[Congressional Record (Bound Edition), Volume 154 (2008), Part 8]
[Senate]
[Pages 11793-11798]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. McCONNELL (for himself, Mr. Kyl, Mr. Grassley, Mr. Hatch, 
        and Mr. Roberts):
  S. 3098. A bill to amend the Internal Revenue Code of 1986 to extend 
certain expiring provisions, and for other purposes; read the first 
time.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3098

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

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

       (a) Short Title.--This Act may be cited as the 
     ``Alternative Minimum Tax and Extenders Tax Relief Act of 
     2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     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.

                  TITLE II--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. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 205. Treatment of certain dividends of regulated investment 
              companies.
Sec. 206. Stock in RIC for purposes of determining estates of 
              nonresidents not citizens.
Sec. 207. Qualified investment entities.

                   TITLE III--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.
Sec. 306. Enhanced charitable deduction for contributions of food 
              inventory.
Sec. 307. Extension of enhanced charitable deduction for contributions 
              of book inventory.
Sec. 308. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 309. Basis adjustment to stock of S corporations making charitable 
              contributions of property.
Sec. 310. Increase in limit on cover over of rum excise tax to Puerto 
              Rico and the Virgin Islands.
Sec. 311. Extension of economic development credit for American Samoa.
Sec. 312. Extension of mine rescue team training credit.
Sec. 313. Extension of election to expense advanced mine safety 
              equipment.
Sec. 314. Extension of expensing rules for qualified film and 
              television productions.
Sec. 315. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 316. Extension of qualified zone academy bonds.
Sec. 317. Indian employment credit.
Sec. 318. Accelerated depreciation for business property on Indian 
              reservation.
Sec. 319. Railroad track maintenance.
Sec. 320. Seven-year cost recovery period for motorsports racing track 
              facility.
Sec. 321. Expensing of environmental remediation costs.
Sec. 322. Extension of work opportunity tax credit for Hurricane 
              Katrina employees.

       TITLE IV--EXTENSION OF CLEAN ENERGY PRODUCTION INCENTIVES

Sec. 401. Extension and modification of renewable energy production tax 
              credit.
Sec. 402. Extension and modification of solar energy and fuel cell 
              investment tax credit.
Sec. 403. Extension and modification of residential energy efficient 
              property credit.
Sec. 404. Extension and modification of credit for clean renewable 
              energy bonds.
Sec. 405. Extension of special rule to implement FERC restructuring 
              policy.

     TITLE V--EXTENSION OF INCENTIVES TO IMPROVE ENERGY EFFICIENCY

Sec. 501. Extension and modification of credit for energy efficiency 
              improvements to existing homes.
Sec. 502. Extension and modification of tax credit for energy efficient 
              new homes.
Sec. 503. Extension and modification of energy efficient commercial 
              buildings deduction.
Sec. 504. Modification and extension of energy efficient appliance 
              credit for appliances produced after 2007.

    TITLE VI--EXTENSION OF ALTERNATIVE FUELS AND MARGINAL PRODUCTION

Sec. 601. Percentage depletion for marginal well production.
Sec. 602. Credits for biodiesel and renewable diesel.
Sec. 603. Credit for alternative fuels.

                     TITLE VII--TAX ADMINISTRATION

Sec. 701. Permanent authority for undercover operations.
Sec. 702. Permanent disclosures of certain tax return information.
Sec. 703. Disclosure of information relating to terrorist activities.

                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.

[[Page 11794]]



                  TITLE II--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. 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. 205. 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. 206. 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. 207. 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--BUSINESS TAX PROVISIONS

     SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.

       (a) Extension.--Section 41(h) (relating to termination) is 
     amended--
       (1) by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009'' in paragraph (1)(B),
       (2) by redesignating paragraph (2) as paragraph (3), and
       (3) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Termination of alternative incremental credit.--No 
     election under subsection (c)(4) shall apply to amounts paid 
     or incurred after December 31, 2007.''.
       (b) Modification of Alternative Simplified Credit.--
     Paragraph (5)(A) of section 41(c) (relating to election of 
     alternative simplified credit) is amended to read as follows:
       ``(A) In general.--
       ``(i) Calculation of credit.--At the election of the 
     taxpayer, the credit determined under subsection (a)(1) shall 
     be equal to the applicable percentage (as defined in clause 
     (ii)) of so much of the qualified research expenses for the 
     taxable year as exceeds 50 percent of the average qualified 
     research expenses for the 3 taxable years preceding the 
     taxable year for which the credit is being determined.
       ``(ii) Applicable percentage.--For purposes of the 
     calculation under clause (i), the applicable percentage is--

       ``(I) 14 percent, in the case of taxable years ending 
     before January 1, 2009, and
       ``(II) 16 percent, in the case of taxable years beginning 
     after December 31, 2008.''.

       (c) Conforming Amendment.--Subparagraph (D) of section 
     45C(b)(1) (relating to special rule) is amended by striking 
     ``December 31, 2007'' and inserting ``December 31, 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.--The amendments made by this section 
     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 (B) 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.

       (a) 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''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 306. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) 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''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 307. 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. 308. 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. 309. 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. 310. 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. 311. 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--

[[Page 11795]]

       (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. 312. 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. 313. 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. 314. 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''.

     SEC. 315. 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. 316. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``and 2007'' and inserting ``2007, 2008, 
     and 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 317. 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. 318. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATION.

       (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. 319. 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) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred during taxable 
     years beginning after December 31, 2007.

     SEC. 320. 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 to read as follows:
       ``(D) Application of paragraph.--Such term shall apply to 
     property placed in service after the date of the enactment of 
     the Alternative Minimum Tax and Extenders Tax Relief Act of 
     2008 and before January 1, 2010.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 321. 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. 322. 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.

       TITLE IV--EXTENSION OF CLEAN ENERGY PRODUCTION INCENTIVES

     SEC. 401. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY 
                   PRODUCTION TAX CREDIT.

       (a) Extension of Credit.--Each of the following provisions 
     of section 45(d) (relating to qualified facilities) is 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010'':
       (1) Paragraph (1).
       (2) Clauses (i) and (ii) of paragraph (2)(A).
       (3) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (4) Paragraph (4).
       (5) Paragraph (5).
       (6) Paragraph (6).
       (7) Paragraph (7).
       (8) Paragraph (8).
       (9) Subparagraphs (A) and (B) of paragraph (9).
       (b) Production Credit for Electricity Produced From Marine 
     Renewables.--
       (1) In general.--Paragraph (1) of section 45(c) (relating 
     to resources) 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.''.
       (2) 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.''.
       (3) 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, 
     2010.''.
       (4) Credit rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (5) Coordination with small irrigation power.--Paragraph 
     (5) of section 45(d), as amended by subsection (a), is 
     amended by striking ``January 1, 2010'' and inserting ``the 
     date of the enactment of paragraph (11)''.
       (c) Sales of Electricity to Regulated Public Utilities 
     Treated as Sales to Unrelated Persons.--Section 45(e)(4) 
     (relating to related persons) is amended by adding at the end 
     the following new sentence: ``A taxpayer shall be treated as 
     selling electricity to an unrelated person if such 
     electricity is sold to a regulated public utility (as defined 
     in section 7701(a)(33).''.
       (d) 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''.
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to property originally placed in service after December 
     31, 2008.
       (2) Modifications.--The amendments made by subsections (b) 
     and (c) shall apply to electricity produced and sold after 
     the date of the enactment of this Act, in taxable years 
     ending after such date.
       (3) Trash facility clarification.--The amendments made by 
     subsection (d) shall apply to electricity produced and sold 
     before, on, or after December 31, 2007.

     SEC. 402. EXTENSION AND MODIFICATION OF SOLAR ENERGY AND FUEL 
                   CELL INVESTMENT TAX CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2016''.
       (3) Qualified microturbine property.--Subparagraph (E) of 
     section 48(c)(2) (relating to qualified microturbine 
     property) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2016''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
     specified credits) 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) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48.''.
       (c) Repeal of Dollar Per Kilowatt Limitation for Fuel Cell 
     Property.--

[[Page 11796]]

       (1) In general.--Section 48(c)(1) (relating to qualified 
     fuel cell), as amended by subsection (a)(2), is amended by 
     striking subparagraph (B) and by redesignating subparagraphs 
     (C), (D), and (E) as subparagraphs (B), (C), and (D), 
     respectively.
       (2) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B) of subsection (c)'' 
     and inserting ``subsection (c)(2)(B)''.
       (d) Public Electric 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), as amended by this 
     section, is amended by striking subparagraph (C) and 
     redesignating subparagraph (D) as subparagraph (C).
       (B) Paragraph (2) of section 48(c), as amended by 
     subsection (a)(3), is amended by striking subparagraph (D) 
     and redesignating subparagraph (E) as subparagraph (D).
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) 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) Fuel cell property and public electric utility 
     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).

     SEC. 403. EXTENSION AND MODIFICATION OF RESIDENTIAL ENERGY 
                   EFFICIENT PROPERTY CREDIT.

       (a) Extension.--Section 25D(g) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) No Dollar Limitation for Credit for Solar Electric 
     Property.--
       (1) In general.--Section 25D(b)(1) (relating to maximum 
     credit) is amended by striking subparagraph (A) and by 
     redesignating subparagraphs (B) and (C) as subparagraphs (A) 
     and (B), respectively.
       (2) Conforming amendments.--Section 25D(e)(4) is amended--
       (A) by striking clause (i) in subparagraph (A),
       (B) by redesignating clauses (ii) and (iii) in subparagraph 
     (A) as clauses (i) and (ii), respectively, and
       (C) by striking ``, (2),'' in subparagraph (C).
       (c) 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''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2007.
       (2) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (c)(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. 404. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN 
                   RENEWABLE ENERGY BONDS.

       (a) Extension.--Section 54(m) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Increase in National Limitation.--Section 54(f) 
     (relating to limitation on amount of bonds designated) is 
     amended--
       (1) by inserting ``, and for the period beginning after the 
     date of the enactment of the Clean Energy Tax Stimulus Act of 
     2008 and ending before January 1, 2010, $400,000,000'' after 
     ``$1,200,000,000'' in paragraph (1),
       (2) by striking ``$750,000,000 of the'' in paragraph (2) 
     and inserting ``$750,000,000 of the $1,200,000,000'', and
       (3) by striking ``bodies'' in paragraph (2) and inserting 
     ``bodies, and except that the Secretary may not allocate more 
     than \1/3\ of the $400,000,000 national clean renewable 
     energy bond limitation to finance qualified projects of 
     qualified borrowers which are public power providers nor more 
     than \1/3\ of such limitation to finance qualified projects 
     of qualified borrowers which are mutual or cooperative 
     electric companies described in section 501(c)(12) or section 
     1381(a)(2)(C)''.
       (c) Public Power Providers Defined.--Section 54(j) is 
     amended--
       (1) by adding at the end the following new paragraph:
       ``(6) 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).'', and
       (2) by inserting ``; Public Power Provider'' before the 
     period at the end of the heading.
       (d) Technical Amendment.--The third sentence of section 
     54(e)(2) is amended by striking ``subsection (l)(6)'' and 
     inserting ``subsection (l)(5)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 405. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC 
                   RESTRUCTURING POLICY.

       (a) Qualifying Electric Transmission Transaction.--
       (1) In general.--Section 451(i)(3) (defining qualifying 
     electric transmission transaction) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to transactions after December 31, 2007.
       (b) Independent Transmission Company.--
       (1) In general.--Section 451(i)(4)(B)(ii) (defining 
     independent transmission company) is amended by striking 
     ``December 31, 2007'' and inserting ``the date which is 2 
     years after the date of such transaction''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the amendments made by 
     section 909 of the American Jobs Creation Act of 2004.

     TITLE V--EXTENSION OF INCENTIVES TO IMPROVE ENERGY EFFICIENCY

     SEC. 501. EXTENSION AND MODIFICATION OF CREDIT FOR ENERGY 
                   EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``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) (relating to residential 
     energy property expenditures) 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) Modifications of Standards for Energy-Efficient 
     Building Property.--
       (1) Electric heat pumps.--Subparagraph (B) of section 
     25C(d)(3) is amended to read as follows:
       ``(A) an electric heat pump which achieves the highest 
     efficiency tier established by the Consortium for Energy 
     Efficiency, as in effect on January 1, 2008.''.
       (2) Central air conditioners.--Section 25C(d)(3)(D) is 
     amended by striking ``2006'' and inserting ``2008''.
       (3) Water heaters.--Subparagraph (E) of section 25C(d) is 
     amended to read as follows:

[[Page 11797]]

       ``(E) a natural gas, propane, or oil water heater which has 
     either an energy factor of at least 0.80 or a thermal 
     efficiency of at least 90 percent.''.
       (4) Oil furnaces and hot water boilers.--Paragraph (4) of 
     section 25C(d) is amended to read as follows:
       ``(4) Qualified natural gas, propane, and oil furnaces and 
     hot water boilers.--
       ``(A) Qualified natural gas furnace.--The term `qualified 
     natural gas furnace' means any natural gas furnace which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 95.
       ``(B) Qualified natural gas hot water boiler.--The term 
     `qualified natural gas hot water boiler' means any natural 
     gas hot water boiler which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(C) Qualified propane furnace.--The term `qualified 
     propane furnace' means any propane furnace which achieves an 
     annual fuel utilization efficiency rate of not less than 95.
       ``(D) Qualified propane hot water boiler.--The term 
     `qualified propane hot water boiler' means any propane hot 
     water boiler which achieves an annual fuel utilization 
     efficiency rate of not less than 90.
       ``(E) Qualified oil furnaces.--The term `qualified oil 
     furnace' means any oil furnace which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(F) Qualified oil hot water boiler.--The term `qualified 
     oil hot water boiler' means any oil hot water boiler which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 90.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 502. EXTENSION AND MODIFICATION OF TAX CREDIT FOR ENERGY 
                   EFFICIENT NEW HOMES.

       (a) Extension of Credit.--Subsection (g) of section 45L 
     (relating to termination) is amended by striking ``December 
     31, 2008'' and inserting ``December 31, 2010''.
       (b) Allowance for Contractor's Personal Residence.--
     Subparagraph (B) of section 45L(a)(1) is amended to read as 
     follows:
       ``(B)(i) acquired by a person from such eligible contractor 
     and used by any person as a residence during the taxable 
     year, or
       ``(ii) used by such eligible contractor as a residence 
     during the taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to homes acquired after December 31, 2008.

     SEC. 503. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT 
                   COMMERCIAL BUILDINGS DEDUCTION.

       (a) Extension.--Section 179D(h) (relating to termination) 
     is amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Adjustment of Maximum Deduction Amount.--
       (1) In general.--Subparagraph (A) of section 179D(b)(1) 
     (relating to maximum amount of deduction) is amended by 
     striking ``$1.80'' and inserting ``$2.25''.
       (2) Partial allowance.--Paragraph (1) of section 179D(d) is 
     amended--
       (A) by striking ``$.60'' and inserting ``$0.75'', and
       (B) by striking ``$1.80'' and inserting ``$2.25''.
       (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. 504. MODIFICATION AND EXTENSION OF ENERGY EFFICIENT 
                   APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 
                   2007.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) 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 (relating to eligible production) is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'', and
       (C) by moving the text of such subsection in line with the 
     subsection heading and redesignating subparagraphs (A) and 
     (B) as paragraphs (1) and (2), respectively.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1) of this section, is 
     amended by striking ``3-calendar year'' and inserting ``2-
     calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) 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) 
     (relating to aggregate credit amount allowed) 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) (defining 
     qualified energy efficient appliance) 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) (defining clothes 
     washer) is amended by inserting ``commercial'' before 
     ``residential'' the second place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M (relating to definitions) 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) (relating to definitions), 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

[[Page 11798]]

     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.

    TITLE VI--EXTENSION OF ALTERNATIVE FUELS AND MARGINAL PRODUCTION

     SEC. 601. PERCENTAGE DEPLETION FOR MARGINAL WELL PRODUCTION.

       (a) In General.--Section 613A(c)(6)(H) (relating to 
     temporary suspension of taxable income limit with respect to 
     marginal production) 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. 602. 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) Effective Date.--The amendments made by this section 
     shall apply to fuel produced, and sold or used, after 
     December 31, 2008.

     SEC. 603. CREDIT FOR ALTERNATIVE FUELS.

       (a) In General.--Sections 6426(d)(4), 6426(e)(3), and 
     6427(e)(5)(C) are each amended by striking ``September 30, 
     2009'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to fuel produced, and sold or used, after 
     September 30, 2009.

                     TITLE VII--TAX ADMINISTRATION

     SEC. 701. 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. 702. PERMANENT DISCLOSURES OF CERTAIN TAX RETURN 
                   INFORMATION.

       (a) Disclosures To Facilitate Combined Employment Tax 
     Reporting.--
       (1) In general.--Section 6103(d)(5) (relating to disclosure 
     for combined employment tax reporting) is amended--
       (A) by striking ``reporting'' in the heading thereof and 
     all that follows through ``The Secretary'' in subparagraph 
     (A) and inserting ``reporting.--The Secretary'', and
       (B) by striking subparagraph (B).
       (2) Effective date.--The amendments made by this subsection 
     shall apply to disclosures after the date of the enactment of 
     this Act.
       (b) Disclosures Relating to Certain Programs Administered 
     by the Department of Veterans Affairs.--
       (1) In general.--Section 6103(l)(7)(D) (relating to 
     programs to which rule applies) is amended by striking the 
     last sentence.
       (2) Technical amendment.--Section 6103(l)(7)(D)(viii)(III) 
     is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2), 
     1710(b), and 1712(a)(2)(B)'' and inserting ``sections 
     1710(a)(2)(G), 1710(a)(3), and 1710(b)''.

     SEC. 703. DISCLOSURE OF INFORMATION RELATING TO TERRORIST 
                   ACTIVITIES.

       (a) Disclosure of Return Information To Apprise Appropriate 
     Officials of Terrorist Activities.--Clause (iv) of section 
     6103(i)(3)(C) (relating to termination) is amended by 
     striking ``December 31, 2007'' and inserting ``December 31, 
     2009''.
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities.--Subparagraph (E) of section 6103(i)(7) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

                          ____________________