaster area,
       (B) by treating the applicable disaster date with respect 
     to any such individual as the applicable date for purposes of 
     such subsection, and
       (C) by treating an area as described in paragraph 
     (2)(B)(ii) thereof if the area is a Midwestern disaster area 
     only by reason of subsection (b)(2) of this section (relating 
     to areas eligible only for public assistance).
       (15) Adjustments regarding taxpayer and dependency 
     status.--Section 1400S(e), by substituting ``2008 or 2009'' 
     for ``2005 or 2006''.
       (e) Modifications to Katrina Emergency Tax Relief Act of 
     2005.--The following provisions of the Katrina Emergency Tax 
     Relief Act of 2005 shall be applied with the following 
     modifications:
       (1) Additional exemption for housing displaced 
     individual.--Section 302--
       (A) by substituting ``2008 or 2009'' for ``2005 or 2006'' 
     in subsection (a) thereof,
       (B) by substituting ``Midwestern displaced individual'' for 
     ``Hurricane Katrina displaced individual'' each place it 
     appears, and
       (C) by treating an area as a core disaster area for 
     purposes of applying subsection (c) thereof if the area is a 
     Midwestern disaster area without regard to subsection (b)(2) 
     of this section (relating to areas eligible only for public 
     assistance).
       (2) Increase in standard mileage rate.--Section 303, by 
     substituting ``beginning on the applicable disaster date and 
     ending on December 31, 2008'' for ``beginning on August 25, 
     2005, and ending on December 31, 2006''.
       (3) Mileage reimbursements for charitable volunteers.--
     Section 304--
       (A) by substituting ``beginning on the applicable disaster 
     date and ending on December 31, 2008'' for ``beginning on 
     August 25, 2005, and ending on December 31, 2006'' in 
     subsection (a), and
       (B) by substituting ``the applicable disaster date'' for 
     ``August 25, 2005'' in subsection (a).
       (4) Exclusion of certain cancellation of indebtedness 
     income.--Section 401--
       (A) by treating an individual whose principal place of 
     abode on the applicable disaster date was in a Midwestern 
     disaster area (determined without regard to subsection (b)(2) 
     of this section) as an individual described in subsection 
     (b)(1) thereof, and by treating an individual whose principal 
     place of abode on the applicable disaster date was in a 
     Midwestern disaster area solely by reason of subsection 
     (b)(2) of this section as an individual described in 
     subsection (b)(2) thereof,
       (B) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' both places it appears, and
       (C) by substituting ``January 1, 2010'' for ``January 1, 
     2007'' in subsection (e).
       (5) Extension of replacement period for nonrecognition of 
     gain.--Section 405, by substituting ``on or after the 
     applicable disaster date'' for ``on or after August 25, 
     2005''.

     SEC. 703. REPORTING REQUIREMENTS RELATING TO DISASTER RELIEF 
                   CONTRIBUTIONS.

       (a) In General.--Section 6033(b) (relating to returns of 
     certain organizations described in section 501(c)(3)) is 
     amended by striking ``and'' at the end of paragraph (13), by 
     redesignating paragraph (14) as paragraph (15), and by adding 
     after paragraph (13) the following new paragraph:
       ``(14) such information as the Secretary may require with 
     respect to disaster relief activities, including the amount 
     and use of qualified contributions to which section 1400S(a) 
     applies, and''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to returns the due date for which (determined 
     without regard to any extension) occurs after December 31, 
     2008.

     SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW-INCOME 
                   HOUSING TAX RELIEF FOR AREAS DAMAGED BY 
                   HURRICANE IKE.

       (a) Tax-Exempt Bond Financing.--Section 1400N(a) of the 
     Internal Revenue Code of 1986 shall apply to any Hurricane 
     Ike disaster area in addition to any other area referenced in 
     such section, but with the following modifications:
       (1) By substituting ``qualified Hurricane Ike disaster area 
     bond'' for ``qualified Gulf Opportunity Zone Bond'' each 
     place it appears, except that in determining whether a bond 
     is a qualified Hurricane Ike disaster area bond--
       (A) paragraph (2)(A)(i) shall be applied by only treating 
     costs as qualified project costs if--
       (i) in the case of a project involving a private business 
     use (as defined in section 141(b)(6)), either the person 
     using the property suffered a loss in a trade or business 
     attributable to Hurricane Ike or is a person designated for 
     purposes of this section by the Governor of the State in 
     which the project is located as a person carrying on a trade 
     or business replacing a trade or business with respect to 
     which another person suffered such a loss, and
       (ii) in the case of a project relating to public utility 
     property, the project involves repair or reconstruction of 
     public utility property damaged by Hurricane Ike, and
       (B) paragraph (2)(A)(ii) shall be applied by treating an 
     issue as a qualified mortgage issue only if 95 percent or 
     more of the net proceeds (as defined in section 150(a)(3)) of 
     the issue are to be used to provide financing for mortgagors 
     who suffered damages to their principal residences 
     attributable to Hurricane Ike.
       (2) By substituting ``any State in which any Hurricane Ike 
     disaster area is located'' for ``the State of Alabama, 
     Louisiana, or Mississippi'' in paragraph (2)(B).
       (3) By substituting ``designated for purposes of this 
     section (on the basis of providing assistance to areas in the 
     order in which such assistance is most needed)'' for 
     ``designated for purposes of this section'' in paragraph 
     (2)(C).
       (4) By substituting ``January 1, 2013'' for ``January 1, 
     2011'' in paragraph (2)(D).
       (5) By substituting the following for subparagraph (A) of 
     paragraph (3):
       ``(A) Aggregate amount designated.--The maximum aggregate 
     face amount of bonds which may be designated under this 
     subsection with respect to any State shall not exceed the 
     product of $2,000 multiplied by the portion of the State 
     population which is in--
       ``(i) in the case of Texas, the counties of Brazoria, 
     Chambers, Galveston, Jefferson, and Orange, and
       ``(ii) in the case of Louisiana, the parishes of Calcasieu 
     and Cameron,

     (as determined on the basis of the most recent census 
     estimate of resident population released by the Bureau of 
     Census before September 13, 2008).''.
       (6) By substituting ``qualified Hurricane Ike disaster area 
     repair or construction'' for ``qualified GO Zone repair or 
     construction'' each place it appears.
       (7) By substituting ``after the date of the enactment of 
     the Heartland Disaster Tax Relief Act of 2008 and before 
     January 1, 2013'' for ``after the date of the enactment of 
     this paragraph and before January 1, 2011'' in paragraph 
     (7)(C).
       (8) By disregarding paragraph (8) thereof.
       (9) By substituting ``any Hurricane Ike disaster area'' for 
     ``the Gulf Opportunity Zone'' each place it appears.
       (b) Low-Income Housing Credit.--Section 1400N(c) of the 
     Internal Revenue Code of 1986 shall apply to any Hurricane 
     Ike disaster area in addition to any other area referenced in 
     such section, but with the following modifications:
       (1) Only with respect to calendar years 2008, 2009, and 
     2010.
       (2) By substituting ``any Hurricane Ike disaster area'' for 
     ``the Gulf Opportunity Zone'' each place it appears.
       (3) By substituting ``Hurricane Ike Recovery Assistance 
     housing amount'' for ``Gulf Opportunity housing amount'' each 
     place it appears.
       (4) By substituting the following for subparagraph (B) of 
     paragraph (1):
       ``(B) Hurricane ike housing amount.--For purposes of 
     subparagraph (A), the term `Hurricane Ike housing amount' 
     means, for any calendar year, the amount equal to the product 
     of $16.00 multiplied by the portion of the State population 
     which is in--
       ``(i) in the case of Texas, the counties of Brazoria, 
     Chambers, Galveston, Jefferson, and Orange, and
       ``(ii) in the case of Louisiana, the parishes of Calcasieu 
     and Cameron,

     (as determined on the basis of the most recent census 
     estimate of resident population released by the Bureau of 
     Census before September 13, 2008).''.
       (5) Determined without regard to paragraphs (2), (3), (4), 
     (5), and (6) thereof.
       (c) Hurricane Ike Disaster Area.--For purposes of this 
     section and for applying the substitutions described in 
     subsections (a) and (b), the term ``Hurricane Ike disaster 
     area'' means an area in the State of Texas or Louisiana--
       (1) with respect to which a major disaster has been 
     declared by the President on September 13, 2008, under 
     section 401 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act by reason of Hurricane Ike, and
       (2) determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under such Act with respect to damages attributable to 
     Hurricane Ike.

                  Subtitle B--National Disaster Relief

     SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED 
                   DISASTERS.

       (a) Waiver of Adjusted Gross Income Limitation.--
       (1) In general.--Subsection (h) of section 165 is amended 
     by redesignating paragraphs (3) and (4) as paragraphs (4) and 
     (5), respectively, and by inserting after paragraph (2) the 
     following new paragraph:
       ``(3) Special rule for losses in federally declared 
     disasters.--
       ``(A) In general.--If an individual has a net disaster loss 
     for any taxable year, the amount determined under paragraph 
     (2)(A)(ii) shall be the sum of--
       ``(i) such net disaster loss, and
       ``(ii) so much of the excess referred to in the matter 
     preceding clause (i) of paragraph (2)(A) (reduced by the 
     amount in clause (i) of this subparagraph) as exceeds 10 
     percent of the adjusted gross income of the individual.

[[Page 23708]]

       ``(B) Net disaster loss.--For purposes of subparagraph (A), 
     the term `net disaster loss' means the excess of--
       ``(i) the personal casualty losses--

       ``(I) attributable to a federally declared disaster 
     occurring before January 1, 2010, and
       ``(II) occurring in a disaster area, over

       ``(ii) personal casualty gains.
       ``(C) Federally declared disaster.--For purposes of this 
     paragraph--
       ``(i) Federally declared disaster.--The term `federally 
     declared disaster' means any disaster subsequently determined 
     by the President of the United States to warrant assistance 
     by the Federal Government under the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act.
       ``(ii) Disaster area.--The term `disaster area' means the 
     area so determined to warrant such assistance.''.
       (2) Conforming amendments.--
       (A) Section 165(h)(4)(B) (as so redesignated) is amended by 
     striking ``paragraph (2)'' and inserting ``paragraphs (2) and 
     (3)''.
       (B) Section 165(i)(1) is amended by striking ``loss'' and 
     all that follows through ``Act'' and inserting ``loss 
     occurring in a disaster area (as defined by clause (ii) of 
     subsection (h)(3)(C)) and attributable to a federally 
     declared disaster (as defined by clause (i) of such 
     subsection)''.
       (C) Section 165(i)(4) is amended by striking 
     ``Presidentially declared disaster (as defined by section 
     1033(h)(3))'' and inserting ``federally declared disaster (as 
     defined by subsection (h)(3)(C)(i)''.
       (D)(i) So much of subsection (h) of section 1033 as 
     precedes subparagraph (A) of paragraph (1) thereof is amended 
     to read as follows:
       ``(h) Special Rules for Property Damaged by Federally 
     Declared Disasters.--
       ``(1) Principal residences.--If the taxpayer's principal 
     residence or any of its contents is located in a disaster 
     area and is compulsorily or involuntarily converted as a 
     result of a federally declared disaster--''.
       (ii) Paragraph (2) of section 1033(h) is amended by 
     striking ``investment'' and all that follows through 
     ``disaster'' and inserting ``investment located in a disaster 
     area and compulsorily or involuntarily converted as a result 
     of a federally declared disaster''.
       (iii) Paragraph (3) of section 1033(h) is amended to read 
     as follows:
       ``(3) Federally declared disaster; disaster area.--The 
     terms ``federally declared disaster'' and ``disaster area'' 
     shall have the respective meaning given such terms by section 
     165(h)(3)(C).''.
       (iv) Section 139(c)(2) is amended to read as follows:
       ``(2) federally declared disaster (as defined by section 
     165(h)(3)(C)(i)),''.
       (v) Subclause (II) of section 172(b)(1)(F)(ii) is amended 
     by striking ``Presidentially declared disasters (as defined 
     in section 1033(h)(3))'' and inserting ``federally declared 
     disasters (as defined by subsection (h)(3)(C)(i))''.
       (vi) Subclause (III) of section 172(b)(1)(F)(ii) is amended 
     by striking ``Presidentially declared disasters'' and 
     inserting ``federally declared disasters''.
       (vii) Subsection (a) of section 7508A is amended by 
     striking ``Presidentially declared disaster (as defined in 
     section 1033(h)(3))'' and inserting ``federally declared 
     disaster (as defined by section 165(h)(3)(C)(i))''.
       (b) Increase in Standard Deduction by Disaster Casualty 
     Loss.--
       (1) In general.--Paragraph (1) of section 63(c), as amended 
     by the Housing Assistance Tax Act of 2008, is amended by 
     striking ``and'' at the end of subparagraph (B), by striking 
     the period at the end of subparagraph (C) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(D) the disaster loss deduction.''.
       (2) Disaster loss deduction.--Subsection (c) of section 63, 
     as amended by the Housing Assistance Tax Act of 2008, is 
     amended by adding at the end the following new paragraph:
       ``(8) Disaster loss deduction.--For the purposes of 
     paragraph (1), the term `disaster loss deduction' means the 
     net disaster loss (as defined in section 165(h)(3)(B)).''.
       (3) Allowance in computing alternative minimum taxable 
     income.--Subparagraph (E) of section 56(b)(1) is amended by 
     adding at the end the following new sentence: ``The preceding 
     sentence shall not apply to so much of the standard deduction 
     as is determined under section 63(c)(1)(D).''.
       (c) Increase in Limitation on Individual Loss Per 
     Casualty.--Paragraph (1) of section 165(h) is amended by 
     striking ``$100'' and inserting ``$500 ($100 for taxable 
     years beginning after December 31, 2009)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to disasters 
     declared in taxable years beginning after December 31, 2007.
       (2) Increase in limitation on individual loss per 
     casualty.--The amendment made by subsection (c) shall apply 
     to taxable years beginning after December 31, 2008.

     SEC. 707. EXPENSING OF QUALIFIED DISASTER EXPENSES.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 198 the following new 
     section:

     ``SEC. 198A. EXPENSING OF QUALIFIED DISASTER EXPENSES.

       ``(a) In General.--A taxpayer may elect to treat any 
     qualified disaster expenses which are paid or incurred by the 
     taxpayer as an expense which is not chargeable to capital 
     account. Any expense which is so treated shall be allowed as 
     a deduction for the taxable year in which it is paid or 
     incurred.
       ``(b) Qualified Disaster Expense.--For purposes of this 
     section, the term `qualified disaster expense' means any 
     expenditure--
       ``(1) which is paid or incurred in connection with a trade 
     or business or with business-related property,
       ``(2) which is--
       ``(A) for the abatement or control of hazardous substances 
     that were released on account of a federally declared 
     disaster occurring before January 1, 2010,
       ``(B) for the removal of debris from, or the demolition of 
     structures on, real property which is business-related 
     property damaged or destroyed as a result of a federally 
     declared disaster occurring before such date, or
       ``(C) for the repair of business-related property damaged 
     as a result of a federally declared disaster occurring before 
     such date, and
       ``(3) which is otherwise chargeable to capital account.
       ``(c) Other Definitions.--For purposes of this section--
       ``(1) Business-related property.--The term `business-
     related property' means property--
       ``(A) held by the taxpayer for use in a trade or business 
     or for the production of income, or
       ``(B) described in section 1221(a)(1) in the hands of the 
     taxpayer.
       ``(2) Federally declared disaster.--The term `federally 
     declared disaster' has the meaning given such term by section 
     165(h)(3)(C)(i).
       ``(d) Deduction Recaptured as Ordinary Income on Sale, 
     etc.--Solely for purposes of section 1245, in the case of 
     property to which a qualified disaster expense would have 
     been capitalized but for this section--
       ``(1) the deduction allowed by this section for such 
     expense shall be treated as a deduction for depreciation, and
       ``(2) such property (if not otherwise section 1245 
     property) shall be treated as section 1245 property solely 
     for purposes of applying section 1245 to such deduction.
       ``(e) Coordination With Other Provisions.--Sections 198, 
     280B, and 468 shall not apply to amounts which are treated as 
     expenses under this section.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1 is amended by inserting after 
     the item relating to section 198 the following new item:

``Sec. 198A. Expensing of Qualified Disaster Expenses.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007 in connection with disaster declared after such date.

     SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY 
                   DECLARED DISASTERS.

       (a) In General.--Paragraph (1) of section 172(b) is amended 
     by adding at the end the following new subparagraph:
       ``(J) Certain losses attributable federally declared 
     disasters.--In the case of a taxpayer who has a qualified 
     disaster loss (as defined in subsection (j)), such loss shall 
     be a net operating loss carryback to each of the 5 taxable 
     years preceding the taxable year of such loss.''.
       (b) Qualified Disaster Loss.--Section 172 is amended by 
     redesignating subsections (j) and (k) as subsections (k) and 
     (l), respectively, and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Rules Relating to Qualified Disaster Losses.--For 
     purposes of this section--
       ``(1) In general.--The term `qualified disaster loss' means 
     the lesser of--
       ``(A) the sum of--
       ``(i) the losses allowable under section 165 for the 
     taxable year--

       ``(I) attributable to a federally declared disaster (as 
     defined in section 165(h)(3)(C)(i)) occurring before January 
     1, 2010, and
       ``(II) occurring in a disaster area (as defined in section 
     165(h)(3)(C)(ii)), and

       ``(ii) the deduction for the taxable year for qualified 
     disaster expenses which is allowable under section 198A(a) or 
     which would be so allowable if not otherwise treated as an 
     expense, or
       ``(B) the net operating loss for such taxable year.
       ``(2) Coordination with subsection (b)(2).--For purposes of 
     applying subsection (b)(2), a qualified disaster loss for any 
     taxable year shall be treated in a manner similar to the 
     manner in which a specified liability loss is treated.
       ``(3) Election.--Any taxpayer entitled to a 5-year 
     carryback under subsection (b)(1)(J) from any loss year may 
     elect to have the carryback period with respect to such loss

[[Page 23709]]

     year determined without regard to subsection (b)(1)(J). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.
       ``(4) Exclusion.--The term `qualified disaster loss' shall 
     not include any loss with respect to any property described 
     in section 1400N(p)(3).''.
       (c) Loss Deduction Allowed in Computing Alternative Minimum 
     Taxable Income.--Subsection (d) of section 56 is amended by 
     adding at the end the following new paragraph:
       ``(3) Net operating loss attributable to federally declared 
     disasters.--In the case of a taxpayer which has a qualified 
     disaster loss (as defined by section 172(b)(1)(J)) for the 
     taxable year, paragraph (1) shall be applied by increasing 
     the amount determined under subparagraph (A)(ii)(I) thereof 
     by the sum of the carrybacks and carryovers of such loss.''.
       (d) Conforming Amendments.--
       (1) Clause (ii) of section 172(b)(1)(F) is amended by 
     inserting ``or qualified disaster loss (as defined in 
     subsection (j))'' before the period at the end of the last 
     sentence.
       (2) Paragraph (1) of section 172(i) is amended by adding at 
     the end the following new flush sentence:

     ``Such term shall not include any qualified disaster loss (as 
     defined in subsection (j)).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to losses arising in taxable years beginning 
     after December 31, 2007, in connection with disasters 
     declared after such date.

     SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND 
                   REQUIREMENTS FOLLOWING FEDERALLY DECLARED 
                   DISASTERS.

       (a) In General.--Subsection (k) of section 143 is amended 
     by adding at the end the following new paragraph:
       ``(12) Special rules for residences destroyed in federally 
     declared disasters.--
       ``(A) Principal residence destroyed.--At the election of 
     the taxpayer, if the principal residence (within the meaning 
     of section 121) of such taxpayer is--
       ``(i) rendered unsafe for use as a residence by reason of a 
     federally declared disaster occurring before January 1, 2010, 
     or
       ``(ii) demolished or relocated by reason of an order of the 
     government of a State or political subdivision thereof on 
     account of a federally declared disaster occurring before 
     such date,

     then, for the 2-year period beginning on the date of the 
     disaster declaration, subsection (d)(1) shall not apply with 
     respect to such taxpayer and subsection (e) shall be applied 
     by substituting `110' for `90' in paragraph (1) thereof.
       ``(B) Principal residence damaged.--
       ``(i) In general.--At the election of the taxpayer, if the 
     principal residence (within the meaning of section 121) of 
     such taxpayer was damaged as the result of a federally 
     declared disaster occurring before January 1, 2010, any 
     owner-financing provided in connection with the repair or 
     reconstruction of such residence shall be treated as a 
     qualified rehabilitation loan.
       ``(ii) Limitation.--The aggregate owner-financing to which 
     clause (i) applies shall not exceed the lesser of--

       ``(I) the cost of such repair or reconstruction, or
       ``(II) $150,000.

       ``(C) Federally declared disaster.--For purposes of this 
     paragraph, the term `federally declared disaster' has the 
     meaning given such term by section 165(h)(3)(C)(i).
       ``(D) Election; denial of double benefit.--
       ``(i) Election.--An election under this paragraph may not 
     be revoked except with the consent of the Secretary.
       ``(ii) Denial of double benefit.--If a taxpayer elects the 
     application of this paragraph, paragraph (11) shall not apply 
     with respect to the purchase or financing of any residence by 
     such taxpayer.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to disasters occurring after December 31, 2007.

     SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED 
                   DISASTER PROPERTY.

       (a) In General.--Section 168, as amended by this Act, is 
     amended by adding at the end the following new subsection:
       ``(n) Special Allowance for Qualified Disaster Assistance 
     Property.--
       ``(1) In general.--In the case of any qualified disaster 
     assistance property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of the qualified disaster assistance property, 
     and
       ``(B) the adjusted basis of the qualified disaster 
     assistance property shall be reduced by the amount of such 
     deduction before computing the amount otherwise allowable as 
     a depreciation deduction under this chapter for such taxable 
     year and any subsequent taxable year.
       ``(2) Qualified disaster assistance property.--For purposes 
     of this subsection--
       ``(A) In general.--The term `qualified disaster assistance 
     property' means any property--
       ``(i)(I) which is described in subsection (k)(2)(A)(i), or
       ``(II) which is nonresidential real property or residential 
     rental property,
       ``(ii) substantially all of the use of which is--

       ``(I) in a disaster area with respect to a federally 
     declared disaster occurring before January 1, 2010, and
       ``(II) in the active conduct of a trade or business by the 
     taxpayer in such disaster area,

       ``(iii) which--

       ``(I) rehabilitates property damaged, or replaces property 
     destroyed or condemned, as a result of such federally 
     declared disaster, except that, for purposes of this clause, 
     property shall be treated as replacing property destroyed or 
     condemned if, as part of an integrated plan, such property 
     replaces property which is included in a continuous area 
     which includes real property destroyed or condemned, and
       ``(II) is similar in nature to, and located in the same 
     county as, the property being rehabilitated or replaced,

       ``(iv) the original use of which in such disaster area 
     commences with an eligible taxpayer on or after the 
     applicable disaster date,
       ``(v) which is acquired by such eligible taxpayer by 
     purchase (as defined in section 179(d)) on or after the 
     applicable disaster date, but only if no written binding 
     contract for the acquisition was in effect before such date, 
     and
       ``(vi) which is placed in service by such eligible taxpayer 
     on or before the date which is the last day of the third 
     calendar year following the applicable disaster date (the 
     fourth calendar year in the case of nonresidential real 
     property and residential rental property).
       ``(B) Exceptions.--
       ``(i) Other bonus depreciation property.--The term 
     `qualified disaster assistance property' shall not include--

       ``(I) any property to which subsection (k) (determined 
     without regard to paragraph (4)), (l), or (m) applies,
       ``(II) any property to which section 1400N(d) applies, and
       ``(III) any property described in section 1400N(p)(3).

       ``(ii) Alternative depreciation property.--The term 
     `qualified disaster assistance property' shall not include 
     any property to which the alternative depreciation system 
     under subsection (g) applies, determined without regard to 
     paragraph (7) of subsection (g) (relating to election to have 
     system apply).
       ``(iii) Tax-exempt bond financed property.--Such term shall 
     not include any property any portion of which is financed 
     with the proceeds of any obligation the interest on which is 
     exempt from tax under section 103.
       ``(iv) Qualified revitalization buildings.--Such term shall 
     not include any qualified revitalization building with 
     respect to which the taxpayer has elected the application of 
     paragraph (1) or (2) of section 1400I(a).
       ``(v) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(C) Special rules.--For purposes of this subsection, 
     rules similar to the rules of subparagraph (E) of subsection 
     (k)(2) shall apply, except that such subparagraph shall be 
     applied--
       ``(i) by substituting `the applicable disaster date' for 
     `December 31, 2007' each place it appears therein,
       ``(ii) without regard to `and before January 1, 2009' in 
     clause (i) thereof, and
       ``(iii) by substituting `qualified disaster assistance 
     property' for `qualified property' in clause (iv) thereof.
       ``(D) Allowance against alternative minimum tax.--For 
     purposes of this subsection, rules similar to the rules of 
     subsection (k)(2)(G) shall apply.
       ``(3) Other definitions.--For purposes of this subsection--
       ``(A) Applicable disaster date.--The term `applicable 
     disaster date' means, with respect to any federally declared 
     disaster, the date on which such federally declared disaster 
     occurs.
       ``(B) Federally declared disaster.--The term `federally 
     declared disaster' has the meaning given such term under 
     section 165(h)(3)(C)(i).
       ``(C) Disaster area.--The term `disaster area' has the 
     meaning given such term under section 165(h)(3)(C)(ii).
       ``(D) Eligible taxpayer.--The term `eligible taxpayer' 
     means a taxpayer who has suffered an economic loss 
     attributable to a federally declared disaster.
       ``(4) Recapture.--For purposes of this subsection, rules 
     similar to the rules under section 179(d)(10) shall apply 
     with respect to any qualified disaster assistance property 
     which ceases to be qualified disaster assistance property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property

[[Page 23710]]

     placed in service after December 31, 2007, with respect 
     disasters declared after such date.

     SEC. 711. INCREASED EXPENSING FOR QUALIFIED DISASTER 
                   ASSISTANCE PROPERTY.

       (a) In General.--Section 179 is amended by adding at the 
     end the following new subsection:
       ``(e) Special Rules for Qualified Disaster Assistance 
     Property.--
       ``(1) In general.--For purposes of this section--
       ``(A) the dollar amount in effect under subsection (b)(1) 
     for the taxable year shall be increased by the lesser of--
       ``(i) $100,000, or
       ``(ii) the cost of qualified section 179 disaster 
     assistance property placed in service during the taxable 
     year, and
       ``(B) the dollar amount in effect under subsection (b)(2) 
     for the taxable year shall be increased by the lesser of--
       ``(i) $600,000, or
       ``(ii) the cost of qualified section 179 disaster 
     assistance property placed in service during the taxable 
     year.
       ``(2) Qualified section 179 disaster assistance property.--
     For purposes of this subsection, the term `qualified section 
     179 disaster assistance property' means section 179 property 
     (as defined in subsection (d)) which is qualified disaster 
     assistance property (as defined in section 168(n)(2)).
       ``(3) Coordination with empowerment zones and renewal 
     communities.--For purposes of sections 1397A and 1400J, 
     qualified section 179 disaster assistance property shall not 
     be treated as qualified zone property or qualified renewal 
     property, unless the taxpayer elects not to take such 
     qualified section 179 disaster assistance property into 
     account for purposes of this subsection.
       ``(4) Recapture.--For purposes of this subsection, rules 
     similar to the rules under subsection (d)(10) shall apply 
     with respect to any qualified section 179 disaster assistance 
     property which ceases to be qualified section 179 disaster 
     assistance property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007, with respect disasters declared after such date.

     SEC. 712. COORDINATION WITH HEARTLAND DISASTER RELIEF.

       The amendments made by this subtitle, other than the 
     amendments made by sections 706(a)(2), 710, and 711, shall 
     not apply to any disaster described in section 702(c)(1)(A), 
     or to any expenditure or loss resulting from such disaster.

TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW 
                           TAX RELIEF POLICY

     SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
                   INDIFFERENT PARTIES.

       (a) In General.--Subpart B of part II of subchapter E of 
     chapter 1 is amended by inserting after section 457 the 
     following new section:

     ``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN 
                   TAX INDIFFERENT PARTIES.

       ``(a) In General.--Any compensation which is deferred under 
     a nonqualified deferred compensation plan of a nonqualified 
     entity shall be includible in gross income when there is no 
     substantial risk of forfeiture of the rights to such 
     compensation.
       ``(b) Nonqualified Entity.--For purposes of this section, 
     the term `nonqualified entity' means--
       ``(1) any foreign corporation unless substantially all of 
     its income is--
       ``(A) effectively connected with the conduct of a trade or 
     business in the United States, or
       ``(B) subject to a comprehensive foreign income tax, and
       ``(2) any partnership unless substantially all of its 
     income is allocated to persons other than--
       ``(A) foreign persons with respect to whom such income is 
     not subject to a comprehensive foreign income tax, and
       ``(B) organizations which are exempt from tax under this 
     title.
       ``(c) Determinability of Amounts of Compensation.--
       ``(1) In general.--If the amount of any compensation is not 
     determinable at the time that such compensation is otherwise 
     includible in gross income under subsection (a)--
       ``(A) such amount shall be so includible in gross income 
     when determinable, and
       ``(B) the tax imposed under this chapter for the taxable 
     year in which such compensation is includible in gross income 
     shall be increased by the sum of--
       ``(i) the amount of interest determined under paragraph 
     (2), and
       ``(ii) an amount equal to 20 percent of the amount of such 
     compensation.
       ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
     interest determined under this paragraph for any taxable year 
     is the amount of interest at the underpayment rate under 
     section 6621 plus 1 percentage point on the underpayments 
     that would have occurred had the deferred compensation been 
     includible in gross income for the taxable year in which 
     first deferred or, if later, the first taxable year in which 
     such deferred compensation is not subject to a substantial 
     risk of forfeiture.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Substantial risk of forfeiture.--
       ``(A) In general.--The rights of a person to compensation 
     shall be treated as subject to a substantial risk of 
     forfeiture only if such person's rights to such compensation 
     are conditioned upon the future performance of substantial 
     services by any individual.
       ``(B) Exception for compensation based on gain recognized 
     on an investment asset.--
       ``(i) In general.--To the extent provided in regulations 
     prescribed by the Secretary, if compensation is determined 
     solely by reference to the amount of gain recognized on the 
     disposition of an investment asset, such compensation shall 
     be treated as subject to a substantial risk of forfeiture 
     until the date of such disposition.
       ``(ii) Investment asset.--For purposes of clause (i), the 
     term `investment asset' means any single asset (other than an 
     investment fund or similar entity)--

       ``(I) acquired directly by an investment fund or similar 
     entity,
       ``(II) with respect to which such entity does not (nor does 
     any person related to such entity) participate in the active 
     management of such asset (or if such asset is an interest in 
     an entity, in the active management of the activities of such 
     entity), and
       ``(III) substantially all of any gain on the disposition of 
     which (other than such deferred compensation) is allocated to 
     investors in such entity.

       ``(iii) Coordination with special rule.--Paragraph (3)(B) 
     shall not apply to any compensation to which clause (i) 
     applies.
       ``(2) Comprehensive foreign income tax.--The term 
     `comprehensive foreign income tax' means, with respect to any 
     foreign person, the income tax of a foreign country if--
       ``(A) such person is eligible for the benefits of a 
     comprehensive income tax treaty between such foreign country 
     and the United States, or
       ``(B) such person demonstrates to the satisfaction of the 
     Secretary that such foreign country has a comprehensive 
     income tax.
       ``(3) Nonqualified deferred compensation plan.--
       ``(A) In general.--The term `nonqualified deferred 
     compensation plan' has the meaning given such term under 
     section 409A(d), except that such term shall include any plan 
     that provides a right to compensation based on the 
     appreciation in value of a specified number of equity units 
     of the service recipient.
       ``(B) Exception.--Compensation shall not be treated as 
     deferred for purposes of this section if the service provider 
     receives payment of such compensation not later than 12 
     months after the end of the taxable year of the service 
     recipient during which the right to the payment of such 
     compensation is no longer subject to a substantial risk of 
     forfeiture.
       ``(4) Exception for certain compensation with respect to 
     effectively connected income.--In the case a foreign 
     corporation with income which is taxable under section 882, 
     this section shall not apply to compensation which, had such 
     compensation had been paid in cash on the date that such 
     compensation ceased to be subject to a substantial risk of 
     forfeiture, would have been deductible by such foreign 
     corporation against such income.
       ``(5) Application of rules.--Rules similar to the rules of 
     paragraphs (5) and (6) of section 409A(d) shall apply.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations 
     disregarding a substantial risk of forfeiture in cases where 
     necessary to carry out the purposes of this section.''.
       (b) Conforming Amendment.--Section 26(b)(2), as amended by 
     the Housing Assistance Tax Act of 2008, is amended by 
     striking ``and'' at the end of subparagraph (V), by striking 
     the period at the end of subparagraph (W) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(X) section 457A(c)(1)(B) (relating to determinability of 
     amounts of compensation).''.
       (c) Clerical Amendment.--The table of sections of subpart B 
     of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 457 the 
     following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
              indifferent parties.''.

       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to amounts deferred which are attributable to services 
     performed after December 31, 2008.
       (2) Application to existing deferrals.--In the case of any 
     amount deferred to which the amendments made by this section 
     do not apply solely by reason of the fact that the amount is 
     attributable to services performed before January 1, 2009, to 
     the extent such amount is not includible in gross income in a 
     taxable year beginning before 2018, such amounts shall be 
     includible in gross income in the later of--

[[Page 23711]]

       (A) the last taxable year beginning before 2018, or
       (B) the taxable year in which there is no substantial risk 
     of forfeiture of the rights to such compensation (determined 
     in the same manner as determined for purposes of section 457A 
     of the Internal Revenue Code of 1986, as added by this 
     section).
       (3) Accelerated payments.--No later than 120 days after the 
     date of the enactment of this Act, the Secretary shall issue 
     guidance providing a limited period of time during which a 
     nonqualified deferred compensation arrangement attributable 
     to services performed on or before December 31, 2008, may, 
     without violating the requirements of section 409A(a) of the 
     Internal Revenue Code of 1986, be amended to conform the date 
     of distribution to the date the amounts are required to be 
     included in income.
       (4) Certain back-to-back arrangements.--If the taxpayer is 
     also a service recipient and maintains one or more 
     nonqualified deferred compensation arrangements for its 
     service providers under which any amount is attributable to 
     services performed on or before December 31, 2008, the 
     guidance issued under paragraph (4) shall permit such 
     arrangements to be amended to conform the dates of 
     distribution under such arrangement to the date amounts are 
     required to be included in the income of such taxpayer under 
     this subsection.
       (5) Accelerated payment not treated as material 
     modification.--Any amendment to a nonqualified deferred 
     compensation arrangement made pursuant to paragraph (4) or 
     (5) shall not be treated as a material modification of the 
     arrangement for purposes of section 409A of the Internal 
     Revenue Code of 1986.
                                 ______
                                 
  SA 5686. Mr. DODD proposed an amendment to the bill H.R. 1424, of 
1974, section 2705 of the Public Health Service Act, section 9812 of 
the Internal Revenue Code of 1986 to require equity in the provision of 
mental health and substance-related disorder benefits under group 
health plans, to prohibit discrimination on the basis of genetic 
information with respect to health insurance and employment, and for 
other purposes; as follows:

       Amend the title so as to read:
       ``To provide authority for the Federal Government to 
     purchase and insure certain types of troubled assets for the 
     purposes of providing stability to and preventing disruption 
     in the economy and financial system and protecting taxpayers, 
     to amend the Internal Revenue Code of 1986 to provide 
     incentives for energy production and conservation, to extend 
     certain expiring provisions, to provide individual income tax 
     relief, and for other purposes''.
                                 ______
                                 
  SA 5687. Mr. SANDERS proposed an amendment to amendment SA 5685 
proposed by Mr. Dodd to the bill H.R. 1424, of 1974, section 2705 of 
the Public Health Service Act, section 9812 of the Internal Revenue 
Code of 1986 to require equity in the provision of mental health and 
substance-related disorder benefits under group health plans, to 
prohibit discrimination on the basis of genetic information with 
respect to health insurance and employment, and for other purposes; as 
follows:

       At the end add the following:

     SEC. 304. SURTAX ON HIGH INCOME EARNERS.

       (a) In General.--Part I of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     section 1 the following new section:

     ``SEC. 1A. INCREASE IN TAX ON HIGH INCOME INDIVIDUALS.

       ``(a) General Rule.--In the case of a taxpayer other than a 
     corporation, there is hereby imposed (in addition to any 
     other tax imposed by this subtitle) a tax equal to 10 percent 
     of so much of modified adjusted gross income as exceeds 
     $500,000 ($1,000,000 in the case of a joint return or a 
     surviving spouse (as defined in section 2(a)).
       ``(b) Modified Adjusted Gross Income.--For purposes of this 
     section, the term `modified adjusted gross income' means 
     adjusted gross income reduced by any deduction allowed for 
     investment interest (as defined in section 163(d)). In the 
     case of an estate or trust, a rule similar to the rule of 
     section 67(e) shall apply for purposes of determining 
     adjusted gross income for purposes of this section.
       ``(c) Nonresident Alien.--In the case of a nonresident 
     alien individual, only amounts taken into account in 
     connection with the tax imposed by section 871(b) shall be 
     taken into account under this section.
       ``(d) Marital Status.--For purposes of this section, 
     marital status shall be determined under section 7703.
       ``(e) Not Treated as Tax Imposed by This Chapter for 
     Certain Purposes.--The tax imposed under this section shall 
     not be treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit under this chapter or 
     for purposes of section 55.
       ``(f) Termination.--This section shall not apply to taxable 
     years beginning after the date which is 5 years after the 
     date of the enactment of this section.''.
       (b) Clerical Amendment.--The table of sections for part I 
     of subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 1 the following new item:

``Sec. 1A. Increase in tax on high income individuals.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
       (d) Section 15 Not to Apply.--The amendment made by 
     subsection (a) shall not be treated as a change in a rate of 
     tax for purposes of section 15 of the Internal Revenue Code 
     of 1986.
                                 ______
                                 
  SA 5688. Mr. DURBIN proposed an amendment to the bill S. 1703, to 
prevent and reduce trafficking in persons; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Trafficking in Persons 
     Accountability Act of 2008''.

     SEC. 2. JURISDICTION IN CERTAIN TRAFFICKING OFFENSES.

       (a) In General.--Chapter 77 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1596. Additional jurisdiction in certain trafficking 
       offenses

       ``(a) In General.--In addition to any domestic or extra-
     territorial jurisdiction otherwise provided by law, the 
     courts of the United States have extra-territorial 
     jurisdiction over any offense (or any attempt or conspiracy 
     to commit an offense) under section 1581, section 1583, 
     section 1584, section 1589, section 1590, or section 1591 of 
     this title if--
       ``(1) an alleged offender is a national of the United 
     States or an alien lawfully admitted for permanent residence 
     (as those terms are defined in section 101 of the Immigration 
     and Nationality Act (8 U.S.C. 1101)); or
       ``(2) an alleged offender is present in the United States, 
     irrespective of the nationality of the alleged offender.
       ``(b) Limitation on Prosecutions of Offenses Prosecuted in 
     Other Countries.--No prosecution may be commenced against a 
     person under this section if a foreign government, in 
     accordance with jurisdiction recognized by the United States, 
     has prosecuted or is prosecuting such person for the conduct 
     constituting such offense, except upon the approval of the 
     Attorney General or the Deputy Attorney General (or a person 
     acting in either such capacity), which function of approval 
     may not be delegated.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 77 of title 18, United States Code, is 
     amended by adding at the end the following:

``1596. Additional jurisdiction in certain trafficking offenses.''.
                                 ______
                                 
  SA 5689. Mr. DURBIN (for Ms. Collins) proposed an amendment to the 
bill S. 3013, to provide for retirement equity for Federal employees in 
nonforeign areas outside the 48 contiguous States and the District of 
Columbia, and for other purposes; as follows:

       On page 7, line 8, strike ``9'' and insert ``8''.
       On page 10, line 12, strike ``the'' and insert ``this''.
       On page 17, line 18, strike ``or 8''.
       On page 21, line 1, strike all through page 22, line 17.
       On page 22, line 18, strike ``SEC. 9'' and insert ``SEC. 
     8''.
       On page 23, line 20, strike ``SEC. 10'' and insert ``SEC. 
     9''.
                                 ______
                                 
  SA 5690. Mr. DURBIN (for Mr. Cornyn (for himself and Mrs. Feinstein)) 
proposed an amendment to the bill S. 3073, to amend the Uniformed and 
Overseas Citizens Absentee Voting Act to improve procedures for the 
collection and delivery of absentee ballots of absent overseas 
uniformed services voters, and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. PROCEDURES FOR COLLECTION AND DELIVERY OF MARKED 
                   ABSENTEE BALLOTS OF ABSENT OVERSEAS UNIFORMED 
                   SERVICES VOTERS.

       (a) Procedures.--
       (1) In general.--The Uniformed and Overseas Citizens 
     Absentee Voting Act (42 U.S.C. 1973ff et seq.) is amended by 
     inserting after section 103 the following new section:

     ``SEC. 103A. PROCEDURES FOR COLLECTION AND DELIVERY OF MARKED 
                   ABSENTEE BALLOTS OF ABSENT OVERSEAS UNIFORMED 
                   SERVICES VOTERS.

       ``(a) Collection.--The Presidential designee shall 
     establish procedures for collecting marked absentee ballots 
     of absent overseas uniformed services voters in regularly 
     scheduled general elections for Federal office, including 
     absentee ballots prepared by States and Federal write-in 
     absentee ballots prescribed under section 103, and for 
     delivering the ballots to the appropriate election officials.

[[Page 23712]]

       ``(b) Ensuring Delivery Prior to Closing of Polls.--
       ``(1) In general.--Under the procedures established under 
     this section, the Presidential designee shall ensure that any 
     marked absentee ballot for a regularly scheduled general 
     election for Federal office which is collected prior to the 
     deadline described in paragraph (3) is delivered to the 
     appropriate election official in a State prior to the time 
     established by the State for the closing of the polls on the 
     date of the election.
       ``(2) Contract with express mail providers.--
       ``(A) In general.--The Presidential designee shall carry 
     out this section by contract with one or more providers of 
     express mail services.
       ``(B) Special rule for voters in jurisdictions using post 
     office boxes for collection of marked absentee ballots.--In 
     the case of an absent uniformed services voter who wishes to 
     use the procedures established under this section and whose 
     marked absentee ballot is required by the appropriate 
     election official to be delivered to a post office box, the 
     Presidential designee shall enter into an agreement with the 
     United States Postal Service for the delivery of the ballot 
     to the election official under the procedures established 
     under this section.
       ``(3) Deadline described.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the deadline described in this paragraph is noon (in the 
     location in which the ballot is collected) on the last 
     Tuesday that precedes the date of the election.
       ``(B) Authority to establish alternative deadline for 
     certain locations.--If the Presidential designee determines 
     that the deadline described in subparagraph (A) is not 
     sufficient to ensure timely delivery of the ballot under 
     paragraph (1) with respect to a particular location because 
     of remoteness or other factors, the Presidential designee may 
     establish as an alternative deadline for that location the 
     latest date occurring prior to the deadline described in 
     subparagraph (A) which is sufficient to ensure timely 
     delivery of the ballot under paragraph (1).
       ``(4) Prohibition on refusal by states to accept marked 
     absentee ballots not delivered by postal service or in 
     person.--A State may not refuse to accept or process any 
     marked absentee ballot delivered under the procedures 
     established under this section on the grounds that the ballot 
     is received by the State other than through delivery by the 
     United States Postal Service.
       ``(c) Tracking Mechanism.--Under the procedures established 
     under this section, the entity responsible for delivering 
     marked absentee ballots to the appropriate election officials 
     shall implement procedures to enable any individual whose 
     ballot for a regularly scheduled general election for Federal 
     office is collected by the Presidential designee to determine 
     whether the ballot has been delivered to the appropriate 
     election official, using the Internet, an automated telephone 
     system, or such other methods as the entity may provide.
       ``(d) Absent Overseas Uniformed Services Voter Defined.--In 
     this section, the term `absent overseas uniformed services 
     voter' means an overseas voter described in section 
     107(5)(A).
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Presidential designee 
     such sums as may be necessary to carry out this section.''.
       (2) Effective date.--Section 103A of the Uniformed and 
     Overseas Citizens Absentee Voting Act, as added by this 
     subsection, shall apply with respect to each regularly 
     scheduled general election for Federal office held on or 
     after November 1, 2010.
       (b) Conforming Amendments.--
       (1) Federal responsibilities.--Section 101(b) of such Act 
     (42 U.S.C. 1973ff(b)) is amended--
       (A) by striking ``and'' at the end of paragraph (6);
       (B) by striking the period at the end of paragraph (7) and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(8) carry out section 103A with respect to the collection 
     and delivery of marked absentee ballots of absent overseas 
     uniformed services voters in elections for Federal office.''.
       (2) State responsibilities.--Section 102(a) of such Act (42 
     U.S.C. 1973ff--1(a)) is amended--
       (A) by striking ``and'' at the end of paragraph (4);
       (B) by striking the period at the end of paragraph (5) and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(6) carry out section 103A(b)(2) with respect to the 
     processing and acceptance of marked absentee ballots of 
     absent overseas uniformed services voters.''.
       (c) Outreach for Absent Overseas Uniformed Services Voters 
     on Procedures.--The Presidential designee shall take 
     appropriate actions to inform individuals who are anticipated 
     to be absent overseas uniformed services voters in the 
     regularly scheduled general election for Federal office held 
     in November 2008 of the procedures for the collection and 
     delivery of marked absentee ballots established pursuant to 
     section 103A of the Uniformed and Overseas Citizens Absentee 
     Voting Act, as added by subsection (a), including the manner 
     in which such voters may utilize such procedures for the 
     submittal of marked absentee ballots in regularly scheduled 
     elections for Federal office.
       (d) Reports on Utilization of Procedures.--
       (1) Reports required.--Not later than 180 days after each 
     regularly scheduled general election for Federal office held 
     after January 1, 2008, the Presidential designee shall submit 
     to the congressional defense committees a report on the 
     utilization of the procedures for the collection and delivery 
     of marked absentee ballots established pursuant to section 
     103A of the Uniformed and Overseas Citizens Absentee Voting 
     Act, as so added, during such general election.
       (2) Elements.--Each report under paragraph (1) shall 
     include, for the general election covered by such report, a 
     description of the utilization of the procedures described in 
     that paragraph during such general election, including the 
     number of marked absentee ballots collected and delivered 
     under such procedures.
       (e) Report on Status of Implementation.--
       (1) Report required.--Not later than one year after the 
     date of the enactment of this Act, the Presidential designee 
     shall submit to the congressional defense committees a report 
     on the status of the implementation of the program for the 
     collection and delivery of marked absentee ballots 
     established pursuant to section 103A of the Uniformed and 
     Overseas Citizens Absentee Voting Act, as added by subsection 
     (a).
       (2) Elements.--The report under paragraph (1) shall include 
     a status of the implementation of the program and a detailed 
     description of the specific steps taken towards its 
     implementation for November 2009 and November 2010.
       (f) Definitions.--In this section:
       (1) The term ``absent overseas uniformed services voter'' 
     has the meaning given that term in section 103A(d) of the 
     Uniformed and Overseas Citizens Absentee Voting Act, as added 
     by subsection (a).
       (2) The term ``Presidential designee'' means the official 
     designated under section 101(a) of the Uniformed and Overseas 
     Citizens Absentee Voting Act (42 U.S.C. 1973ff(a)).
       (3) The term ``congressional defense committees'' means--
       (A) the Committee on Armed Services and the Committee on 
     Appropriations of the Senate; and
       (B) the Committee on Armed Services and the Committee on 
     Appropriations of the House of Representatives.

     SEC. 2. PROHIBITION ON REFUSAL TO ACCEPT VOTER REGISTRATION 
                   AND ABSENTEE BALLOT APPLICATIONS AND FEDERAL 
                   WRITE-IN ABSENTEE BALLOTS FOR FAILURE TO MEET 
                   NONESSENTIAL REQUIREMENTS.

       (a) Voter Registration and Absentee Ballot Applications.--
       (1) Prohibiting refusal to accept applications for failure 
     to meet nonessential requirements.--Section 102 of the 
     Uniformed and Overseas Citizens Absentee Voting Act (42 
     U.S.C. 1973ff-1) is amended by adding at the end the 
     following new subsection:
       ``(e) Prohibiting Refusal To Accept Applications for 
     Failure To Meet Nonessential Requirements.--A State shall 
     accept and process any otherwise valid voter registration 
     application or absentee ballot application (including the 
     official post card form prescribed under section 101) 
     submitted in any manner by an absent uniformed services voter 
     or overseas voter that contains the information required on 
     the official post card form prescribed under section 101 
     (other than information which the Presidential designee, in 
     consultation with the Election Assistance Commission and the 
     Election Assistance Commission Board of Advisors under 
     section 214 of the Help America Vote Act of 2002 (42 U.S.C. 
     15344), determines, under regulations promulgated by the 
     Presidential designee, is not clearly necessary to prevent 
     fraud in the conduct of elections).''.
       (2) Effective date.--Subsection (e) of section 102 of the 
     Uniformed and Overseas Citizens Absentee Voting Act, as added 
     by this subsection, shall apply with respect to each 
     regularly scheduled general election for Federal office held 
     on or after November 1, 2010.
       (b) Federal Write-in Absentee Ballot.--
       (1) Prohibiting refusal to accept ballot for failure to 
     meet nonessential requirements.--Section 103 of such Act (42 
     U.S.C. 1973ff-2) is amended--
       (A) by redesignating subsection (f) as subsection (g); and
       (B) by inserting after subsection (e) the following new 
     subsection:
       ``(f) Prohibiting Refusal To Accept Ballot for Failure To 
     Meet Nonessential Requirements.--A State shall accept and 
     process any otherwise valid Federal write-in absentee ballot 
     submitted in any manner by an absent uniformed services voter 
     or overseas voter that contains the information required to 
     be submitted with such ballot by the Presidential designee 
     (other than information which the Presidential designee, in 
     consultation with the Election Assistance Commission and the 
     Election Assistance Commission Board of Advisors under 
     section 214 of the Help America Vote Act of 2002 (42 U.S.C.

[[Page 23713]]

     15344), determines, under regulations promulgated by the 
     Presidential designee, is not clearly necessary to prevent 
     fraud in the conduct of elections).''.
       (2) Effective date.--Subsection (f) of section 102 of the 
     Uniformed and Overseas Citizens Absentee Voting Act, as 
     amended by this subsection, shall apply with respect to each 
     regularly scheduled general election for Federal office held 
     on or after November 1, 2010.
                                 ______
                                 
  SA 5691. Ms. CANTWELL submitted an amendment intended to be proposed 
by her to the bill H.R. 1424, of 1974, section 2705 of the Public 
Health Service Act, section 9812 of the Internal Revenue Code of 1986 
to require equity in the provision of mental health and substance-
related disorder benefits under group health plans, to prohibit 
discrimination on the basis of genetic information with respect to 
health insurance and employment, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the end of title I in division A, add the following:

     SEC. 137. EQUITY AUTHORITY.

       (a) In General.--If the Secretary establishes a program 
     under this division, the Secretary shall use not less than 
     $350,000,000,000 of the purchase authority provided under 
     section 101 for the purchase of nonvoting preferred stock 
     meeting the criteria in subsection (b).
       (b) Eligible Financial Institutions.--The authority under 
     this section may be exercised only with respect to financial 
     institutions that--
       (1) are deemed by the appropriate regulatory authorities to 
     be adequately capitalized, in relation to their current 
     balance sheets;
       (2) raises such additional capital from private sources or 
     from the Secretary under this Act as is determined sufficient 
     by the appropriate regulatory authority for such financial 
     institution; and
       (3) is not deemed to be insolvent by the appropriate 
     regulatory authority.
       (c) Equity Criteria.--Nonvoting preferred stock authorized 
     for purchase under this section shall--
       (1) have a low-interest-rate coupon (not to exceed 5 
     percent), with warrants attached;
       (2) provide that shareholders will have rights to invest on 
     terms that are equivalent to those of the Secretary, and such 
     rights shall be tradeable;
       (3) set terms to give such rights a positive value; and
       (4) give private investors preference over the Secretary in 
     the allocation of the new issues.
       (d) Limits.--Financial institutions recapitalized in 
     accordance with this section shall be permitted to increase 
     their leverage until such time as the economy recovers 
     subject to limitations established by the Board when such 
     conditions return to normal.

                          ____________________