[House Report 109-722]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-722

======================================================================
 
 RELATING TO CONSIDERATION OF H.R. 6111, TO AMEND THE INTERNAL REVENUE 
   CODE OF 1986 TO PROVIDE THAT THE TAX COURT MAY REVIEW CLAIMS FOR 
  EQUITABLE INNOCENT SPOUSE RELIEF AND TO SUSPEND THE RUNNING ON THE 
          PERIOD OF LIMITATIONS WHILE SUCH CLAIMS ARE PENDING

                                _______
                                

  December 7, 2006.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Gingrey, from the Committee on Rules, submitted the following

                              R E P O R T

                      [To accompany H. Res. 1099]

    The Committee on Rules, having had under consideration 
House Resolution 1099, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the disposition of the Senate 
amendment to the bill, H.R. 6111, to amend the Internal Revenue 
Code of 1986 to provide that the Tax Court may review claims 
for equitable innocent spouse relief and to suspend the running 
on the period of limitations while such claims are pending.
    The rule makes in order a motion by the chairman of the 
Committee on Ways and Means to concur in the Senate amendment 
with the amendment printed in this report. The rule waives all 
points of order against the motion. The rule provides one hour 
of debate on the motion equally divided and controlled by the 
chairman and ranking minority member of the Committee on Ways 
and Means.
    Finally, the rule provides one motion to amend, which shall 
be separately debatable for five minutes by the proponent and 
five minutes by an opponent.

                         EXPLANATION OF WAIVERS

    The Committee is not aware of any points of order against 
the motion. The waiver of all points of order against the 
motion is prophylactic in nature.

  SUMMARY OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO H.R. 6111 
                      MADE IN ORDER UNDER THE RULE

    Thomas (CA): The House amendment to H.R. 6111 adds the 
following:
           The complete text of H.R. 6408, the Tax 
        Relief and Health Care Act of 2006, which provides 
        extension and modification of certain tax relief 
        provisions through 2007, extension of certain expiring 
        energy provisions and other energy provisions, health 
        savings account (HSA) provisions, other tax relief 
        provisions and miscellaneous provisions (Division A, 
        Division B, Division C: Titles I and II, Title IV 
        Sections 401 through 405).
           Provisions with respect to White Pine 
        County, Nevada wilderness conservation, recreation and 
        development (Division C: Title III).
           Temporary duty reductions for certain cotton 
        shirting fabric and cotton trust fund provisions 
        (Division C: Title IV, Sections 406 and 407).
           A provision that allows Medicare 
        beneficiaries who are enrolled in traditional fee-for-
        service but not enrolled in a prescription drug plan to 
        enroll in a Medicare Advantage plan that does not offer 
        drug coverage after their enrollment period ended. 
        These beneficiaries would be allowed to make this 
        change once during the year, after their enrollment 
        period had ended. This amendment would sunset in two 
        years. (Division B: Title II, Section 206).
    The text of H.R. 6111 as passed by the House is retained in 
the House amendment to H.R. 6111 (Division C: Title IV, Section 
408).

 TEXT OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO H.R. 6111 MADE 
                        IN ORDER UNDER THE RULE

    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE, ETC.

  (a) Short Title.--This Act may be cited as the ``Tax Relief 
and Health Care Act of 2006''.
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

Sec. 1. Short title, etc.

 DIVISION A--EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS, 
                        AND OTHER TAX PROVISIONS

Sec. 100. Reference.

        TITLE I--EXTENSION AND MODIFICATION OF CERTAIN PROVISIONS

Sec. 101. Deduction for qualified tuition and related expenses.
Sec. 102. Extension and modification of new markets tax credit.
Sec. 103. Election to deduct State and local general sales taxes.
Sec. 104. Extension and modification of research credit.
Sec. 105. Work opportunity tax credit and welfare-to-work credit.
Sec. 106. Election to include combat pay as earned income for purposes 
          of earned income credit.
Sec. 107. Extension and modification of qualified zone academy bonds.
Sec. 108. Above-the-line deduction for certain expenses of elementary 
          and secondary school teachers.
Sec. 109. Extension and expansion of expensing of brownfields 
          remediation costs.
Sec. 110. Tax incentives for investment in the District of Columbia.
Sec. 111. Indian employment tax credit.
Sec. 112. Accelerated depreciation for business property on Indian 
          reservations.
Sec. 113. Fifteen-year straight-line cost recovery for qualified 
          leasehold improvements and qualified restaurant property.
Sec. 114. Cover over of tax on distilled spirits.
Sec. 115. Parity in application of certain limits to mental health 
          benefits.
Sec. 116. Corporate donations of scientific property used for research 
          and of computer technology and equipment.
Sec. 117. Availability of medical savings accounts.
Sec. 118. Taxable income limit on percentage depletion for oil and 
          natural gas produced from marginal properties.
Sec. 119. American Samoa economic development credit.
Sec. 120. Extension of bonus depreciation for certain qualified Gulf 
          Opportunity Zone property.
Sec. 121. Authority for undercover operations.
Sec. 122. Disclosures of certain tax return information.
Sec. 123. Special rule for elections under expired provisions.

                     TITLE II--ENERGY TAX PROVISIONS

Sec. 201. Credit for electricity produced from certain renewable 
          resources.
Sec. 202. Credit to holders of clean renewable energy bonds.
Sec. 203. Performance standards for sulfur dioxide removal in advanced 
          coal-based generation technology units designed to use 
          subbituminous coal.
Sec. 204. Deduction for energy efficient commercial buildings.
Sec. 205. Credit for new energy efficient homes.
Sec. 206. Credit for residential energy efficient property.
Sec. 207. Energy credit.
Sec. 208. Special rule for qualified methanol or ethanol fuel.
Sec. 209. Special depreciation allowance for cellulosic biomass ethanol 
          plant property.
Sec. 210. Expenditures permitted from the Leaking Underground Storage 
          Tank Trust Fund.
Sec. 211. Treatment of coke and coke gas.

                   TITLE III--HEALTH SAVINGS ACCOUNTS

Sec. 301. Short title.
Sec. 302. FSA and HRA terminations to fund HSAs.
Sec. 303. Repeal of annual deductible limitation on HSA contributions.
Sec. 304. Modification of cost-of-living adjustment.
Sec. 305. Contribution limitation not reduced for part-year coverage.
Sec. 306. Exception to requirement for employers to make comparable 
          health savings account contributions.
Sec. 307. One-time distribution from individual retirement plans to fund 
          HSAs.

                       TITLE IV--OTHER PROVISIONS

Sec. 401. Deduction allowable with respect to income attributable to 
          domestic production activities in Puerto Rico.
Sec. 402. Credit for prior year minimum tax liability made refundable 
          after period of years.
Sec. 403. Returns required in connection with certain options.
Sec. 404. Partial expensing for advanced mine safety equipment.
Sec. 405. Mine rescue team training tax credit.
Sec. 406. Whistleblower reforms.
Sec. 407. Frivolous tax submissions.
Sec. 408. Addition of meningococcal and human papillomavirus vaccines to 
          list of taxable vaccines.
Sec. 409. Clarification of taxation of certain settlement funds made 
          permanent.
Sec. 410. Modification of active business definition under section 355 
          made permanent.
Sec. 411. Revision of State veterans limit made permanent.
Sec. 412. Capital gains treatment for certain self-created musical works 
          made permanent.
Sec. 413. Reduction in minimum vessel tonnage which qualifies for 
          tonnage tax made permanent.
Sec. 414. Modification of special arbitrage rule for certain funds made 
          permanent.
Sec. 415. Great Lakes domestic shipping to not disqualify vessel from 
          tonnage tax.
Sec. 416. Use of qualified mortgage bonds to finance residences for 
          veterans without regard to first-time homebuyer requirement.
Sec. 417. Exclusion of gain from sale of a principal residence by 
          certain employees of the intelligence community.
Sec. 418. Sale of property by judicial officers.
Sec. 419. Premiums for mortgage insurance.
Sec. 420. Modification of refunds for kerosene used in aviation.
Sec. 421. Regional income tax agencies treated as States for purposes of 
          confidentiality and disclosure requirements.
Sec. 422. Designation of wines by semi-generic names.
Sec. 423. Modification of railroad track maintenance credit.
Sec. 424. Modification of excise tax on unrelated business taxable 
          income of charitable remainder trusts.
Sec. 425. Loans to qualified continuing care facilities made permanent.
Sec. 426. Technical corrections.

            DIVISION B--MEDICARE AND OTHER HEALTH PROVISIONS

Sec. 1. Short title of division.

        TITLE I--MEDICARE IMPROVED QUALITY AND PROVIDER PAYMENTS

Sec. 101. Physician payment and quality improvement.
Sec. 102. Extension of floor on Medicare work geographic adjustment.
Sec. 103. Update to the composite rate component of the basic case-mix 
          adjusted prospective payment system for dialysis services.
Sec. 104. Extension of treatment of certain physician pathology services 
          under Medicare.
Sec. 105. Extension of Medicare reasonable costs payments for certain 
          clinical diagnostic laboratory tests furnished to hospital 
          patients in certain rural areas.
Sec. 106. Hospital Medicare reports and clarifications.
Sec. 107. Payment for brachytherapy.
Sec. 108. Payment process under the competitive acquisition program 
          (CAP).
Sec. 109. Quality reporting for hospital outpatient services and 
          ambulatory surgical center services.
Sec. 110. Reporting of anemia quality indicators for Medicare part B 
          cancer anti-anemia drugs.
Sec. 111. Clarification of hospice satellite designation.

               TITLE II--MEDICARE BENEFICIARY PROTECTIONS

Sec. 201. Extension of exceptions process for Medicare therapy caps.
Sec. 202. Payment for administration of part D vaccines.
Sec. 203. OIG study of never events.
Sec. 204. Medicare medical home demonstration project.
Sec. 205. Medicare DRA technical corrections.
Sec. 206. Limited continuous open enrollment of original medicare fee-
          for-service enrollees into Medicare Advantage non-prescription 
          drug plans.

              TITLE III--MEDICARE PROGRAM INTEGRITY EFFORTS

Sec. 301. Offsetting adjustment in Medicare Advantage Stabilization 
          Fund.
Sec. 302. Extension and expansion of recovery audit contractor program 
          under the Medicare Integrity Program.
Sec. 303. Funding for the Health Care Fraud and Abuse Control Account.
Sec. 304. Implementation funding.

             TITLE IV--MEDICAID AND OTHER HEALTH PROVISIONS

Sec. 401.  Extension of Transitional Medical Assistance (TMA) and 
          abstinence education program.
Sec. 402. Grants for research on vaccine against Valley Fever.
Sec. 403. Change in threshold for Medicaid indirect hold harmless 
          provision of broad-based health care taxes.
Sec. 404. DSH allotments for fiscal year 2007 for Tennessee and Hawaii.
Sec. 405. Certain Medicaid DRA technical corrections.

                      DIVISION C--OTHER PROVISIONS

                 TITLE I--GULF OF MEXICO ENERGY SECURITY

Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Offshore oil and gas leasing in 181 Area and 181 south Area of 
          Gulf of Mexico.
Sec. 104. Moratorium on oil and gas leasing in certain areas of Gulf of 
          Mexico.
Sec. 105. Disposition of qualified outer Continental Shelf revenues from 
          181 Area, 181 south Area, and 2002-2007 planning areas of Gulf 
          of Mexico.

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

Sec. 200. Short title.

               Subtitle A--Mining Control and Reclamation

Sec. 201. Abandoned Mine Reclamation Fund and purposes.
Sec. 202. Reclamation fee.
Sec. 203. Objectives of Fund.
Sec. 204. Reclamation of rural land.
Sec. 205. Liens.
Sec. 206. Certification.
Sec. 207. Remining incentives.
Sec. 208. Extension of limitation on application of prohibition on 
          issuance of permit.
Sec. 209. Tribal regulation of surface coal mining and reclamation 
          operations.

          Subtitle B--Coal Industry Retiree Health Benefit Act

Sec. 211. Certain related persons and successors in interest relieved of 
          liability if premiums prepaid.
Sec. 212. Transfers to funds; premium relief.
Sec. 213. Other provisions.

 TITLE III--WHITE PINE COUNTY CONSERVATION, RECREATION, AND DEVELOPMENT

Sec. 301. Authorization of appropriations.
Sec. 302. Short title.
Sec. 303. Definitions.

                        Subtitle A--Land Disposal

Sec. 311. Conveyance of White Pine County, Nevada, land.
Sec. 312. Disposition of proceeds.

                      Subtitle B--Wilderness Areas

Sec. 321. Short title.
Sec. 322. Findings.
Sec. 323. Additions to National Wilderness Preservation System.
Sec. 324. Administration.
Sec. 325. Adjacent management.
Sec. 326. Military overflights.
Sec. 327. Native American cultural and religious uses.
Sec. 328. Release of wilderness study areas.
Sec. 329. Wildlife management.
Sec. 330. Wildfire, insect, and disease management.
Sec. 331. Climatological data collection.

          Subtitle C--Transfers of Administrative Jurisdiction

Sec. 341. Transfer to the United States Fish and Wildlife Service.
Sec. 342. Transfer to the Bureau of Land Management.
Sec. 343. Transfer to the Forest Service.
Sec. 344. Availability of map and legal descriptions.

                     Subtitle D--Public Conveyances

Sec. 351. Conveyance to the State of Nevada.
Sec. 352. Conveyance to White Pine County, Nevada.

           Subtitle E--Silver State Off-Highway Vehicle Trail

Sec. 355. Silver State off-highway vehicle trail.

 Subtitle F--Transfer of Land to Be Held in Trust for the Ely Shoshone 
                                 Tribe.

Sec. 361. Transfer of land to be held in trust for the Ely Shoshone 
          Tribe.

        Subtitle G--Eastern Nevada Landscape Restoration Project.

Sec. 371. Findings; purposes.
Sec. 372. Definitions.
Sec. 373. Restoration project.

Subtitle H--Amendments to the Southern Nevada Public Land Management Act 
                                 of 1998

Sec. 381. Findings.
Sec. 382. Availability of special account.

 Subtitle I--Amendments to the Lincoln County Conservation, Recreation, 
                       and Development Act of 2004

Sec. 391. Disposition of proceeds.

                 Subtitle J--All American Canal Projects

Sec. 395. All American Canal Lining Project.
Sec. 396. Regulated storage water facility.
Sec. 397. Application of law.

                       TITLE IV--OTHER PROVISIONS

Sec. 401. Tobacco personal use quantity exception to not apply to 
          delivery sales.
Sec. 402. Ethanol Tariff Schedule.
Sec. 403. Withdrawal of certain Federal land and interests in certain 
          Federal land from location, entry, and patent under the mining 
          laws and disposition under the mineral and geothermal leasing 
          laws.
Sec. 404. Continuing eligibility for certain students under District of 
          Columbia School Choice Program.
Sec. 405. Study on Establishing Uniform National Database on Elder 
          Abuse.
Sec. 406. Temporary duty reductions for certain cotton shirting fabric.
Sec. 407. Cotton Trust Fund.
Sec. 408. Tax court review of requests for equitable relief from joint 
          and several liability.

 DIVISION A--EXTENSION AND EXPANSION OF CERTAIN TAX RELIEF PROVISIONS, 
                        AND OTHER TAX PROVISIONS

SEC. 100. 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.

       TITLE I--EXTENSION AND MODIFICATION OF CERTAIN PROVISIONS

SEC. 101. DEDUCTION FOR QUALIFIED TUITION AND RELATED EXPENSES.

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

SEC. 102. EXTENSION AND MODIFICATION OF NEW MARKETS TAX CREDIT.

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

SEC. 103. ELECTION TO DEDUCT STATE AND LOCAL GENERAL SALES TAXES.

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

SEC. 104. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.

  (a) Extension.--
          (1) In general.--Section 41(h)(1)(B) is amended by 
        striking ``2005'' and inserting ``2007''.
          (2) Conforming amendment.--Section 45C(b)(1)(D) is 
        amended by striking ``2005'' and inserting ``2007''.
          (3) Effective date.--The amendments made by this 
        subsection shall apply to amounts paid or incurred 
        after December 31, 2005.
  (b) Increase in Rates of Alternative Incremental Credit.--
          (1) In general.--Subparagraph (A) of section 41(c)(4) 
        (relating to election of alternative incremental 
        credit) is amended--
                  (A) by striking ``2.65 percent'' and 
                inserting ``3 percent'',
                  (B) by striking ``3.2 percent'' and inserting 
                ``4 percent'', and
                  (C) by striking ``3.75 percent'' and 
                inserting ``5 percent''.
          (2) Effective date.--Except as provided in paragraph 
        (3), the amendments made by this subsection shall apply 
        to taxable years ending after December 31, 2006.
          (3) Transition rule.--
                  (A) In general.--In the case of a specified 
                transitional taxable year for which an election 
                under section 41(c)(4) of the Internal Revenue 
                Code of 1986 applies, the credit determined 
                under section 41(a)(1) of such Code shall be 
                equal to the sum of--
                          (i) the applicable 2006 percentage 
                        multiplied by the amount determined 
                        under section 41(c)(4)(A) of such Code 
                        (as in effect for taxable years ending 
                        on December 31, 2006), plus
                          (ii) the applicable 2007 percentage 
                        multiplied by the amount determined 
                        under section 41(c)(4)(A) of such Code 
                        (as in effect for taxable years ending 
                        on January 1, 2007).
                  (B) Definitions.--For purposes of 
                subparagraph (A)--
                          (i) Specified transitional taxable 
                        year.--The term ``specified 
                        transitional taxable year'' means any 
                        taxable year which ends after December 
                        31, 2006, and which includes such date.
                          (ii) Applicable 2006 percentage.--The 
                        term ``applicable 2006 percentage'' 
                        means the number of days in the 
                        specified transitional taxable year 
                        before January 1, 2007, divided by the 
                        number of days in such taxable year.
                          (iii) Applicable 2007 percentage.--
                        The term ``applicable 2007 percentage'' 
                        means the number of days in the 
                        specified transitional taxable year 
                        after December 31, 2006, divided by the 
                        number of days in such taxable year.
  (c) Alternative Simplified Credit for Qualified Research 
Expenses.--
          (1) In general.--Subsection (c) of section 41 
        (relating to base amount) is amended by redesignating 
        paragraphs (5) and (6) as paragraphs (6) and (7), 
        respectively, and by inserting after paragraph (4) the 
        following new paragraph:
          ``(5) Election of alternative simplified credit.--
                  ``(A) In general.--At the election of the 
                taxpayer, the credit determined under 
                subsection (a)(1) shall be equal to 12 percent 
                of so much of the qualified research expenses 
                for the taxable year as exceeds 50 percent of 
                the average qualified research expenses for the 
                3 taxable years preceding the taxable year for 
                which the credit is being determined.
                  ``(B) Special rule in case of no qualified 
                research expenses in any of 3 preceding taxable 
                years.--
                          ``(i) Taxpayers to which subparagraph 
                        applies.--The credit under this 
                        paragraph shall be determined under 
                        this subparagraph if the taxpayer has 
                        no qualified research expenses in any 
                        one of the 3 taxable years preceding 
                        the taxable year for which the credit 
                        is being determined.
                          ``(ii) Credit rate.--The credit 
                        determined under this subparagraph 
                        shall be equal to 6 percent of the 
                        qualified research expenses for the 
                        taxable year.
                  ``(C) Election.--An election under this 
                paragraph shall apply to the taxable year for 
                which made and all succeeding taxable years 
                unless revoked with the consent of the 
                Secretary. An election under this paragraph may 
                not be made for any taxable year to which an 
                election under paragraph (4) applies.''.
          (2) Transition rule for deemed revocation of election 
        of alternative incremental credit.--In the case of an 
        election under section 41(c)(4) of the Internal Revenue 
        Code of 1986 which applies to the taxable year which 
        includes January 1, 2007, such election shall be 
        treated as revoked with the consent of the Secretary of 
        the Treasury if the taxpayer makes an election under 
        section 41(c)(5) of such Code (as added by this 
        subsection) for such year.
          (3) Effective date.--Except as provided in paragraph 
        (4), the amendments made by this subsection shall apply 
        to taxable years ending after December 31, 2006.
          (4) Transition rule for noncalendar taxable years.--
                  (A) In general.--In the case of a specified 
                transitional taxable year for which an election 
                under section 41(c)(5) of the Internal Revenue 
                Code of 1986 (as added by this subsection) 
                applies, the credit determined under section 
                41(a)(1) of such Code shall be equal to the sum 
                of--
                          (i) the applicable 2006 percentage 
                        multiplied by the amount determined 
                        under section 41(a)(1) of such Code (as 
                        in effect for taxable years ending on 
                        December 31, 2006), plus
                          (ii) the applicable 2007 percentage 
                        multiplied by the amount determined 
                        under section 41(c)(5) of such Code (as 
                        in effect for taxable years ending on 
                        January 1, 2007).
                  (B) Definitions and special rules.--For 
                purposes of subparagraph (A)--
                          (i) Definitions.--Terms used in this 
                        paragraph which are also used in 
                        subsection (b)(3) shall have the 
                        respective meanings given such terms in 
                        such subsection.
                          (ii) Dual elections permitted.--
                        Elections under paragraphs (4) and (5) 
                        of section 41(c) of such Code may both 
                        apply for the specified transitional 
                        taxable year.
                          (iii) Deferral of deemed election 
                        revocation.--Any election under section 
                        41(c)(4) of the Internal Revenue Code 
                        of 1986 treated as revoked under 
                        paragraph (2) shall be treated as 
                        revoked for the taxable year after the 
                        specified transitional taxable year.

SEC. 105. WORK OPPORTUNITY TAX CREDIT AND WELFARE-TO-WORK CREDIT.

  (a) In General.--Sections 51(c)(4)(B) and 51A(f) are each 
amended by striking ``2005'' and inserting ``2007''.
  (b) Eligibility of Ex-Felons Determined Without Regard to 
Family Income.--Paragraph (4) of section 51(d) is amended by 
adding ``and'' at the end of subparagraph (A), by striking ``, 
and'' at the end of subparagraph (B) and inserting a period, 
and by striking all that follows subparagraph (B).
  (c) Increase in Maximum Age for Eligibility of Food Stamp 
Recipients.--Clause (i) of section 51(d)(8)(A) is amended by 
striking ``25'' and inserting ``40''.
  (d) Extension of Paperwork Filing Deadline.--Section 
51(d)(12)(A)(ii)(II) is amended by striking ``21st day'' and 
inserting ``28th day''.
  (e) Consolidation of Work Opportunity Credit With Welfare-to-
Work Credit.--
          (1) In general.--Paragraph (1) of section 51(d) is 
        amended by striking ``or'' at the end of subparagraph 
        (G), by striking the period at the end of subparagraph 
        (H) and inserting ``, or'', and by adding at the end 
        the following new subparagraph:
                  ``(I) a long-term family assistance 
                recipient.''.
          (2) Long-term family assistance recipient.--
        Subsection (d) of section 51 is amended by 
        redesignating paragraphs (10) through (12) as 
        paragraphs (11) through (13), respectively, and by 
        inserting after paragraph (9) the following new 
        paragraph:
          ``(10) Long-term family assistance recipient.--The 
        term `long-term family assistance recipient' means any 
        individual who is certified by the designated local 
        agency--
                  ``(A) as being a member of a family receiving 
                assistance under a IV-A program (as defined in 
                paragraph (2)(B)) for at least the 18-month 
                period ending on the hiring date,
                  ``(B)(i) as being a member of a family 
                receiving such assistance for 18 months 
                beginning after August 5, 1997, and
                  ``(ii) as having a hiring date which is not 
                more than 2 years after the end of the earliest 
                such 18-month period, or
                  ``(C)(i) as being a member of a family which 
                ceased to be eligible for such assistance by 
                reason of any limitation imposed by Federal or 
                State law on the maximum period such assistance 
                is payable to a family, and
                  ``(ii) as having a hiring date which is not 
                more than 2 years after the date of such 
                cessation.''.
          (3) Increased credit for employment of long-term 
        family assistance recipients.--Section 51 is amended by 
        inserting after subsection (d) the following new 
        subsection:
  ``(e) Credit for Second-Year Wages for Employment of Long-
Term Family Assistance Recipients.--
          ``(1) In general.--With respect to the employment of 
        a long-term family assistance recipient--
                  ``(A) the amount of the work opportunity 
                credit determined under this section for the 
                taxable year shall include 50 percent of the 
                qualified second-year wages for such year, and
                  ``(B) in lieu of applying subsection (b)(3), 
                the amount of the qualified first-year wages, 
                and the amount of qualified second-year wages, 
                which may be taken into account with respect to 
                such a recipient shall not exceed $10,000 per 
                year.
          ``(2) Qualified second-year wages.--For purposes of 
        this subsection, the term `qualified second-year wages' 
        means qualified wages--
                  ``(A) which are paid to a long-term family 
                assistance recipient, and
                  ``(B) which are attributable to service 
                rendered during the 1-year period beginning on 
                the day after the last day of the 1-year period 
                with respect to such recipient determined under 
                subsection (b)(2).
          ``(3) Special rules for agricultural and railway 
        labor.--If such recipient is an employee to whom 
        subparagraph (A) or (B) of subsection (h)(1) applies, 
        rules similar to the rules of such subparagraphs shall 
        apply except that--
                  ``(A) such subparagraph (A) shall be applied 
                by substituting `$10,000' for `$6,000', and
                  ``(B) such subparagraph (B) shall be applied 
                by substituting `$833.33' for `$500'.''.
          (4) Repeal of separate welfare-to-work credit.--
                  (A) In general.--Section 51A is hereby 
                repealed.
                  (B) Clerical amendment.--The table of 
                sections for subpart F of part IV of subchapter 
                A of chapter 1 is amended by striking the item 
                relating to section 51A.
  (f) Effective Dates.--
          (1) In general.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to 
        individuals who begin work for the employer after 
        December 31, 2005.
          (2) Consolidation.--The amendments made by 
        subsections (b), (c), (d), and (e) shall apply to 
        individuals who begin work for the employer after 
        December 31, 2006.

SEC. 106. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR PURPOSES 
                    OF EARNED INCOME CREDIT.

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

SEC. 107. EXTENSION AND MODIFICATION OF QUALIFIED ZONE ACADEMY BONDS.

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

SEC. 108. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY 
                    AND SECONDARY SCHOOL TEACHERS.

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

SEC. 109. EXTENSION AND EXPANSION OF EXPENSING OF BROWNFIELDS 
                    REMEDIATION COSTS.

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

SEC. 110. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.

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

SEC. 111. INDIAN EMPLOYMENT TAX CREDIT.

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

SEC. 112. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON INDIAN 
                    RESERVATIONS.

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

SEC. 113. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 
                    LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT 
                    PROPERTY.

  (a) In General.--Clauses (iv) and (v) of section 168(e)(3)(E) 
are each amended by striking ``2006'' and inserting ``2008''.
  (b) Effective Date.--The amendments made by subsection (a) 
shall apply to property placed in service after December 31, 
2005.

SEC. 114. COVER OVER OF TAX ON DISTILLED SPIRITS.

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

SEC. 115. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH 
                    BENEFITS.

  (a) Amendment to the Internal Revenue Code of 1986.--Section 
9812(f)(3) is amended by striking ``2006'' and inserting 
``2007''.
  (b) Amendment to the Employee Retirement Income Security Act 
of 1974.--Section 712(f) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by 
striking ``2006'' and inserting ``2007''.
  (c) Amendment to the Public Health Service Act.--Section 
2705(f) of the Public Health Service Act (42 U.S.C. 300gg-5(f)) 
is amended by striking ``2006''and inserting ``2007''.

SEC. 116. CORPORATE DONATIONS OF SCIENTIFIC PROPERTY USED FOR RESEARCH 
                    AND OF COMPUTER TECHNOLOGY AND EQUIPMENT.

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

SEC. 117. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

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

SEC. 118. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR OIL AND 
                    NATURAL GAS PRODUCED FROM MARGINAL PROPERTIES.

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

SEC. 119. AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT.

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

SEC. 120. EXTENSION OF BONUS DEPRECIATION FOR CERTAIN QUALIFIED GULF 
                    OPPORTUNITY ZONE PROPERTY.

  (a) In General.--Subsection (d) of section 1400N is amended 
by adding at the end the following new paragraph:
          ``(6) Extension for certain property.--
                  ``(A) In general.--In the case of any 
                specified Gulf Opportunity Zone extension 
                property, paragraph (2)(A) shall be applied 
                without regard to clause (v) thereof.
                  ``(B) Specified gulf opportunity zone 
                extension property.--For purposes of this 
                paragraph, the term `specified Gulf Opportunity 
                Zone extension property' means property--
                          ``(i) substantially all of the use of 
                        which is in one or more specified 
                        portions of the GO Zone, and
                          ``(ii) which is--
                                  ``(I) nonresidential real 
                                property or residential rental 
                                property which is placed in 
                                service by the taxpayer on or 
                                before December 31, 2010, or
                                  ``(II) in the case of a 
                                taxpayer who places a building 
                                described in subclause (I) in 
                                service on or before December 
                                31, 2010, property described in 
                                section 168(k)(2)(A)(i) if 
                                substantially all of the use of 
                                such property is in such 
                                building and such property is 
                                placed in service by the 
                                taxpayer not later than 90 days 
                                after such building is placed 
                                in service.
                  ``(C) Specified portions of the go zone.--For 
                purposes of this paragraph, the term `specified 
                portions of the GO Zone' means those portions 
                of the GO Zone which are in any county or 
                parish which is identified by the Secretary as 
                being a county or parish in which hurricanes 
                occurring during 2005 damaged (in the 
                aggregate) more than 60 percent of the housing 
                units in such county or parish which were 
                occupied (determined according to the 2000 
                Census).
                  ``(D) Only pre-january 1, 2010, basis of real 
                property eligible for additional allowance.--In 
                the case of property which is qualified Gulf 
                Opportunity Zone property solely by reason of 
                subparagraph (B)(ii)(I), paragraph (1) shall 
                apply only to the extent of the adjusted basis 
                thereof attributable to manufacture, 
                construction, or production before January 1, 
                2010.''.
  (b) Extension Not Applicable to Increased Section 179 
Expensing.--Paragraph (2) of section 1400N(e) is amended by 
inserting ``without regard to subsection (d)(6)'' after 
``subsection (d)(2)''.
  (c) Effective Date.--The amendments made by this section 
shall take effect as if included in section 101 of the Gulf 
Opportunity Zone Act of 2005.

SEC. 121. AUTHORITY FOR UNDERCOVER OPERATIONS.

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

SEC. 122. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION.

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

SEC. 123. SPECIAL RULE FOR ELECTIONS UNDER EXPIRED PROVISIONS.

  (a) Research Credit Elections.--In the case of any taxable 
year ending after December 31, 2005, and before the date of the 
enactment of this Act, any election under section 41(c)(4) or 
section 280C(c)(3)(C) of the Internal Revenue Code of 1986 
shall be treated as having been timely made for such taxable 
year if such election is made not later than the later of April 
15, 2007, or such time as the Secretary of the Treasury, or his 
designee, may specify. Such election shall be made in the 
manner prescribed by such Secretary or designee.
  (b) Other Elections.--Except as otherwise provided by such 
Secretary or designee, a rule similar to the rule of subsection 
(a) shall apply with respect to elections under any other 
expired provision of the Internal Revenue Code of 1986 the 
applicability of which is extended by reason of the amendments 
made by this title.

                    TITLE II--ENERGY TAX PROVISIONS

SEC. 201. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE 
                    RESOURCES.

  Subsection (d) of section 45 is amended by striking ``January 
1, 2008'' each place it appears and inserting ``January 1, 
2009''.

SEC. 202. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY BONDS.

  (a) In General.--Section 54 is amended--
          (1) by striking ``$800,000,000'' in subsection (f)(1) 
        and inserting ``$1,200,000,000'',
          (2) by striking ``$500,000,000'' in subsection (f)(2) 
        and inserting ``$750,000,000'', and
          (3) by striking ``December 31, 2007'' in subsection 
        (m) and inserting ``December 31, 2008''.
  (b) Effective Dates.--
          (1) In general.--The amendments made by paragraphs 
        (1) and (3) of subsection (a) shall apply to bonds 
        issued after December 31, 2006.
          (2) Allocations.--The amendment made by subsection 
        (a)(2) shall apply to allocations or reallocations 
        after December 31, 2006.

SEC. 203. PERFORMANCE STANDARDS FOR SULFUR DIOXIDE REMOVAL IN ADVANCED 
                    COAL-BASED GENERATION TECHNOLOGY UNITS DESIGNED TO 
                    USE SUBBITUMINOUS COAL.

  (a) In General.--Paragraph (1) of section 48A(f) (relating to 
advanced coal-based generation technology) is amended by adding 
at the end the following new flush sentence:
        ``For purposes of the performance requirement specified 
        for the removal of SO2 in the table 
        contained in subparagraph (B), the SO2 
        removal design level in the case of a unit designed for 
        the use of feedstock substantially all of which is 
        subbituminous coal shall be 99 percent SO2 
        removal or the achievement of an emission level of 0.04 
        pounds or less of SO2 per million Btu, 
        determined on a 30-day average.''.
  (b) Effective Date.--The amendment made by this section shall 
take apply with respect to applications for certification under 
section 48A(d)(2) of the Internal Revenue Code of 1986 
submitted after October 2, 2006.

SEC. 204. DEDUCTION FOR ENERGY EFFICIENT COMMERCIAL BUILDINGS.

  Subsection (h) of section 179D is amended by striking 
``December 31, 2007'' and inserting ``December 31, 2008''.

SEC. 205. CREDIT FOR NEW ENERGY EFFICIENT HOMES.

  Subsection (g) of section 45L is amended by striking 
``December 31, 2007'' and inserting ``December 31, 2008''.

SEC. 206. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

  (a) Extension.--Subsection (g) of section 25D is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 
2008''.
  (b) Clarification of Term.--
          (1) Subsections (a)(1), (b)(1)(A), and (e)(4)(A)(i) 
        of section 25D are each amended by striking ``qualified 
        photovoltaic property expenditures'' and inserting 
        ``qualified solar electric property expenditures''.
          (2) Section 25D(d)(2) is amended--
                  (A) by striking ``qualified photovoltaic 
                property expenditure'' and inserting 
                ``qualified solar electric property 
                expenditure'', and
                  (B) in the heading by striking ``qualified 
                photovoltaic property expenditure'' and 
                inserting ``qualified solar electric property 
                expenditure''.

SEC. 207. ENERGY CREDIT.

  Section 48 is amended--
          (1) by striking ``January 1, 2008'' both places it 
        appears and inserting ``January 1, 2009'', and
          (2) by striking ``December 31, 2007'' both places it 
        appears and inserting ``December 31, 2008''.

SEC. 208. SPECIAL RULE FOR QUALIFIED METHANOL OR ETHANOL FUEL.

  (a) Extension.--Subparagraph (D) of section 4041(b)(2) is 
amended by striking ``October 1, 2007'' and inserting ``January 
1, 2009''.
  (b) Applicable Blender Rate.--Section 4041(b)(2)(C)(ii) is 
amended by striking ``2007'' and inserting ``2008''.
  (c) Clerical Amendment.--The heading for section 
4041(b)(2)(B) is amended to read as follows: ``Qualified 
methanol and ethanol fuel produced from coal''.

SEC. 209. SPECIAL DEPRECIATION ALLOWANCE FOR CELLULOSIC BIOMASS ETHANOL 
                    PLANT PROPERTY.

  (a) In General.--Section 168 (relating to accelerated cost 
recovery system) is amended by adding at the end the following:
  ``(l) Special Allowance for Cellulosic Biomass Ethanol Plant 
Property.--
          ``(1) Additional allowance.--In the case of any 
        qualified cellulosic biomass ethanol plant 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 such property, and
                  ``(B) the adjusted basis of such 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 cellulosic biomass ethanol plant 
        property.--The term `qualified cellulosic biomass 
        ethanol plant property' means property of a character 
        subject to the allowance for depreciation--
                  ``(A) which is used in the United States 
                solely to produce cellulosic biomass ethanol,
                  ``(B) the original use of which commences 
                with the taxpayer after the date of the 
                enactment of this subsection,
                  ``(C) which is acquired by the taxpayer by 
                purchase (as defined in section 179(d)) after 
                the date of the enactment of this subsection, 
                but only if no written binding contract for the 
                acquisition was in effect on or before the date 
                of the enactment of this subsection, and
                  ``(D) which is placed in service by the 
                taxpayer before January 1, 2013.
          ``(3) Cellulosic biomass ethanol.--For purposes of 
        this subsection, the term `cellulosic biomass ethanol' 
        means ethanol produced by enzymatic hydrolysis of any 
        lignocellulosic or hemicellulosic matter that is 
        available on a renewable or recurring basis.
          ``(4) Exceptions.--
                  ``(A) Alternative depreciation property.--
                Such term shall not include any property 
                described in section 168(k)(2)(D)(i).
                  ``(B) 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.
                  ``(C) Election out.--If a taxpayer makes an 
                election under this subparagraph 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.
          ``(5) Special rules.--For purposes of this 
        subsection, rules similar to the rules of subparagraph 
        (E) of section 168(k)(2) shall apply, except that such 
        subparagraph shall be applied--
                  ``(A) by substituting `the date of the 
                enactment of subsection (l)' for `September 10, 
                2001' each place it appears therein,
                  ``(B) by substituting `January 1, 2013' for 
                `January 1, 2005' in clause (i) thereof, and
                  ``(C) by substituting `qualified cellulosic 
                biomass ethanol plant property' for `qualified 
                property' in clause (iv) thereof.
          ``(6) Allowance against alternative minimum tax.--For 
        purposes of this subsection, rules similar to the rules 
        of section 168(k)(2)(G) shall apply.
          ``(7) Recapture.--For purposes of this subsection, 
        rules similar to the rules under section 179(d)(10) 
        shall apply with respect to any qualified cellulosic 
        biomass ethanol plant property which ceases to be 
        qualified cellulosic biomass ethanol plant property.
          ``(8) Denial of double benefit.--Paragraph (1) shall 
        not apply to any qualified cellulosic biomass ethanol 
        plant property with respect to which an election has 
        been made under section 179C (relating to election to 
        expense certain refineries).''.
  (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 in taxable years ending after such date.

SEC. 210. EXPENDITURES PERMITTED FROM THE LEAKING UNDERGROUND STORAGE 
                    TANK TRUST FUND.

  (a) In General.--Subsection (c) of section 9508 is amended--
          (1) by striking ``section 9003(h)'' and inserting 
        ``sections 9003(h), 9003(i), 9003(j), 9004(f), 9005(c), 
        9010, 9011, 9012, and 9013'', and
          (2) by striking ``Superfund Amendments and 
        Reauthorization Act of 1986'' and inserting ``Public 
        Law 109-168''.
  (b) Conforming Amendments.--Section 9014(2) of the Solid 
Waste Disposal Act is amended by striking ``Fund, 
notwithstanding section 9508(c)(1) of the Internal Revenue Code 
of 1986'' and inserting ``Fund''.
  (c) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act.

SEC. 211. TREATMENT OF COKE AND COKE GAS.

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

                   TITLE III--HEALTH SAVINGS ACCOUNTS

SEC. 301. SHORT TITLE.

  This title may be cited as the ``Health Opportunity Patient 
Empowerment Act of 2006''.

SEC. 302. FSA AND HRA TERMINATIONS TO FUND HSAS.

  (a) In General.--Section 106 (relating to contributions by 
employer to accident and health plans) is amended by adding at 
the end the following new subsection:
  ``(e) FSA and HRA Terminations to Fund HSAs.--
          ``(1) In general.--A plan shall not fail to be 
        treated as a health flexible spending arrangement or 
        health reimbursement arrangement under this section or 
        section 105 merely because such plan provides for a 
        qualified HSA distribution.
          ``(2) Qualified hsa distribution.--The term 
        `qualified HSA distribution' means a distribution from 
        a health flexible spending arrangement or health 
        reimbursement arrangement to the extent that such 
        distribution--
                  ``(A) does not exceed the lesser of the 
                balance in such arrangement on September 21, 
                2006, or as of the date of such distribution, 
                and
                  ``(B) is contributed by the employer directly 
                to the health savings account of the employee 
                before January 1, 2012.
        Such term shall not include more than 1 distribution 
        with respect to any arrangement.
          ``(3) Additional tax for failure to maintain high 
        deductible health plan coverage.--
                  ``(A) In general.--If, at any time during the 
                testing period, the employee is not an eligible 
                individual, then the amount of the qualified 
                HSA distribution--
                          ``(i) shall be includible in the 
                        gross income of the employee for the 
                        taxable year in which occurs the first 
                        month in the testing period for which 
                        such employee is not an eligible 
                        individual, and
                          ``(ii) the tax imposed by this 
                        chapter for such taxable year on the 
                        employee shall be increased by 10 
                        percent of the amount which is so 
                        includible.
                  ``(B) Exception for disability or death.--
                Clauses (i) and (ii) of subparagraph (A) shall 
                not apply if the employee ceases to be an 
                eligible individual by reason of the death of 
                the employee or the employee becoming disabled 
                (within the meaning of section 72(m)(7)).
          ``(4) Definitions and special rules.--For purposes of 
        this subsection--
                  ``(A) Testing period.--The term `testing 
                period' means the period beginning with the 
                month in which the qualified HSA distribution 
                is contributed to the health savings account 
                and ending on the last day of the 12th month 
                following such month.
                  ``(B) Eligible individual.--The term 
                `eligible individual' has the meaning given 
                such term by section 223(c)(1).
                  ``(C) Treatment as rollover contribution.--A 
                qualified HSA distribution shall be treated as 
                a rollover contribution described in section 
                223(f)(5).
          ``(5) Tax treatment relating to distributions.--For 
        purposes of this title--
                  ``(A) In general.--A qualified HSA 
                distribution shall be treated as a payment 
                described in subsection (d).
                  ``(B) Comparability excise tax.--
                          ``(i) In general.--Except as provided 
                        in clause (ii), section 4980G shall not 
                        apply to qualified HSA distributions.
                          ``(ii) Failure to offer to all 
                        employees.--In the case of a qualified 
                        HSA distribution to any employee, the 
                        failure to offer such distribution to 
                        any eligible individual covered under a 
                        high deductible health plan of the 
                        employer shall (notwithstanding section 
                        4980G(d)) be treated for purposes of 
                        section 4980G as a failure to meet the 
                        requirements of section 4980G(b).''.
  (b) Certain FSA Coverage Disregarded Coverage.--Subparagraph 
(B) of section 223(c)(1) (relating to certain coverage 
disregarded) is amended by striking ``and'' at the end of 
clause (i), by striking the period at the end of clause (ii) 
and inserting ``, and'', and by inserting after clause (ii) the 
following new clause:
                          ``(iii) for taxable years beginning 
                        after December 31, 2006, coverage under 
                        a health flexible spending arrangement 
                        during any period immediately following 
                        the end of a plan year of such 
                        arrangement during which unused 
                        benefits or contributions remaining at 
                        the end of such plan year may be paid 
                        or reimbursed to plan participants for 
                        qualified benefit expenses incurred 
                        during such period if--
                                  ``(I) the balance in such 
                                arrangement at the end of such 
                                plan year is zero, or
                                  ``(II) the individual is 
                                making a qualified HSA 
                                distribution (as defined in 
                                section 106(e)) in an amount 
                                equal to the remaining balance 
                                in such arrangement as of the 
                                end of such plan year, in 
                                accordance with rules 
                                prescribed by the Secretary.''.
  (c) Application of Section.--
          (1) Subsection (a).--The amendment made by subsection 
        (a) shall apply to distributions on or after the date 
        of the enactment of this Act.
          (2) Subsection (b).--The amendment made by subsection 
        (b) shall take effect on the date of the enactment of 
        this Act.

SEC. 303. REPEAL OF ANNUAL DEDUCTIBLE LIMITATION ON HSA CONTRIBUTIONS.

  (a) In General.--Paragraph (2) of section 223(b) (relating to 
monthly limitation) is amended--
          (1) in subparagraph (A) by striking ``the lesser of--
        '' and all that follows and inserting ``$2,250.'', and
          (2) in subparagraph (B) by striking ``the lesser of--
        '' and all that follows and inserting ``$4,500.''.
  (b) Conforming Amendment.--Section 223(d)(1)(A)(ii)(I) is 
amended by striking ``subsection (b)(2)(B)(ii)'' and inserting 
``subsection (b)(2)(B)''.
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2006.

SEC. 304. MODIFICATION OF COST-OF-LIVING ADJUSTMENT.

  Paragraph (1) of section 223(g) (relating to cost-of-living 
adjustment) is amended by adding at the end the following new 
flush sentence:
        ``In the case of adjustments made for any taxable year 
        beginning after 2007, section 1(f)(4) shall be applied 
        for purposes of this paragraph by substituting `March 
        31' for `August 31', and the Secretary shall publish 
        the adjusted amounts under subsections (b)(2) and 
        (c)(2)(A) for taxable years beginning in any calendar 
        year no later than June 1 of the preceding calendar 
        year.''.

SEC. 305. CONTRIBUTION LIMITATION NOT REDUCED FOR PART-YEAR COVERAGE.

  (a) Increase in Limit for Individuals Becoming Eligible 
Individuals After Beginning of the Year.--Subsection (b) of 
section 223 (relating to limitations) is amended by adding at 
the end the following new paragraph:
          ``(8) Increase in limit for individuals becoming 
        eligible individuals after the beginning of the year.--
                  ``(A) In general.--For purposes of computing 
                the limitation under paragraph (1) for any 
                taxable year, an individual who is an eligible 
                individual during the last month of such 
                taxable year shall be treated--
                          ``(i) as having been an eligible 
                        individual during each of the months in 
                        such taxable year, and
                          ``(ii) as having been enrolled, 
                        during each of the months such 
                        individual is treated as an eligible 
                        individual solely by reason of clause 
                        (i), in the same high deductible health 
                        plan in which the individual was 
                        enrolled for the last month of such 
                        taxable year.
                  ``(B) Failure to maintain high deductible 
                health plan coverage.--
                          ``(i) In general.--If, at any time 
                        during the testing period, the 
                        individual is not an eligible 
                        individual, then--
                                  ``(I) gross income of the 
                                individual for the taxable year 
                                in which occurs the first month 
                                in the testing period for which 
                                such individual is not an 
                                eligible individual is 
                                increased by the aggregate 
                                amount of all contributions to 
                                the health savings account of 
                                the individual which could not 
                                have been made but for 
                                subparagraph (A), and
                                  ``(II) the tax imposed by 
                                this chapter for any taxable 
                                year on the individual shall be 
                                increased by 10 percent of the 
                                amount of such increase.
                          ``(ii) Exception for disability or 
                        death.--Subclauses (I) and (II) of 
                        clause (i) shall not apply if the 
                        individual ceased to be an eligible 
                        individual by reason of the death of 
                        the individual or the individual 
                        becoming disabled (within the meaning 
                        of section 72(m)(7)).
                          ``(iii) Testing period.--The term 
                        `testing period' means the period 
                        beginning with the last month of the 
                        taxable year referred to in 
                        subparagraph (A) and ending on the last 
                        day of the 12th month following such 
                        month.''.
  (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2006.

SEC. 306. EXCEPTION TO REQUIREMENT FOR EMPLOYERS TO MAKE COMPARABLE 
                    HEALTH SAVINGS ACCOUNT CONTRIBUTIONS.

  (a) In General.--Section 4980G (relating to failure of 
employer to make comparable health savings account 
contributions) is amended by adding at the end the following 
new subsection:
  ``(d) Exception.--For purposes of applying section 4980E to a 
contribution to a health savings account of an employee who is 
not a highly compensated employee (as defined in section 
414(q)), highly compensated employees shall not be treated as 
comparable participating employees.''.
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 307. ONE-TIME DISTRIBUTION FROM INDIVIDUAL RETIREMENT PLANS TO 
                    FUND HSAS.

  (a) In General.--Subsection (d) of section 408 (relating to 
taxability of beneficiary of employees' trust) is amended by 
adding at the end the following new paragraph:
          ``(9) Distribution for health savings account 
        funding.--
                  ``(A) In general.--In the case of an 
                individual who is an eligible individual (as 
                defined in section 223(c)) and who elects the 
                application of this paragraph for a taxable 
                year, gross income of the individual for the 
                taxable year does not include a qualified HSA 
                funding distribution to the extent such 
                distribution is otherwise includible in gross 
                income.
                  ``(B) Qualified hsa funding distribution.--
                For purposes of this paragraph, the term 
                `qualified HSA funding distribution' means a 
                distribution from an individual retirement plan 
                (other than a plan described in subsection (k) 
                or (p)) of the employee to the extent that such 
                distribution is contributed to the health 
                savings account of the individual in a direct 
                trustee-to-trustee transfer.
                  ``(C) Limitations.--
                          ``(i) Maximum dollar limitation.--The 
                        amount excluded from gross income by 
                        subparagraph (A) shall not exceed the 
                        excess of--
                                  ``(I) the annual limitation 
                                under section 223(b) computed 
                                on the basis of the type of 
                                coverage under the high 
                                deductible health plan covering 
                                the individual at the time of 
                                the qualified HSA funding 
                                distribution, over
                                  ``(II) in the case of a 
                                distribution described in 
                                clause (ii)(II), the amount of 
                                the earlier qualified HSA 
                                funding distribution.
                          ``(ii) One-time transfer.--
                                  ``(I) In general.--Except as 
                                provided in subclause (II), an 
                                individual may make an election 
                                under subparagraph (A) only for 
                                one qualified HSA funding 
                                distribution during the 
                                lifetime of the individual. 
                                Such an election, once made, 
                                shall be irrevocable.
                                  ``(II) Conversion from self-
                                only to family coverage.--If a 
                                qualified HSA funding 
                                distribution is made during a 
                                month in a taxable year during 
                                which an individual has self-
                                only coverage under a high 
                                deductible health plan as of 
                                the first day of the month, the 
                                individual may elect to make an 
                                additional qualified HSA 
                                funding distribution during a 
                                subsequent month in such 
                                taxable year during which the 
                                individual has family coverage 
                                under a high deductible health 
                                plan as of the first day of the 
                                subsequent month.
                  ``(D) Failure to maintain high deductible 
                health plan coverage.--
                          ``(i) In general.--If, at any time 
                        during the testing period, the 
                        individual is not an eligible 
                        individual, then the aggregate amount 
                        of all contributions to the health 
                        savings account of the individual made 
                        under subparagraph (A)--
                                  ``(I) shall be includible in 
                                the gross income of the 
                                individual for the taxable year 
                                in which occurs the first month 
                                in the testing period for which 
                                such individual is not an 
                                eligible individual, and
                                  ``(II) the tax imposed by 
                                this chapter for any taxable 
                                year on the individual shall be 
                                increased by 10 percent of the 
                                amount which is so includible.
                          ``(ii) Exception for disability or 
                        death.--Subclauses (I) and (II) of 
                        clause (i) shall not apply if the 
                        individual ceased to be an eligible 
                        individual by reason of the death of 
                        the individual or the individual 
                        becoming disabled (within the meaning 
                        of section 72(m)(7)).
                          ``(iii) Testing period.--The term 
                        `testing period' means the period 
                        beginning with the month in which the 
                        qualified HSA funding distribution is 
                        contributed to a health savings account 
                        and ending on the last day of the 12th 
                        month following such month.
                  ``(E) Application of section 72.--
                Notwithstanding section 72, in determining the 
                extent to which an amount is treated as 
                otherwise includible in gross income for 
                purposes of subparagraph (A), the aggregate 
                amount distributed from an individual 
                retirement plan shall be treated as includible 
                in gross income to the extent that such amount 
                does not exceed the aggregate amount which 
                would have been so includible if all amounts 
                from all individual retirement plans were 
                distributed. Proper adjustments shall be made 
                in applying section 72 to other distributions 
                in such taxable year and subsequent taxable 
                years.''.
  (b) Coordination With Limitation on Contributions to HSAs.--
Section 223(b)(4) (relating to coordination with other 
contributions) 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 inserting 
after subparagraph (B) the following new subparagraph:
                  ``(C) the aggregate amount contributed to 
                health savings accounts of such individual for 
                such taxable year under section 408(d)(9) (and 
                such amount shall not be allowed as a deduction 
                under subsection (a)).''.
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2006.

                       TITLE IV--OTHER PROVISIONS

SEC. 401. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO 
                    DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO.

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

SEC. 402. CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY MADE REFUNDABLE 
                    AFTER PERIOD OF YEARS.

  (a) In General.--Section 53 (relating to credit for prior 
year minimum tax liability) is amended by adding at the end the 
following new subsection:
  ``(e) Special Rule for Individuals With Long-Term Unused 
Credits.--
          ``(1) In general.--If an individual has a long-term 
        unused minimum tax credit for any taxable year 
        beginning before January 1, 2013, the amount determined 
        under subsection (c) for such taxable year shall not be 
        less than the AMT refundable credit amount for such 
        taxable year.
          ``(2) Amt refundable credit amount.--For purposes of 
        paragraph (1)--
                  ``(A) In general.--The term `AMT refundable 
                credit amount' means, with respect to any 
                taxable year, the amount equal to the greater 
                of--
                          ``(i) the lesser of--
                                  ``(I) $5,000, or
                                  ``(II) the amount of long-
                                term unused minimum tax credit 
                                for such taxable year, or
                          ``(ii) 20 percent of the amount of 
                        such credit.
                  ``(B) Phaseout of amt refundable credit 
                amount.--
                          ``(i) In general.--In the case of an 
                        individual whose adjusted gross income 
                        for any taxable year exceeds the 
                        threshold amount (within the meaning of 
                        section 151(d)(3)(C)), the AMT 
                        refundable credit amount determined 
                        under subparagraph (A) for such taxable 
                        year shall be reduced by the applicable 
                        percentage (within the meaning of 
                        section 151(d)(3)(B)).
                          ``(ii) Adjusted gross income.--For 
                        purposes of clause (i), adjusted gross 
                        income shall be determined without 
                        regard to sections 911, 931, and 933.
          ``(3) Long-term unused minimum tax credit.--
                  ``(A) In general.--For purposes of this 
                subsection, the term `long-term unused minimum 
                tax credit' means, with respect to any taxable 
                year, the portion of the minimum tax credit 
                determined under subsection (b) attributable to 
                the adjusted net minimum tax for taxable years 
                before the 3rd taxable year immediately 
                preceding such taxable year.
                  ``(B) First-in, first-out ordering rule.--For 
                purposes of subparagraph (A), credits shall be 
                treated as allowed under subsection (a) on a 
                first-in, first-out basis.
          ``(4) Credit refundable.--For purposes of this title 
        (other than this section), the credit allowed by reason 
        of this subsection shall be treated as if it were 
        allowed under subpart C.''.
  (b) Conforming Amendments.--
          (1) Section 6211(b)(4)(A) is amended by striking 
        ``and 34'' and inserting ``34, and 53(e)''.
          (2) Paragraph (2) of section 1324(b) of title 31, 
        United States Code, is amended by inserting ``or 
        53(e)'' after ``section 35''.
  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after the date of the 
enactment of this Act.

SEC. 403. RETURNS REQUIRED IN CONNECTION WITH CERTAIN OPTIONS.

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

SEC. 404. PARTIAL EXPENSING FOR ADVANCED MINE SAFETY EQUIPMENT.

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

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

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

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

SEC. 405. MINE RESCUE TEAM TRAINING TAX CREDIT.

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

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

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

``Sec. 45N. Mine rescue team training credit.''.
  (e) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2005.

SEC. 406. WHISTLEBLOWER REFORMS.

  (a) Awards to Whistleblowers.--
          (1) In general.--Section 7623 (relating to expenses 
        of detection of underpayments and fraud, etc.) is 
        amended--
                  (A) by striking ``The Secretary'' and 
                inserting ``(a) In General.--The Secretary'',
                  (B) by striking ``and'' at the end of 
                paragraph (1) and inserting ``or'',
                  (C) by striking ``(other than interest)'', 
                and
                  (D) by adding at the end the following new 
                subsection:
  ``(b) Awards to Whistleblowers.--
          ``(1) In general.--If the Secretary proceeds with any 
        administrative or judicial action described in 
        subsection (a) based on information brought to the 
        Secretary's attention by an individual, such individual 
        shall, subject to paragraph (2), receive as an award at 
        least 15 percent but not more than 30 percent of the 
        collected proceeds (including penalties, interest, 
        additions to tax, and additional amounts) resulting 
        from the action (including any related actions) or from 
        any settlement in response to such action. The 
        determination of the amount of such award by the 
        Whistleblower Office shall depend upon the extent to 
        which the individual substantially contributed to such 
        action.
          ``(2) Award in case of less substantial 
        contribution.--
                  ``(A) In general.--In the event the action 
                described in paragraph (1) is one which the 
                Whistleblower Office determines to be based 
                principally on disclosures of specific 
                allegations (other than information provided by 
                the individual described in paragraph (1)) 
                resulting from a judicial or administrative 
                hearing, from a governmental report, hearing, 
                audit, or investigation, or from the news 
                media, the Whistleblower Office may award such 
                sums as it considers appropriate, but in no 
                case more than 10 percent of the collected 
                proceeds (including penalties, interest, 
                additions to tax, and additional amounts) 
                resulting from the action (including any 
                related actions) or from any settlement in 
                response to such action, taking into account 
                the significance of the individual's 
                information and the role of such individual and 
                any legal representative of such individual in 
                contributing to such action.
                  ``(B) Nonapplication of paragraph where 
                individual is original source of information.--
                Subparagraph (A) shall not apply if the 
                information resulting in the initiation of the 
                action described in paragraph (1) was 
                originally provided by the individual described 
                in paragraph (1).
          ``(3) Reduction in or denial of award.--If the 
        Whistleblower Office determines that the claim for an 
        award under paragraph (1) or (2) is brought by an 
        individual who planned and initiated the actions that 
        led to the underpayment of tax or actions described in 
        subsection (a)(2), then the Whistleblower Office may 
        appropriately reduce such award. If such individual is 
        convicted of criminal conduct arising from the role 
        described in the preceding sentence, the Whistleblower 
        Office shall deny any award.
          ``(4) Appeal of award determination.--Any 
        determination regarding an award under paragraph (1), 
        (2), or (3) may, within 30 days of such determination, 
        be appealed to the Tax Court (and the Tax Court shall 
        have jurisdiction with respect to such matter).
          ``(5) Application of this subsection.--This 
        subsection shall apply with respect to any action--
                  ``(A) against any taxpayer, but in the case 
                of any individual, only if such individual's 
                gross income exceeds $200,000 for any taxable 
                year subject to such action, and
                  ``(B) if the tax, penalties, interest, 
                additions to tax, and additional amounts in 
                dispute exceed $2,000,000.
          ``(6) Additional rules.--
                  ``(A) No contract necessary.--No contract 
                with the Internal Revenue Service is necessary 
                for any individual to receive an award under 
                this subsection.
                  ``(B) Representation.--Any individual 
                described in paragraph (1) or (2) may be 
                represented by counsel.
                  ``(C) Submission of information.--No award 
                may be made under this subsection based on 
                information submitted to the Secretary unless 
                such information is submitted under penalty of 
                perjury.''.
          (2) Assignment to special trial judges.--
                  (A) In general.--Section 7443A(b) (relating 
                to proceedings which may be assigned to special 
                trial judges) is amended by striking ``and'' at 
                the end of paragraph (5), by redesignating 
                paragraph (6) as paragraph (7), and by 
                inserting after paragraph (5) the following new 
                paragraph:
          ``(6) any proceeding under section 7623(b)(4), and''.
                  (B) Conforming amendment.--Section 7443A(c) 
                is amended by striking ``or (5)'' and inserting 
                ``(5), or (6)''.
          (3) Deduction allowed whether or not taxpayer 
        itemizes.--Subsection (a) of section 62 (relating to 
        general rule defining adjusted gross income) is amended 
        by inserting after paragraph (20) the following new 
        paragraph:
          ``(21) Attorneys fees relating to awards to 
        whistleblowers.--Any deduction allowable under this 
        chapter for attorney fees and court costs paid by, or 
        on behalf of, the taxpayer in connection with any award 
        under section 7623(b) (relating to awards to 
        whistleblowers). The preceding sentence shall not apply 
        to any deduction in excess of the amount includible in 
        the taxpayer's gross income for the taxable year on 
        account of such award.''.
  (b) Whistleblower Office.--
          (1) In general.--Not later than the date which is 12 
        months after the date of the enactment of this Act, the 
        Secretary of the Treasury shall issue guidance for the 
        operation of a whistleblower program to be administered 
        in the Internal Revenue Service by an office to be 
        known as the ``Whistleblower Office'' which--
                  (A) shall at all times operate at the 
                direction of the Commissioner of Internal 
                Revenue and coordinate and consult with other 
                divisions in the Internal Revenue Service as 
                directed by the Commissioner of Internal 
                Revenue,
                  (B) shall analyze information received from 
                any individual described in section 7623(b) of 
                the Internal Revenue Code of 1986 and either 
                investigate the matter itself or assign it to 
                the appropriate Internal Revenue Service 
                office, and
                  (C) in its sole discretion, may ask for 
                additional assistance from such individual or 
                any legal representative of such individual.
          (2) Request for assistance.--The guidance issued 
        under paragraph (1) shall specify that any assistance 
        requested under paragraph (1)(C) shall be under the 
        direction and control of the Whistleblower Office or 
        the office assigned to investigate the matter under 
        paragraph (1)(A). No individual or legal representative 
        whose assistance is so requested may by reason of such 
        request represent himself or herself as an employee of 
        the Federal Government.
  (c) Report by Secretary.--The Secretary of the Treasury shall 
each year conduct a study and report to Congress on the use of 
section 7623 of the Internal Revenue Code of 1986, including--
          (1) an analysis of the use of such section during the 
        preceding year and the results of such use, and
          (2) any legislative or administrative recommendations 
        regarding the provisions of such section and its 
        application.
  (d) Effective Date.--The amendments made by subsection (a) 
shall apply to information provided on or after the date of the 
enactment of this Act.

SEC. 407. FRIVOLOUS TAX SUBMISSIONS.

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

``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

  ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
shall pay a penalty of $5,000 if--
          ``(1) such person files what purports to be a return 
        of a tax imposed by this title but which--
                  ``(A) does not contain information on which 
                the substantial correctness of the self-
                assessment may be judged, or
                  ``(B) contains information that on its face 
                indicates that the self-assessment is 
                substantially incorrect, and
          ``(2) the conduct referred to in paragraph (1)--
                  ``(A) is based on a position which the 
                Secretary has identified as frivolous under 
                subsection (c), or
                  ``(B) reflects a desire to delay or impede 
                the administration of Federal tax laws.
  ``(b) Civil Penalty for Specified Frivolous Submissions.--
          ``(1) Imposition of penalty.--Except as provided in 
        paragraph (3), any person who submits a specified 
        frivolous submission shall pay a penalty of $5,000.
          ``(2) Specified frivolous submission.--For purposes 
        of this section--
                  ``(A) Specified frivolous submission.--The 
                term `specified frivolous submission' means a 
                specified submission if any portion of such 
                submission--
                          ``(i) is based on a position which 
                        the Secretary has identified as 
                        frivolous under subsection (c), or
                          ``(ii) reflects a desire to delay or 
                        impede the administration of Federal 
                        tax laws.
                  ``(B) Specified submission.--The term 
                `specified submission' means--
                          ``(i) a request for a hearing under--
                                  ``(I) section 6320 (relating 
                                to notice and opportunity for 
                                hearing upon filing of notice 
                                of lien), or
                                  ``(II) section 6330 (relating 
                                to notice and opportunity for 
                                hearing before levy), and
                          ``(ii) an application under--
                                  ``(I) section 6159 (relating 
                                to agreements for payment of 
                                tax liability in installments),
                                  ``(II) section 7122 (relating 
                                to compromises), or
                                  ``(III) section 7811 
                                (relating to taxpayer 
                                assistance orders).
          ``(3) Opportunity to withdraw submission.--If the 
        Secretary provides a person with notice that a 
        submission is a specified frivolous submission and such 
        person withdraws such submission within 30 days after 
        such notice, the penalty imposed under paragraph (1) 
        shall not apply with respect to such submission.
  ``(c) Listing of Frivolous Positions.--The Secretary shall 
prescribe (and periodically revise) a list of positions which 
the Secretary has identified as being frivolous for purposes of 
this subsection. The Secretary shall not include in such list 
any position that the Secretary determines meets the 
requirement of section 6662(d)(2)(B)(ii)(II).
  ``(d) Reduction of Penalty.--The Secretary may reduce the 
amount of any penalty imposed under this section if the 
Secretary determines that such reduction would promote 
compliance with and administration of the Federal tax laws.
  ``(e) Penalties in Addition to Other Penalties.--The 
penalties imposed by this section shall be in addition to any 
other penalty provided by law.''.
  (b) Treatment of Frivolous Requests for Hearings Before 
Levy.--
          (1) Frivolous requests disregarded.--Section 6330 
        (relating to notice and opportunity for hearing before 
        levy) is amended by adding at the end the following new 
        subsection:
  ``(g) Frivolous Requests for Hearing, etc.--Notwithstanding 
any other provision of this section, if the Secretary 
determines that any portion of a request for a hearing under 
this section or section 6320 meets the requirement of clause 
(i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
treat such portion as if it were never submitted and such 
portion shall not be subject to any further administrative or 
judicial review.''.
          (2) Preclusion from raising frivolous issues at 
        hearing.--Section 6330(c)(4) is amended--
                  (A) by striking ``(A)'' and inserting 
                ``(A)(i)'';
                  (B) by striking ``(B)'' and inserting 
                ``(ii)'';
                  (C) by striking the period at the end of the 
                first sentence and inserting ``; or''; and
                  (D) by inserting after subparagraph (A)(ii) 
                (as so redesignated) the following:
                  ``(B) the issue meets the requirement of 
                clause (i) or (ii) of section 6702(b)(2)(A).''.
          (3) Statement of grounds.--Section 6330(b)(1) is 
        amended by striking ``under subsection (a)(3)(B)'' and 
        inserting ``in writing under subsection (a)(3)(B) and 
        states the grounds for the requested hearing''.
  (c) Treatment of Frivolous Requests for Hearings Upon Filing 
of Notice of Lien.--Section 6320 is amended--
          (1) in subsection (b)(1), by striking ``under 
        subsection (a)(3)(B)'' and inserting ``in writing under 
        subsection (a)(3)(B) and states the grounds for the 
        requested hearing'', and
          (2) in subsection (c), by striking ``and (e)'' and 
        inserting ``(e), and (g)''.
  (d) Treatment of Frivolous Applications for Offers-in-
Compromise and Installment Agreements.--Section 7122 is amended 
by adding at the end the following new subsection:
  ``(f) Frivolous Submissions, etc.--Notwithstanding any other 
provision of this section, if the Secretary determines that any 
portion of an application for an offer-in-compromise or 
installment agreement submitted under this section or section 
6159 meets the requirement of clause (i) or (ii) of section 
6702(b)(2)(A), then the Secretary may treat such portion as if 
it were never submitted and such portion shall not be subject 
to any further administrative or judicial review.''.
  (e) Clerical Amendment.--The table of sections for part I of 
subchapter B of chapter 68 is amended by striking the item 
relating to section 6702 and inserting the following new item:

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

SEC. 408. ADDITION OF MENINGOCOCCAL AND HUMAN PAPILLOMAVIRUS VACCINES 
                    TO LIST OF TAXABLE VACCINES.

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

SEC. 409. CLARIFICATION OF TAXATION OF CERTAIN SETTLEMENT FUNDS MADE 
                    PERMANENT.

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

SEC. 410. MODIFICATION OF ACTIVE BUSINESS DEFINITION UNDER SECTION 355 
                    MADE PERMANENT.

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

SEC. 411. REVISION OF STATE VETERANS LIMIT MADE PERMANENT.

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

SEC. 412. CAPITAL GAINS TREATMENT FOR CERTAIN SELF-CREATED MUSICAL 
                    WORKS MADE PERMANENT.

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

SEC. 413. REDUCTION IN MINIMUM VESSEL TONNAGE WHICH QUALIFIES FOR 
                    TONNAGE TAX MADE PERMANENT.

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

SEC. 414. MODIFICATION OF SPECIAL ARBITRAGE RULE FOR CERTAIN FUNDS MADE 
                    PERMANENT.

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

SEC. 415. GREAT LAKES DOMESTIC SHIPPING TO NOT DISQUALIFY VESSEL FROM 
                    TONNAGE TAX.

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

SEC. 416. USE OF QUALIFIED MORTGAGE BONDS TO FINANCE RESIDENCES FOR 
                    VETERANS WITHOUT REGARD TO FIRST-TIME HOMEBUYER 
                    REQUIREMENT.

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

SEC. 417. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL RESIDENCE BY 
                    CERTAIN EMPLOYEES OF THE INTELLIGENCE COMMUNITY.

  (a) In General.--Subparagraph (A) of section 121(d)(9) 
(relating to exclusion of gain from sale of principal 
residence) is amended by striking ``duty'' and all that follows 
and inserting ``duty--
                          ``(i) as a member of the uniformed 
                        services,
                          ``(ii) as a member of the Foreign 
                        Service of the United States, or
                          ``(iii) as an employee of the 
                        intelligence community.''.
  (b) Employee of Intelligence Community Defined.--Subparagraph 
(C) of section 121(d)(9) is amended by redesignating clause 
(iv) as clause (v) and by inserting after clause (iii) the 
following new clause:
                          ``(iv) Employee of intelligence 
                        community.--The term `employee of the 
                        intelligence community' means an 
                        employee (as defined by section 2105 of 
                        title 5, United States Code) of--
                                  ``(I) the Office of the 
                                Director of National 
                                Intelligence,
                                  ``(II) the Central 
                                Intelligence Agency,
                                  ``(III) the National Security 
                                Agency,
                                  ``(IV) the Defense 
                                Intelligence Agency,
                                  ``(V) the National 
                                Geospatial-Intelligence Agency,
                                  ``(VI) the National 
                                Reconnaissance Office,
                                  ``(VII) any other office 
                                within the Department of 
                                Defense for the collection of 
                                specialized national 
                                intelligence through 
                                reconnaissance programs,
                                  ``(VIII) any of the 
                                intelligence elements of the 
                                Army, the Navy, the Air Force, 
                                the Marine Corps, the Federal 
                                Bureau of Investigation, the 
                                Department of Treasury, the 
                                Department of Energy, and the 
                                Coast Guard,
                                  ``(IX) the Bureau of 
                                Intelligence and Research of 
                                the Department of State, or
                                  ``(X) any of the elements of 
                                the Department of Homeland 
                                Security concerned with the 
                                analyses of foreign 
                                intelligence information.''.
  (c) Special Rule.--Subparagraph (C) of section 121(d)(9), as 
amended by subsection (b), is amended by adding at the end the 
following new clause:
                          ``(vi) Special rule relating to 
                        intelligence community.--An employee of 
                        the intelligence community shall not be 
                        treated as serving on qualified 
                        extended duty unless such duty is at a 
                        duty station located outside the United 
                        States.''.
  (d) Conforming Amendment.--The heading for section 121(d)(9) 
is amended to read as follows: ``Uniformed services, foreign 
service, and intelligence community''.
  (e) Effective Date.--The amendments made by this section 
shall apply to sales or exchanges after the date of the 
enactment of this Act and before January 1, 2011.

SEC. 418. SALE OF PROPERTY BY JUDICIAL OFFICERS.

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

SEC. 419. PREMIUMS FOR MORTGAGE INSURANCE.

  (a) In General.--Section 163(h)(3) (relating to qualified 
residence interest) is amended by adding at the end the 
following new subparagraph:
                  ``(E) Mortgage insurance premiums treated as 
                interest.--
                          ``(i) In general.--Premiums paid or 
                        accrued for qualified mortgage 
                        insurance by a taxpayer during the 
                        taxable year in connection with 
                        acquisition indebtedness with respect 
                        to a qualified residence of the 
                        taxpayer shall be treated for purposes 
                        of this section as interest which is 
                        qualified residence interest.
                          ``(ii) Phaseout.--The amount 
                        otherwise treated as interest under 
                        clause (i) shall be reduced (but not 
                        below zero) by 10 percent of such 
                        amount for each $1,000 ($500 in the 
                        case of a married individual filing a 
                        separate return) (or fraction thereof) 
                        that the taxpayer's adjusted gross 
                        income for the taxable year exceeds 
                        $100,000 ($50,000 in the case of a 
                        married individual filing a separate 
                        return).
                          ``(iii) Limitation.--Clause (i) shall 
                        not apply with respect to any mortgage 
                        insurance contracts issued before 
                        January 1, 2007.
                          ``(iv) Termination.--Clause (i) shall 
                        not apply to amounts--
                                  ``(I) paid or accrued after 
                                December 31, 2007, or
                                  ``(II) properly allocable to 
                                any period after such date.''.
  (b) Definition and Special Rules.--Section 163(h)(4) 
(relating to other definitions and special rules) is amended by 
adding at the end the following new subparagraphs:
                  ``(E) Qualified mortgage insurance.--The term 
                `qualified mortgage insurance' means--
                          ``(i) mortgage insurance provided by 
                        the Veterans Administration, the 
                        Federal Housing Administration, or the 
                        Rural Housing Administration, and
                          ``(ii) private mortgage insurance (as 
                        defined by section 2 of the Homeowners 
                        Protection Act of 1998 (12 U.S.C. 
                        4901), as in effect on the date of the 
                        enactment of this subparagraph).
                  ``(F) Special rules for prepaid qualified 
                mortgage insurance.--Any amount paid by the 
                taxpayer for qualified mortgage insurance that 
                is properly allocable to any mortgage the 
                payment of which extends to periods that are 
                after the close of the taxable year in which 
                such amount is paid shall be chargeable to 
                capital account and shall be treated as paid in 
                such periods to which so allocated. No 
                deduction shall be allowed for the unamortized 
                balance of such account if such mortgage is 
                satisfied before the end of its term. The 
                preceding sentences shall not apply to amounts 
                paid for qualified mortgage insurance provided 
                by the Veterans Administration or the Rural 
                Housing Administration.''.
  (c) Information Returns Relating to Mortgage Insurance.--
Section 6050H (relating to returns relating to mortgage 
interest received in trade or business from individuals) is 
amended by adding at the end the following new subsection:
  ``(h) Returns Relating to Mortgage Insurance Premiums.--
          ``(1) In general.--The Secretary may prescribe, by 
        regulations, that any person who, in the course of a 
        trade or business, receives from any individual 
        premiums for mortgage insurance aggregating $600 or 
        more for any calendar year, shall make a return with 
        respect to each such individual. Such return shall be 
        in such form, shall be made at such time, and shall 
        contain such information as the Secretary may 
        prescribe.
          ``(2) Statement to be furnished to individuals with 
        respect to whom information is required.--Every person 
        required to make a return under paragraph (1) shall 
        furnish to each individual with respect to whom a 
        return is made a written statement showing such 
        information as the Secretary may prescribe. Such 
        written statement shall be furnished on or before 
        January 31 of the year following the calendar year for 
        which the return under paragraph (1) was required to be 
        made.
          ``(3) Special rules.--For purposes of this 
        subsection--
                  ``(A) rules similar to the rules of 
                subsection (c) shall apply, and
                  ``(B) the term `mortgage insurance' means--
                          ``(i) mortgage insurance provided by 
                        the Veterans Administration, the 
                        Federal Housing Administration, or the 
                        Rural Housing Administration, and
                          ``(ii) private mortgage insurance (as 
                        defined by section 2 of the Homeowners 
                        Protection Act of 1998 (12 U.S.C. 
                        4901), as in effect on the date of the 
                        enactment of this subsection).''.
  (d) Effective Date.--The amendments made by this section 
shall apply to amounts paid or accrued after December 31, 2006.

SEC. 420. MODIFICATION OF REFUNDS FOR KEROSENE USED IN AVIATION.

  (a) In General.--Paragraph (4) of section 6427(l) (relating 
to nontaxable uses of diesel fuel and kerosene) is amended to 
read as follows:
          ``(4) Refunds for kerosene used in aviation.--
                  ``(A) Kerosene used in commercial aviation.--
                In the case of kerosene used in commercial 
                aviation (as defined in section 4083(b)) (other 
                than supplies for vessels or aircraft within 
                the meaning of section 4221(d)(3)), paragraph 
                (1) shall not apply to so much of the tax 
                imposed by section 4041 or 4081, as the case 
                may be, as is attributable to--
                          ``(i) the Leaking Underground Storage 
                        Tank Trust Fund financing rate imposed 
                        by such section, and
                          ``(ii) so much of the rate of tax 
                        specified in section 4041(c) or 
                        4081(a)(2)(A)(iii), as the case may be, 
                        as does not exceed 4.3 cents per 
                        gallon.
                  ``(B) Kerosene used in noncommercial 
                aviation.--In the case of kerosene used in 
                aviation that is not commercial aviation (as so 
                defined) (other than any use which is exempt 
                from the tax imposed by section 4041(c) other 
                than by reason of a prior imposition of tax), 
                paragraph (1) shall not apply to--
                          ``(i) any tax imposed by subsection 
                        (c) or (d)(2) of section 4041, and
                          ``(ii) so much of the tax imposed by 
                        section 4081 as is attributable to--
                                  ``(I) the Leaking Underground 
                                Storage Tank Trust Fund 
                                financing rate imposed by such 
                                section, and
                                  ``(II) so much of the rate of 
                                tax specified in section 
                                4081(a)(2)(A)(iii) as does not 
                                exceed the rate specified in 
                                section 4081(a)(2)(C)(ii).
                  ``(C) Payments to ultimate, registered 
                vendor.--
                          ``(i) In general.--With respect to 
                        any kerosene used in aviation (other 
                        than kerosene described in clause (ii) 
                        or kerosene to which paragraph (5) 
                        applies), if the ultimate purchaser of 
                        such kerosene waives (at such time and 
                        in such form and manner as the 
                        Secretary shall prescribe) the right to 
                        payment under paragraph (1) and assigns 
                        such right to the ultimate vendor, then 
                        the Secretary shall pay the amount 
                        which would be paid under paragraph (1) 
                        to such ultimate vendor, but only if 
                        such ultimate vendor--
                                  ``(I) is registered under 
                                section 4101, and
                                  ``(II) meets the requirements 
                                of subparagraph (A), (B), or 
                                (D) of section 6416(a)(1).
                          ``(ii) Payments for kerosene used in 
                        noncommercial aviation.--The amount 
                        which would be paid under paragraph (1) 
                        with respect to any kerosene to which 
                        subparagraph (B) applies shall be paid 
                        only to the ultimate vendor of such 
                        kerosene. A payment shall be made to 
                        such vendor if such vendor--
                                  ``(I) is registered under 
                                section 4101, and
                                  ``(II) meets the requirements 
                                of subparagraph (A), (B), or 
                                (D) of section 6416(a)(1).''.
  (b) Conforming Amendments.--
          (1) Section 6427(l) is amended by striking paragraph 
        (5) and by redesignating paragraph (6) as paragraph 
        (5).
          (2) Section 4082(d)(2)(B) is amended by striking 
        ``section 6427(l)(6)(B)'' and inserting ``section 
        6427(l)(5)(B)''.
          (3) Section 6427(i)(4)(A) is amended--
                  (A) by striking ``paragraph (4)(B), (5), or 
                (6)'' each place it appears and inserting 
                ``paragraph (4)(C) or (5)'', and
                  (B) by striking ``(l)(5), and (l)(6)'' and 
                inserting ``(l)(4)(C)(ii), and (l)(5)''.
          (4) Section 6427(l)(1) is amended by striking 
        ``paragraph (4)(B)'' and inserting ``paragraph 
        (4)(C)(i)''.
          (5) Section 9502(d) is amended--
                  (A) in paragraph (2), by striking ``and 
                (l)(5)'', and
                  (B) in paragraph (3), by striking ``or (5)''.
          (6) Section 9503(c)(7) is amended--
                  (A) by amending subparagraphs (A) and (B) to 
                read as follows:
                  ``(A) 4.3 cents per gallon of kerosene 
                subject to section 6427(l)(4)(A) with respect 
                to which a payment has been made by the 
                Secretary under section 6427(l), and
                  ``(B) 21.8 cents per gallon of kerosene 
                subject to section 6427(l)(4)(B) with respect 
                to which a payment has been made by the 
                Secretary under section 6427(l).'', and
                  (B) in the matter following subparagraph (B), 
                by striking ``or (5)''.
  (c) Effective Date.--
          (1) In general.--The amendments made by this section 
        shall apply to kerosene sold after September 30, 2005.
          (2) Special rule for pending claims.--In the case of 
        kerosene sold for use in aviation (other than kerosene 
        to which section 6427(l)(4)(C)(ii) of the Internal 
        Revenue Code of 1986 (as added by subsection (a)) 
        applies or kerosene to which section 6427(l)(5) of such 
        Code (as redesignated by subsection (b)) applies) after 
        September 30, 2005, and before the date of the 
        enactment of this Act, the ultimate purchaser shall be 
        treated as having waived the right to payment under 
        section 6427(l)(1) of such Code and as having assigned 
        such right to the ultimate vendor if such ultimate 
        vendor has met the requirements of subparagraph (A), 
        (B), or (D) of section 6416(a)(1) of such Code.
  (d) Special Rule for Kerosene Used in Aviation on a Farm for 
Farming Purposes.--
          (1) Refunds for purchases after december 31, 2004, 
        and before october 1, 2005.--The Secretary of the 
        Treasury shall pay to the ultimate purchaser of any 
        kerosene which is used in aviation on a farm for 
        farming purposes and which was purchased after December 
        31, 2004, and before October 1, 2005, an amount equal 
        to the aggregate amount of tax imposed on such fuel 
        under section 4041 or 4081 of the Internal Revenue Code 
        of 1986, as the case may be, reduced by any payment to 
        the ultimate vendor under section 6427(l)(5)(C) of such 
        Code (as in effect on the day before the date of the 
        enactment of the Safe, Accountable, Flexible, Efficient 
        Transportation Equity Act: a Legacy for Users).
          (2) Use on a farm for farming purposes.--For purposes 
        of paragraph (1), kerosene shall be treated as used on 
        a farm for farming purposes if such kerosene is used 
        for farming purposes (within the meaning of section 
        6420(c)(3) of the Internal Revenue Code of 1986) in 
        carrying on a trade or business on a farm situated in 
        the United States. For purposes of the preceding 
        sentence, rules similar to the rules of section 
        6420(c)(4) of such Code shall apply.
          (3) Time for filing claims.--No claim shall be 
        allowed under paragraph (1) unless the ultimate 
        purchaser files such claim before the date that is 3 
        months after the date of the enactment of this Act.
          (4) No double benefit.--No amount shall be paid under 
        paragraph (1) or section 6427(l) of the Internal 
        Revenue Code of 1986 with respect to any kerosene 
        described in paragraph (1) to the extent that such 
        amount is in excess of the tax imposed on such kerosene 
        under section 4041 or 4081 of such Code, as the case 
        may be.
          (5) Applicable laws.--For purposes of this 
        subsection, rules similar to the rules of section 
        6427(j) of the Internal Revenue Code of 1986 shall 
        apply.

SEC. 421. REGIONAL INCOME TAX AGENCIES TREATED AS STATES FOR PURPOSES 
                    OF CONFIDENTIALITY AND DISCLOSURE REQUIREMENTS.

  (a) In General.--Paragraph (5) of section 6103(b) is amended 
to read as follows:
          ``(5) State.--
                  ``(A) In general.--The term `State' means--
                          ``(i) any of the 50 States, the 
                        District of Columbia, the Commonwealth 
                        of Puerto Rico, the Virgin Islands, the 
                        Canal Zone, Guam, American Samoa, and 
                        the Commonwealth of the Northern 
                        Mariana Islands,
                          ``(ii) for purposes of subsections 
                        (a)(2), (b)(4), (d)(1), (h)(4), and 
                        (p), any municipality--
                                  ``(I) with a population in 
                                excess of 250,000 (as 
                                determined under the most 
                                recent decennial United States 
                                census data available),
                                  ``(II) which imposes a tax on 
                                income or wages, and
                                  ``(III) with which the 
                                Secretary (in his sole 
                                discretion) has entered into an 
                                agreement regarding disclosure, 
                                and
                          ``(iii) for purposes of subsections 
                        (a)(2), (b)(4), (d)(1), (h)(4), and 
                        (p), any governmental entity--
                                  ``(I) which is formed and 
                                operated by a qualified group 
                                of municipalities, and
                                  ``(II) with which the 
                                Secretary (in his sole 
                                discretion) has entered into an 
                                agreement regarding disclosure.
                  ``(B) Regional income tax agencies.--For 
                purposes of subparagraph (A)(iii)--
                          ``(i) Qualified group of 
                        municipalities.--The term `qualified 
                        group of municipalities' means, with 
                        respect to any governmental entity, 2 
                        or more municipalities--
                                  ``(I) each of which imposes a 
                                tax on income or wages,
                                  ``(II) each of which, under 
                                the authority of a State 
                                statute, administers the laws 
                                relating to the imposition of 
                                such taxes through such entity, 
                                and
                                  ``(III) which collectively 
                                have a population in excess of 
                                250,000 (as determined under 
                                the most recent decennial 
                                United States census data 
                                available).
                          ``(ii) References to state law, 
                        etc.--For purposes of applying 
                        subparagraph (A)(iii) to the 
                        subsections referred to in such 
                        subparagraph, any reference in such 
                        subsections to State law, proceedings, 
                        or tax returns shall be treated as 
                        references to the law, proceedings, or 
                        tax returns, as the case may be, of the 
                        municipalities which form and operate 
                        the governmental entity referred to in 
                        such subparagraph.
                          ``(iii) Disclosure to contractors and 
                        other agents.--Notwithstanding any 
                        other provision of this section, no 
                        return or return information shall be 
                        disclosed to any contractor or other 
                        agent of a governmental entity referred 
                        to in subparagraph (A)(iii) unless such 
                        entity, to the satisfaction of the 
                        Secretary--
                                  ``(I) has requirements in 
                                effect which require each such 
                                contractor or other agent which 
                                would have access to returns or 
                                return information to provide 
                                safeguards (within the meaning 
                                of subsection (p)(4)) to 
                                protect the confidentiality of 
                                such returns or return 
                                information,
                                  ``(II) agrees to conduct an 
                                on-site review every 3 years 
                                (or a mid-point review in the 
                                case of contracts or agreements 
                                of less than 3 years in 
                                duration) of each contractor or 
                                other agent to determine 
                                compliance with such 
                                requirements,
                                  ``(III) submits the findings 
                                of the most recent review 
                                conducted under subclause (II) 
                                to the Secretary as part of the 
                                report required by subsection 
                                (p)(4)(E), and
                                  ``(IV) certifies to the 
                                Secretary for the most recent 
                                annual period that such 
                                contractor or other agent is in 
                                compliance with all such 
                                requirements.
                        The certification required by subclause 
                        (IV) shall include the name and address 
                        of each contractor and other agent, a 
                        description of the contract or 
                        agreement with such contractor or other 
                        agent, and the duration of such 
                        contract or agreement. The requirements 
                        of this clause shall not apply to 
                        disclosures pursuant to subsection (n) 
                        for purposes of Federal tax 
                        administration and a rule similar to 
                        the rule of subsection (p)(8)(B) shall 
                        apply for purposes of this clause.''.
  (b) Special Rules for Disclosure.--Subsection (d) of section 
6103 is amended by adding at the end the following new 
paragraph:
          ``(6) Limitation on disclosure regarding regional 
        income tax agencies treated as states.--For purposes of 
        paragraph (1), inspection by or disclosure to an entity 
        described in subsection (b)(5)(A)(iii) shall be for the 
        purpose of, and only to the extent necessary in, the 
        administration of the laws of the member municipalities 
        in such entity relating to the imposition of a tax on 
        income or wages. Such entity may not redisclose any 
        return or return information received pursuant to 
        paragraph (1) to any such member municipality.''.
  (c) Effective Date.--The amendments made by this section 
shall apply to disclosures made after December 31, 2006.

SEC. 422. DESIGNATION OF WINES BY SEMI-GENERIC NAMES.

  (a) In General.--Subsection (c) of section 5388 (relating to 
use of semi-generic designations) is amended by adding at the 
end the following new paragraph:
          ``(3) Special rule for use of certain semi-generic 
        designations.--
                  ``(A) In general.--In the case of any wine to 
                which this paragraph applies--
                          ``(i) paragraph (1) shall not apply,
                          ``(ii) in the case of wine of the 
                        European Community, designations 
                        referred to in subparagraph (C)(i) may 
                        be used for such wine only if the 
                        requirement of subparagraph (B)(ii) is 
                        met, and
                          ``(iii) in the case any other wine 
                        bearing a brand name, or brand name and 
                        fanciful name, semi-generic 
                        designations may be used for such wine 
                        only if the requirements of clauses 
                        (i), (ii), and (iii) of subparagraph 
                        (B) are met.
                  ``(B) Requirements.--
                          ``(i) The requirement of this clause 
                        is met if there appears in direct 
                        conjunction with the semi-generic 
                        designation an appropriate appellation 
                        of origin disclosing the origin of the 
                        wine.
                          ``(ii) The requirement of this clause 
                        is met if the wine conforms to the 
                        standard of identity, if any, for such 
                        wine contained in the regulations under 
                        this section or, if there is no such 
                        standard, to the trade understanding of 
                        such class or type.
                          ``(iii) The requirement of this 
                        clause is met if the person, or its 
                        successor in interest, using the semi-
                        generic designation held a Certificate 
                        of Label Approval or Certificate of 
                        Exemption from Label Approval issued by 
                        the Secretary for a wine label bearing 
                        such brand name, or brand name and 
                        fanciful name, before March 10, 2006, 
                        on which such semi-generic designation 
                        appeared.
                  ``(C) Wines to which paragraph applies.--
                          ``(i) In general.--Except as provided 
                        in clause (ii), this paragraph shall 
                        apply to any grape wine which is 
                        designated as Burgundy, Claret, 
                        Chablis, Champagne, Chianti, Malaga, 
                        Marsala, Madeira, Moselle, Port, 
                        Retsina, Rhine Wine or Hock, Sauterne, 
                        Haut Sauterne, Sherry, or Tokay.
                          ``(ii) Exception.--This paragraph 
                        shall not apply to wine which--
                                  ``(I) contains less than 7 
                                percent or more than 24 percent 
                                alcohol by volume,
                                  ``(II) is intended for sale 
                                outside the United States, or
                                  ``(III) does not bear a brand 
                                name.''.
  (b) Effective Date.--The amendments made by this section 
shall apply to wine imported or bottled in the United States on 
or after the date of enactment of this Act.

SEC. 423. MODIFICATION OF RAILROAD TRACK MAINTENANCE CREDIT.

  (a) In General.--Section 45G(d) (defining qualified railroad 
track maintenance expenditures) is amended--
          (1) by inserting ``gross'' after ``means'', and
          (2) by inserting ``(determined without regard to any 
        consideration for such expenditures given by the Class 
        II or Class III railroad which made the assignment of 
        such track)'' after ``Class II or Class III railroad''.
  (b) Effective Date.--The amendment made by this section shall 
take effect as if included in the amendment made by section 
245(a) of the American Jobs Creation Act of 2004.

SEC. 424. MODIFICATION OF EXCISE TAX ON UNRELATED BUSINESS TAXABLE 
                    INCOME OF CHARITABLE REMAINDER TRUSTS.

  (a) In General.--Subsection (c) of section 664 (relating to 
exemption from income taxes) is amended to read as follows:
  ``(c) Taxation of Trusts.--
          ``(1) Income tax.--A charitable remainder annuity 
        trust and a charitable remainder unitrust shall, for 
        any taxable year, not be subject to any tax imposed by 
        this subtitle.
          ``(2) Excise tax.--
                  ``(A) In general.--In the case of a 
                charitable remainder annuity trust or a 
                charitable remainder unitrust which has 
                unrelated business taxable income (within the 
                meaning of section 512, determined as if part 
                III of subchapter F applied to such trust) for 
                a taxable year, there is hereby imposed on such 
                trust or unitrust an excise tax equal to the 
                amount of such unrelated business taxable 
                income.
                  ``(B) Certain rules to apply.--The tax 
                imposed by subparagraph (A) shall be treated as 
                imposed by chapter 42 for purposes of this 
                title other than subchapter E of chapter 42.
                  ``(C) Tax court proceedings.--For purposes of 
                this paragraph, the references in section 
                6212(c)(1) to section 4940 shall be deemed to 
                include references to this paragraph.''.
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 425. LOANS TO QUALIFIED CONTINUING CARE FACILITIES MADE PERMANENT.

  (a) In General.--Subsection (h) of section 7872 (relating to 
exception for loans to qualified continuing care facilities) is 
amended by striking paragraph (4).
  (b) Effective Date.--The amendment made by this section shall 
take effect as if included in section 209 of the Tax Increase 
Prevention and Reconciliation Act of 2005.

SEC. 426. TECHNICAL CORRECTIONS.

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

            DIVISION B--MEDICARE AND OTHER HEALTH PROVISIONS

SEC. 1. SHORT TITLE OF DIVISION.

  This division may be cited as the ``Medicare Improvements and 
Extension Act of 2006''.

        TITLE I--MEDICARE IMPROVED QUALITY AND PROVIDER PAYMENTS

SEC. 101. PHYSICIAN PAYMENT AND QUALITY IMPROVEMENT.

  (a) One-Year Increase in Medicare Physician Fee Schedule 
Conversion Factor.--Section 1848(d) of the Social Security Act 
(42 U.S.C. 1395w-4(d)) is amended by adding at the end the 
following new paragraph:
          ``(7) Conversion factor for 2007.--
                  ``(A) In general.--The conversion factor that 
                would otherwise be applicable under this 
                subsection for 2007 shall be the amount of such 
                conversion factor divided by the product of--
                          ``(i) 1 plus the Secretary's estimate 
                        of the percentage increase in the MEI 
                        (as defined in section 1842(i)(3)) for 
                        2007 (divided by 100); and
                          ``(ii) 1 plus the Secretary's 
                        estimate of the update adjustment 
                        factor under paragraph (4)(B) for 2007.
                  ``(B) No effect on computation of conversion 
                factor for 2008.--The conversion factor under 
                this subsection shall be computed under 
                paragraph (1)(A) for 2008 as if subparagraph 
                (A) had never applied.''.
  (b) Quality Reporting System.--Section 1848 of the Social 
Security Act (42 U.S.C. 1395w-4) is amended by adding at the 
end the following new subsection:
  ``(k) Quality Reporting System.--
          ``(1) In general.--The Secretary shall implement a 
        system for the reporting by eligible professionals of 
        data on quality measures specified under paragraph (2). 
        Such data shall be submitted in a form and manner 
        specified by the Secretary (by program instruction or 
        otherwise), which may include submission of such data 
        on claims under this part.
          ``(2) Use of consensus-based quality measures.--
                  ``(A) For 2007.--
                          ``(i) In general.--For purposes of 
                        applying this subsection for the 
                        reporting of data on quality measures 
                        for covered professional services 
                        furnished during the period beginning 
                        July 1, 2007, and ending December 31, 
                        2007, the quality measures specified 
                        under this paragraph are the measures 
                        identified as 2007 physician quality 
                        measures under the Physician Voluntary 
                        Reporting Program as published on the 
                        public website of the Centers for 
                        Medicare & Medicaid Services as of the 
                        date of the enactment of this 
                        subsection, except as may be changed by 
                        the Secretary based on the results of a 
                        consensus-based process in January of 
                        2007, if such change is published on 
                        such website by not later than April 1, 
                        2007.
                          ``(ii) Subsequent refinements in 
                        application permitted.--The Secretary 
                        may, from time to time (but not later 
                        than July 1, 2007), publish on such 
                        website (without notice or opportunity 
                        for public comment) modifications or 
                        refinements (such as code additions, 
                        corrections, or revisions) for the 
                        application of quality measures 
                        previously published under clause (i), 
                        but may not, under this clause, change 
                        the quality measures under the 
                        reporting system.
                          ``(iii) Implementation.--
                        Notwithstanding any other provision of 
                        law, the Secretary may implement by 
                        program instruction or otherwise this 
                        subsection for 2007.
                  ``(B) For 2008.--
                          ``(i) In general.--For purposes of 
                        reporting data on quality measures for 
                        covered professional services furnished 
                        during 2008, the quality measures 
                        specified under this paragraph for 
                        covered professional services shall be 
                        measures that have been adopted or 
                        endorsed by a consensus organization 
                        (such as the National Quality Forum or 
                        AQA), that include measures that have 
                        been submitted by a physician 
                        specialty, and that the Secretary 
                        identifies as having used a consensus-
                        based process for developing such 
                        measures. Such measures shall include 
                        structural measures, such as the use of 
                        electronic health records and 
                        electronic prescribing technology.
                          ``(ii) Proposed set of measures.--Not 
                        later than August 15, 2007, the 
                        Secretary shall publish in the Federal 
                        Register a proposed set of quality 
                        measures that the Secretary determines 
                        are described in clause (i) and would 
                        be appropriate for eligible 
                        professionals to use to submit data to 
                        the Secretary in 2008. The Secretary 
                        shall provide for a period of public 
                        comment on such set of measures.
                          ``(iii) Final set of measures.--Not 
                        later than November 15, 2007, the 
                        Secretary shall publish in the Federal 
                        Register a final set of quality 
                        measures that the Secretary determines 
                        are described in clause (i) and would 
                        be appropriate for eligible 
                        professionals to use to submit data to 
                        the Secretary in 2008.
          ``(3) Covered professional services and eligible 
        professionals defined.--For purposes of this 
        subsection:
                  ``(A) Covered professional services.--The 
                term `covered professional services' means 
                services for which payment is made under, or is 
                based on, the fee schedule established under 
                this section and which are furnished by an 
                eligible professional.
                  ``(B) Eligible professional.--The term 
                `eligible professional' means any of the 
                following:
                          ``(i) A physician.
                          ``(ii) A practitioner described in 
                        section 1842(b)(18)(C).
                          ``(iii) A physical or occupational 
                        therapist or a qualified speech-
                        language pathologist.
          ``(4) Use of registry-based reporting.--As part of 
        the publication of proposed and final quality measures 
        for 2008 under clauses (ii) and (iii) of paragraph 
        (2)(B), the Secretary shall address a mechanism whereby 
        an eligible professional may provide data on quality 
        measures through an appropriate medical registry (such 
        as the Society of Thoracic Surgeons National Database), 
        as identified by the Secretary.
          ``(5) Identification units.--For purposes of applying 
        this subsection, the Secretary may identify eligible 
        professionals through billing units, which may include 
        the use of the Provider Identification Number, the 
        unique physician identification number (described in 
        section 1833(q)(1)), the taxpayer identification 
        number, or the National Provider Identifier. For 
        purposes of applying this subsection for 2007, the 
        Secretary shall use the taxpayer identification number 
        as the billing unit.
          ``(6) Education and outreach.--The Secretary shall 
        provide for education and outreach to eligible 
        professionals on the operation of this subsection.
          ``(7) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of the development and 
        implementation of the reporting system under paragraph 
        (1), including identification of quality measures under 
        paragraph (2) and the application of paragraphs (4) and 
        (5).
          ``(8) Implementation.--The Secretary shall carry out 
        this subsection acting through the Administrator of the 
        Centers for Medicare & Medicaid Services.''.
  (c) Transitional Bonus Incentive Payments for Quality 
Reporting in 2007.--
          (1) In general.--With respect to covered professional 
        services furnished during a reporting period (as 
        defined in paragraph (6)(C)) by an eligible 
        professional, if--
                  (A) there are any quality measures that have 
                been established under the physician reporting 
                system that are applicable to any such services 
                furnished by such professional for such period, 
                and
                  (B) the eligible professional satisfactorily 
                submits (as determined under paragraph (2)) to 
                the Secretary data on such quality measures in 
                accordance with such reporting system for such 
                reporting period,
        in addition to the amount otherwise paid under part B 
        of title XVIII of the Social Security Act, subject to 
        paragraph (3), there also shall be paid to the eligible 
        professional (or to an employer or facility in the 
        cases described in clause (A) of section 1842(b)(6) of 
        the Social Security Act (42 U.S.C. 1395u(b)(6))) from 
        the Federal Supplementary Medical Insurance Trust Fund 
        established under section 1841 of such Act (42 U.S.C. 
        1395t) an amount equal to 1.5 percent of the 
        Secretary's estimate (based on claims submitted not 
        later than two months after the end of the reporting 
        period) of the allowed charges under such part for all 
        such covered professional services furnished during the 
        reporting period.
          (2) Satisfactory reporting described.--For purposes 
        of paragraph (1), an eligible professional shall be 
        treated as satisfactorily submitting data on quality 
        measures for covered professional services for a 
        reporting period if quality measures have been reported 
        as follows:
                  (A) Three or fewer quality measures 
                applicable.--If there are no more than 3 
                quality measures that are provided under the 
                physician reporting system and that are 
                applicable to such services of such 
                professional furnished during the period, each 
                such quality measure has been reported under 
                such system in at least 80 percent of the cases 
                in which such measure is reportable under the 
                system.
                  (B) Four or more quality measures 
                applicable.--If there are 4 or more quality 
                measures that are provided under the physician 
                reporting system and that are applicable to 
                such services of such professional furnished 
                during the period, at least 3 such quality 
                measures have been reported under such system 
                in at least 80 percent of the cases in which 
                the respective measure is reportable under the 
                system.
          (3) Payment limitation.--
                  (A) In general.--In no case shall the total 
                payment made under this subsection to an 
                eligible professional (or to an employer or 
                facility in the cases described in clause (A) 
                of section 1842(b)(6) of the Social Security 
                Act) exceed the product of--
                          (i) the total number of quality 
                        measures for which data are submitted 
                        under the physician reporting system 
                        for covered professional services of 
                        such professional that are furnished 
                        during the reporting period; and
                          (ii) 300 percent of the average per 
                        measure payment amount specified in 
                        subparagraph (B).
                  (B) Average per measure payment amount 
                specified.--The average per measure payment 
                amount specified in this subparagraph is an 
                amount, estimated by the Secretary (based on 
                claims submitted not later than two months 
                after the end of the reporting period), equal 
                to--
                          (i) the total of the amount of 
                        allowed charges under part B of title 
                        XVIII of the Social Security Act for 
                        all covered professional services 
                        furnished during the reporting period 
                        on claims for which quality measures 
                        are reported under the physician 
                        reporting system; divided by
                          (ii) the total number of quality 
                        measures for which data are reported 
                        under such system for covered 
                        professional services furnished during 
                        the reporting period.
          (4) Form of payment.--The payment under this 
        subsection shall be in the form of a single 
        consolidated payment.
          (5) Application.--
                  (A) Physician reporting system rules.--
                Paragraphs (5), (6), and (8) of section 1848(k) 
                of the Social Security Act, as added by 
                subsection (b), shall apply for purposes of 
                this subsection in the same manner as they 
                apply for purposes of such section.
                  (B) Coordination with other bonus payments.--
                The provisions of this subsection shall not be 
                taken into account in applying subsections (m) 
                and (u) of section 1833 of the Social Security 
                Act (42 U.S.C. 1395l) and any payment under 
                such subsections shall not be taken into 
                account in computing allowable charges under 
                this subsection.
                  (C) Implementation.--Notwithstanding any 
                other provision of law, the Secretary may 
                implement by program instruction or otherwise 
                this subsection.
                  (D) Validation.--
                          (i) In general.--Subject to the 
                        succeeding provisions of this 
                        subparagraph, for purposes of 
                        determining whether a measure is 
                        applicable to the covered professional 
                        services of an eligible professional 
                        under paragraph (2), the Secretary 
                        shall presume that if an eligible 
                        professional submits data for a 
                        measure, such measure is applicable to 
                        such professional.
                          (ii) Method.-- The Secretary shall 
                        validate (by sampling or other means as 
                        the Secretary determines to be 
                        appropriate) whether measures 
                        applicable to covered professional 
                        services of an eligible professional 
                        have been reported.
                          (iii) Denial of payment authority.--
                        If the Secretary determines that an 
                        eligible professional has not reported 
                        measures applicable to covered 
                        professional services of such 
                        professional, the Secretary shall not 
                        pay the bonus incentive payment.
                  (E) Limitations on review.--
                          (i) In general.--There shall be no 
                        administrative or judicial review under 
                        section 1869 or 1878 of the Social 
                        Security Act or otherwise of--
                                  (I) the determination of 
                                measures applicable to services 
                                furnished by eligible 
                                professionals under this 
                                subsection;
                                  (II) the determination of 
                                satisfactory reporting under 
                                paragraph (2);
                                  (III) the determination of 
                                the payment limitation under 
                                paragraph (3); and
                                  (IV) the determination of the 
                                bonus incentive payment under 
                                this subsection.
                          (ii) Treatment of determinations.--A 
                        determination under this subsection 
                        shall not be treated as a determination 
                        for purposes of section 1869 of the 
                        Social Security Act.
          (6) Definitions.--For purposes of this subsection:
                  (A) Eligible professional; covered 
                professional services.--The terms ``eligible 
                professional'' and ``covered professional 
                services'' have the meanings given such terms 
                in section 1848(k)(3) of the Social Security 
                Act, as added by subsection (b).
                  (B) Physician reporting system.--The term 
                ``physician reporting system'' means the system 
                established under section 1848(k) of the Social 
                Security Act, as added by subsection (b).
                  (C) Reporting period.--The term ``reporting 
                period'' means the period beginning on July 1, 
                2007, and ending on December 31, 2007.
                  (D) Secretary.--The term ``Secretary'' means 
                the Secretary of Health and Human Services.
  (d) Physician Assistance and Quality Initiative Fund.--
Section 1848 of the Social Security Act, as amended by 
subsection (b), is further amended by adding at the end the 
following new subsection:
  ``(l) Physician Assistance and Quality Initiative Fund.--
          ``(1) Establishment.--The Secretary shall establish 
        under this subsection a Physician Assistance and 
        Quality Initiative Fund (in this subsection referred to 
        as the `Fund') which shall be available to the 
        Secretary for physician payment and quality improvement 
        initiatives, which may include application of an 
        adjustment to the update of the conversion factor under 
        subsection (d).
          ``(2) Funding.--
                  ``(A) Amount available.--There shall be 
                available to the Fund for expenditures an 
                amount equal to $1,350,000,000.
                  ``(B) Timely obligation of all available 
                funds for services furnished during 2008.--The 
                Secretary shall provide for expenditures from 
                the Fund in a manner designed to provide (to 
                the maximum extent feasible) for the obligation 
                of the entire amount specified in subparagraph 
                (A) for payment with respect to physicians' 
                services furnished during 2008.
                  ``(C) Payment from trust fund.--The amount 
                specified in subparagraph (A) shall be 
                available to the Fund, as expenditures are made 
                from the Fund, from the Federal Supplementary 
                Medical Insurance Trust Fund under section 
                1841.
                  ``(D) Funding limitation.--Amounts in the 
                Fund shall be available in advance of 
                appropriations in accordance with subparagraph 
                (B) but only if the total amount obligated from 
                the Fund does not exceed the amount available 
                to the Fund under subparagraph (A). The 
                Secretary may obligate funds from the Fund only 
                if the Secretary determines (and the Chief 
                Actuary of the Centers for Medicare & Medicaid 
                Services and the appropriate budget officer 
                certify) that there are available in the Fund 
                sufficient amounts to cover all such 
                obligations incurred consistent with the 
                previous sentence.
                  ``(E) Construction.--In the case that 
                expenditures from the Fund are applied to, or 
                otherwise affect, a conversion factor under 
                subsection (d) for a year, the conversion 
                factor under such subsection shall be computed 
                for a subsequent year as if such application or 
                effect had never occurred.''.
  (e) Implementation.--For purposes of implementing the 
provisions of, and amendments made by, this section, the 
Secretary of Health and Human Services shall provide for the 
transfer, from the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841 of the Social 
Security Act (42 U.S.C. 1395t), of $60,000,000 to the Centers 
for Medicare & Medicaid Services Program Management Account for 
the period of fiscal years 2007, 2008, and 2009.

SEC. 102. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC ADJUSTMENT.

  Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 
1395w-4(e)(1)(E)) is amended by striking ``before January 1, 
2007'' and inserting ``before January 1, 2008''.

SEC. 103. UPDATE TO THE COMPOSITE RATE COMPONENT OF THE BASIC CASE-MIX 
                    ADJUSTED PROSPECTIVE PAYMENT SYSTEM FOR DIALYSIS 
                    SERVICES.

  (a) In General.--Section 1881(b)(12)(G) of the Social 
Security Act (42 U.S.C. 1395rr(b)(12)(G)) is amended to read as 
follows:
  ``(G) The Secretary shall increase the amount of the 
composite rate component of the basic case-mix adjusted system 
under subparagraph (B) for dialysis services--
          ``(i) furnished on or after January 1, 2006, and 
        before April 1, 2007, by 1.6 percent above the amount 
        of such composite rate component for such services 
        furnished on December 31, 2005; and
          ``(ii) furnished on or after April 1, 2007, by 1.6 
        percent above the amount of such composite rate 
        component for such services furnished on March 31, 
        2007.''.
  (b) GAO Report on Home Dialysis Payment.--Not later than 
January 1, 2009, the Comptroller General of the United States 
shall submit to Congress a report on the costs for home 
hemodialysis treatment and patient training for both home 
hemodialysis and peritoneal dialysis. Such report shall also 
include recommendations for a payment methodology for payment 
under section 1881 of the Social Security Act (42 U.S.C. 
1395rr) that measures, and is based on, the costs of providing 
such services and takes into account the case mix of patients.

SEC. 104. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY 
                    SERVICES UNDER MEDICARE.

  Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by 
section 1(a)(6) of Public Law 106-554), as amended by section 
732 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173), is amended by 
striking ``and 2006'' and inserting ``, 2006, and 2007''.

SEC. 105. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN 
                    CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO 
                    HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

  Effective as if included in the enactment of section 416 of 
the Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003 (42 U.S.C. 1395l-4), subsection (b) of such section 
is amended by striking ``2-year period'' and inserting ``3-year 
period''.

SEC. 106. HOSPITAL MEDICARE REPORTS AND CLARIFICATIONS.

  (a) Correction of Mid-Year Reclassification Expiration.--
Notwithstanding any other provision of law, in the case of a 
subsection (d) hospital (as defined for purposes of section 
1886 of the Social Security Act (42 U.S.C. 1395ww)) with 
respect to which a reclassification of its wage index for 
purposes of such section would (but for this subsection) expire 
on March 31, 2007, such reclassification of such hospital shall 
be extended through September 30, 2007. The previous sentence 
shall not be effected in a budget-neutral manner.
  (b) Revision of the Medicare Wage Index Classification 
System.--
          (1) Medpac report.--
                  (A) In general.--The Medicare Payment 
                Advisory Commission shall submit to Congress, 
                by not later than June 30, 2007, a report on 
                its study of the wage index classification 
                system applied under Medicare prospective 
                payment systems, including under section 
                1886(d)(3)(E) of the Social Security Act (42 
                U.S.C. 1395ww(d)(3)(E)). Such report shall 
                include any alternatives the Commission 
                recommends to the method to compute the wage 
                index under such section.
                  (B) Funding.--Out of any funds in the 
                Treasury not otherwise appropriated, there are 
                appropriated to the Medicare Payment Advisory 
                Commission, $2,000,000 for fiscal year 2007 to 
                carry out this paragraph.
          (2) Proposal to revise the hospital wage index 
        classification system.-- The Secretary of Health and 
        Human Services, taking into account the recommendations 
        described in the report under paragraph (1), shall 
        include in the proposed rule published under section 
        1886(e)(5)(A) of the Social Security Act (42 U.S.C. 
        1395ww(e)(5)(A)) for fiscal year 2009 one or more 
        proposals to revise the wage index adjustment applied 
        under section 1886(d)(3)(E) of such Act (42 U.S.C. 
        1395ww(d)(3)(E)) for purposes of the Medicare 
        prospective payment system for inpatient hospital 
        services. Such proposal (or proposals) shall consider 
        each of the following:
                  (A) Problems associated with the definition 
                of labor markets for purposes of such wage 
                index adjustment.
                  (B) The modification or elimination of 
                geographic reclassifications and other 
                adjustments.
                  (C) The use of Bureau of Labor Statistics 
                data, or other data or methodologies, to 
                calculate relative wages for each geographic 
                area involved.
                  (D) Minimizing variations in wage index 
                adjustments between and within Metropolitan 
                Statistical Areas and Statewide rural areas.
                  (E) The feasibility of applying all 
                components of the proposal to other settings, 
                including home health agencies and skilled 
                nursing facilities.
                  (F) Methods to minimize the volatility of 
                wage index adjustments, while maintaining the 
                principle of budget neutrality in applying such 
                adjustments.
                  (G) The effect that the implementation of the 
                proposal would have on health care providers 
                and on each region of the country.
                  (H) Methods for implementing the proposal, 
                including methods to phase-in such 
                implementation.
                  (I) Issues relating to occupational mix, such 
                as staffing practices and any evidence on the 
                effect on quality of care and patient safety 
                and any recommendations for alternative 
                calculations.
  (c) Elimination of Unnecessary Report.--Section 1886 of the 
Social Security Act (42 U.S.C. 1395ww) is amended--
          (1) in subsection (d)(4)(C), by striking clause (iv); 
        and
          (2) in subsection (e), by striking paragraph (3).

SEC. 107. PAYMENT FOR BRACHYTHERAPY.

  (a) Extension of Payment Rule.--Section 1833(t)(16)(C) of the 
Social Security Act (42 U.S.C. 1395l(t)(16)(C)) is amended by 
striking ``January 1, 2007'' and inserting ``January 1, 2008''.
  (b) Establishment of Separate Payment Groups.--
          (1) In general.--Section 1833(t)(2)(H) of such Act 
        (42 U.S.C. 1395l(t)(2)(H)) is amended by inserting 
        ``and for stranded and non-stranded devices furnished 
        on or after July 1, 2007'' before the period at the 
        end.
          (2) Implementation.--The Secretary of Health and 
        Human Services may implement the amendment made by 
        paragraph (1) by program instruction or otherwise.

SEC. 108. PAYMENT PROCESS UNDER THE COMPETITIVE ACQUISITION PROGRAM 
                    (CAP).

  (a) In General.--Section 1847B(a)(3) of the Social Security 
Act (42 U.S.C. 1395w-3b(a)(3)) is amended--
          (1) in subparagraph (A)(iii), by striking ``and 
        biologicals'' and all that follows and inserting ``and 
        biologicals shall be made only to such contractor upon 
        receipt of a claim for a drug or biological supplied by 
        the contractor for administration to a beneficiary.''; 
        and
          (2) by adding at the end the following new 
        subparagraph:
                  ``(D) Post-payment review process.--The 
                Secretary shall establish (by program 
                instruction or otherwise) a post-payment review 
                process (which may include the use of 
                statistical sampling) to assure that payment is 
                made for a drug or biological under this 
                section only if the drug or biological has been 
                administered to a beneficiary. The Secretary 
                shall recoup, offset, or collect any 
                overpayments determined by the Secretary under 
                such process.''.
  (b) Construction.--Nothing in this section shall be construed 
as--
          (1) requiring the conduct of any additional 
        competition under subsection (b)(1) of section 1847B of 
        the Social Security Act (42 U.S.C. 1395w-3b); or
          (2) requiring any additional process for elections by 
        physicians under subsection (a)(1)(A)(ii) of such 
        section or additional selection by a selecting 
        physician of a contractor under subsection (a)(5) of 
        such section.
  (c) Effective Date.--The amendments made by subsection (a) 
shall apply to payment for drugs and biologicals supplied under 
section 1847B of the Social Security Act (42 U.S.C. 1395w-3b)--
          (1) on or after April 1, 2007; and
          (2) on or after July 1, 2006, and before April 1, 
        2007, for claims that are unpaid as of April 1, 2007.

SEC. 109. QUALITY REPORTING FOR HOSPITAL OUTPATIENT SERVICES AND 
                    AMBULATORY SURGICAL CENTER SERVICES.

  (a) Outpatient Hospital Services.--
          (1) In general.--Section 1833(t) of the Social 
        Security Act (42 U.S.C. 1395l(t)) is amended--
                  (A) in paragraph (3)(C)(iv), by inserting 
                ``subject to paragraph (17),'' after ``For 
                purposes of this subparagraph,''; and
                  (B) by adding at the end the following new 
                paragraph:
          ``(17) Quality reporting.--
                  ``(A) Reduction in update for failure to 
                report.--
                          ``(i) In general.--For purposes of 
                        paragraph (3)(C)(iv) for 2009 and each 
                        subsequent year, in the case of a 
                        subsection (d) hospital (as defined in 
                        section 1886(d)(1)(B)) that does not 
                        submit, to the Secretary in accordance 
                        with this paragraph, data required to 
                        be submitted on measures selected under 
                        this paragraph with respect to such a 
                        year, the OPD fee schedule increase 
                        factor under paragraph (3)(C)(iv) for 
                        such year shall be reduced by 2.0 
                        percentage points.
                          ``(ii) Non-cumulative application.--A 
                        reduction under this subparagraph shall 
                        apply only with respect to the year 
                        involved and the Secretary shall not 
                        take into account such reduction in 
                        computing the OPD fee schedule increase 
                        factor for a subsequent year.
                  ``(B) Form and manner of submission.--Each 
                subsection (d) hospital shall submit data on 
                measures selected under this paragraph to the 
                Secretary in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                paragraph.
                  ``(C) Development of outpatient measures.--
                          ``(i) In general.--The Secretary 
                        shall develop measures that the 
                        Secretary determines to be appropriate 
                        for the measurement of the quality of 
                        care (including medication errors) 
                        furnished by hospitals in outpatient 
                        settings and that reflect consensus 
                        among affected parties and, to the 
                        extent feasible and practicable, shall 
                        include measures set forth by one or 
                        more national consensus building 
                        entities.
                          ``(ii) Construction.--Nothing in this 
                        paragraph shall be construed as 
                        preventing the Secretary from selecting 
                        measures that are the same as (or a 
                        subset of) the measures for which data 
                        are required to be submitted under 
                        section 1886(b)(3)(B)(viii).
                  ``(D) Replacement of measures.--For purposes 
                of this paragraph, the Secretary may replace 
                any measures or indicators in appropriate 
                cases, such as where all hospitals are 
                effectively in compliance or the measures or 
                indicators have been subsequently shown not to 
                represent the best clinical practice.
                  ``(E) Availability of data.--The Secretary 
                shall establish procedures for making data 
                submitted under this paragraph available to the 
                public. Such procedures shall ensure that a 
                hospital has the opportunity to review the data 
                that are to be made public with respect to the 
                hospital prior to such data being made public. 
                The Secretary shall report quality measures of 
                process, structure, outcome, patients' 
                perspectives on care, efficiency, and costs of 
                care that relate to services furnished in 
                outpatient settings in hospitals on the 
                Internet website of the Centers for Medicare & 
                Medicaid Services.''.
          (2) Conforming amendment.--Section 
        1886(b)(3)(B)(viii)(III) of such Act (42 U.S.C. 
        1395ww(b)(3)(B)(viii)(III)) is amended by inserting 
        ``(including medication errors)'' after ``quality of 
        care''.
  (b) Application to Ambulatory Surgical Centers.--Section 
1833(i) of such Act (42 U.S.C. 1935l(i)) is amended--
          (1) in paragraph (2)(D), by redesignating clause (iv) 
        as clause (v) and by inserting after clause (iii) the 
        following new clause:
  ``(iv) The Secretary may implement such system in a manner so 
as to provide for a reduction in any annual update for failure 
to report on quality measures in accordance with paragraph 
(7).''; and
          (2) by adding at the end the following new paragraph:
  ``(7)(A) For purposes of paragraph (2)(D)(iv), the Secretary 
may provide, in the case of an ambulatory surgical center that 
does not submit, to the Secretary in accordance with this 
paragraph, data required to be submitted on measures selected 
under this paragraph with respect to a year, any annual 
increase provided under the system established under paragraph 
(2)(D) for such year shall be reduced by 2.0 percentage points. 
A reduction under this subparagraph shall apply only with 
respect to the year involved and the Secretary shall not take 
into account such reduction in computing any annual increase 
factor for a subsequent year.
  ``(B) Except as the Secretary may otherwise provide, the 
provisions of subparagraphs (B), (C), (D), and (E) of paragraph 
(17) of section 1833(t) shall apply with respect to services of 
ambulatory surgical centers under this paragraph in a similar 
manner to the manner in which they apply under such paragraph 
and, for purposes of this subparagraph, any reference to a 
hospital, outpatient setting, or outpatient hospital services 
is deemed a reference to an ambulatory surgical center, the 
setting of such a center, or services of such a center, 
respectively.''.
  (c) Effective Date.--The amendments made by this section 
shall apply to payment for services furnished on or after 
January 1, 2009.

SEC. 110. REPORTING OF ANEMIA QUALITY INDICATORS FOR MEDICARE PART B 
                    CANCER ANTI-ANEMIA DRUGS.

  (a) In General.--Section 1842 of the Social Security Act (42 
U.S.C. 1395u) is amended by adding at the end the following new 
subsection:
  ``(u) Each request for payment, or bill submitted, for a drug 
furnished to an individual for the treatment of anemia in 
connection with the treatment of cancer shall include (in a 
form and manner specified by the Secretary) information on the 
hemoglobin or hematocrit levels for the individual.''.
  (b) Effective Date.--The amendment made by subsection (a) 
shall apply to drugs furnished on or after January 1, 2008. The 
Secretary of Health and Human Services shall address the 
implementation of such amendment in the rulemaking process 
under section 1848 of the Social Security Act (42 U.S.C. 1395w-
4) for payment for physicians' services for 2008, consistent 
with the previous sentence.

SEC. 111. CLARIFICATION OF HOSPICE SATELLITE DESIGNATION.

  Notwithstanding any other provision of law, for purposes of 
calculating the hospice aggregate payment cap for 2004, 2005, 
and 2006 for a hospice program under section 1814(i)(2)(A) of 
the Social Security Act (42 U.S.C. 1395f(i)(2)(A)) for hospice 
care provided on or after November 1, 2003, and before December 
27, 2005, Medicare provider number 29-1511 is deemed to be a 
multiple location of Medicare provider number 29-1500.

               TITLE II--MEDICARE BENEFICIARY PROTECTIONS

SEC. 201. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY CAPS.

  Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)) is amended by striking ``2006'' and inserting 
``the period beginning on January 1, 2006, and ending on 
December 31, 2007,''.

SEC. 202. PAYMENT FOR ADMINISTRATION OF PART D VACCINES.

  (a) Transition for 2007.--Notwithstanding any other provision 
of law, in the case of a vaccine that is a covered part D drug 
under section 1860D-2(e) of the Social Security Act (42 U.S.C. 
1395w-102(e)) and that is administered during 2007, the 
administration of such vaccine shall be paid under part B of 
title XVIII of such Act as if it were the administration of a 
vaccine described in section 1861(s)(10)(B) of such Act (42 
U.S.C. 1395w(s)(10)(B)).
  (b) Administration Included in Coverage of Covered Part D 
Drugs Beginning in 2008.--Section 1860D-2(e)(1) of the Social 
Security Act (42 U.S.C. 1395w-102(e)(1)) is amended, in the 
matter following subparagraph (B), by inserting ``(and, for 
vaccines administered on or after January 1, 2008, its 
administration)'' after ``Public Health Service Act''.

SEC. 203. OIG STUDY OF NEVER EVENTS.

  (a) Study.--
          (1) In general.--The Inspector General in the 
        Department of Health and Human Services shall conduct a 
        study on--
                  (A) incidences of never events for Medicare 
                beneficiaries, including types of such events 
                and payments by any party for such events;
                  (B) the extent to which the Medicare program 
                paid, denied payment, or recouped payment for 
                services furnished in connection with such 
                events and the extent to which beneficiaries 
                paid for such services; and
                  (C) the administrative processes of the 
                Centers for Medicare & Medicaid Services to 
                detect such events and to deny or recoup 
                payments for services furnished in connection 
                with such an event.
          (2) Conduct of study.--In conducting the study under 
        paragraph (1), the Inspector General--
                  (A) shall audit a representative sample of 
                claims and medical records of Medicare 
                beneficiaries to identify never events and any 
                payment (or recoupment) for services furnished 
                in connection with such events;
                  (B) may request access to such claims and 
                records from any Medicare contractor; and
                  (C) shall not release individually 
                identifiable information or facility-specific 
                information.
  (b) Report.--Not later than 2 years after the date of the 
enactment of this Act, the Inspector General shall submit a 
report to Congress on the study conducted under this section. 
Such report shall include recommendations for such legislation 
and administrative action, such as a noncoverage policy or 
denial of payments, as the Inspector General determines 
appropriate, including--
          (1) recommendations on processes to identify never 
        events and to deny or recoup payments for services 
        furnished in connection with such events; and
          (2) a recommendation on a potential process (or 
        processes) for public disclosure of never events 
        which--
                  (A) will ensure protection of patient 
                privacy; and
                  (B) will permit the use of the disclosed 
                information for a root cause analysis to inform 
                the public and the medical community about 
                safety issues involved.
  (c) Funding.-- Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Inspector General 
of the Department of Health and Human Services $3,000,000 to 
carry out this section, to be available until January 1, 2010.
  (d) Never Events Defined.--For purposes of this section, the 
term ``never event'' means an event that is listed and endorsed 
as a serious reportable event by the National Quality Forum as 
of November 16, 2006.

SEC. 204. MEDICARE MEDICAL HOME DEMONSTRATION PROJECT.

  (a) In General.--The Secretary of Health and Human Services 
(in this section referred to as the ``Secretary'') shall 
establish under title XVIII of the Social Security Act a 
medical home demonstration project (in this section referred to 
as the ``project'') to redesign the health care delivery system 
to provide targeted, accessible, continuous and coordinated, 
family-centered care to high-need populations and under which--
          (1) care management fees are paid to persons 
        performing services as personal physicians; and
          (2) incentive payments are paid to physicians 
        participating in practices that provide services as a 
        medical home under subsection (d).
For purposes of this subsection, the term ``high-need 
population'' means individuals with multiple chronic illnesses 
that require regular medical monitoring, advising, or 
treatment.
  (b) Details.--
          (1) Duration; scope.--The project shall operate 
        during a period of three years and shall include urban, 
        rural, and underserved areas in a total of no more than 
        8 States.
          (2) Encouraging participation of small physician 
        practices.--The project shall be designed to include 
        the participation of physicians in practices with fewer 
        than three full-time equivalent physicians, as well as 
        physicians in larger practices particularly in rural 
        and underserved areas.
  (c) Personal Physician Defined.--
          (1) In general.--For purposes of this section, the 
        term ``personal physician'' means a physician (as 
        defined in section 1861(r)(1) of the Social Security 
        Act (42 U.S.C. 1395x(r)(1)) who--
                  (A) meets the requirements described in 
                paragraph (2); and
                  (B) performs the services described in 
                paragraph (3).
        Nothing in this paragraph shall be construed as 
        preventing such a physician from being a specialist or 
        subspecialist for an individual requiring ongoing care 
        for a specific chronic condition or multiple chronic 
        conditions (such as severe asthma, complex diabetes, 
        cardiovascular disease, rheumatologic disorder) or for 
        an individual with a prolonged illness.
          (2) Requirements.--The requirements described in this 
        paragraph for a personal physician are as follows:
                  (A) The physician is a board certified 
                physician who provides first contact and 
                continuous care for individuals under the 
                physician's care.
                  (B) The physician has the staff and resources 
                to manage the comprehensive and coordinated 
                health care of each such individual.
          (3) Services performed.--A personal physician shall 
        perform or provide for the performance of at least the 
        following services:
                  (A) Advocates for and provides ongoing 
                support, oversight, and guidance to implement a 
                plan of care that provides an integrated, 
                coherent, cross-discipline plan for ongoing 
                medical care developed in partnership with 
                patients and including all other physicians 
                furnishing care to the patient involved and 
                other appropriate medical personnel or agencies 
                (such as home health agencies).
                  (B) Uses evidence-based medicine and clinical 
                decision support tools to guide decision-making 
                at the point-of-care based on patient-specific 
                factors.
                  (C) Uses health information technology, that 
                may include remote monitoring and patient 
                registries, to monitor and track the health 
                status of patients and to provide patients with 
                enhanced and convenient access to health care 
                services.
                  (D) Encourages patients to engage in the 
                management of their own health through 
                education and support systems.
  (d) Medical Home Defined.--For purposes of this section, the 
term ``medical home'' means a physician practice that--
          (1) is in charge of targeting beneficiaries for 
        participation in the project; and
          (2) is responsible for--
                  (A) providing safe and secure technology to 
                promote patient access to personal health 
                information;
                  (B) developing a health assessment tool for 
                the individuals targeted; and
                  (C) providing training programs for personnel 
                involved in the coordination of care.
  (e) Payment Mechanisms.--
          (1) Personal physician care management fee.--Under 
        the project, the Secretary shall provide for payment 
        under section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4) of a care management fee to personal 
        physicians providing care management under the project. 
        Under such section and using the relative value scale 
        update committee (RUC) process under such section, the 
        Secretary shall develop a care management fee code for 
        such payments and a value for such code.
          (2) Medical home sharing in savings.--The Secretary 
        shall provide for payment under the project of a 
        medical home based on the payment methodology applied 
        to physician group practices under section 1866A of the 
        Social Security Act (42 U.S.C. 1395cc-1). Under such 
        methodology, 80 percent of the reductions in 
        expenditures under title XVIII of the Social Security 
        Act resulting from participation of individuals that 
        are attributable to the medical home (as reduced by the 
        total care managements fees paid to the medical home 
        under the project) shall be paid to the medical home. 
        The amount of such reductions in expenditures shall be 
        determined by using assumptions with respect to 
        reductions in the occurrence of health complications, 
        hospitalization rates, medical errors, and adverse drug 
        reactions.
          (3) Source.--Payments paid under the project shall be 
        made from the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 of the Social Security 
        Act (42 U.S.C. 1395t).
  (f) Evaluations and Reports.--
          (1) Annual interim evaluations and reports.--For each 
        year of the project, the Secretary shall provide for an 
        evaluation of the project and shall submit to Congress, 
        by a date specified by the Secretary, a report on the 
        project and on the evaluation of the project for each 
        such year.
          (2) Final evaluation and report.--The Secretary shall 
        provide for an evaluation of the project and shall 
        submit to Congress, not later than one year after 
        completion of the project, a report on the project and 
        on the evaluation of the project.

SEC. 205. MEDICARE DRA TECHNICAL CORRECTIONS.

  (a) PACE Clarification.--Paragraph (7) of section 5302(c) of 
the Deficit Reduction Act of 2005 (42 U.S.C. 1395eee note) is 
amended to read as follows:
          ``(7) Appropriation.--
                  ``(A) In general.--Out of funds in the 
                Treasury not otherwise appropriated, there are 
                appropriated to the Secretary $10,000,000 to 
                carry out this subsection for the period of 
                fiscal years 2006 through 2010.
                  ``(B) Availability.--Funds appropriated under 
                subparagraph (A) shall remain available for 
                obligation through fiscal year 2010.''.
  (b) Miscellaneous Technical Corrections.--
          (1) Correction of margin (section 5001).--Section 
        1886(b)(3)(B) of the Social Security Act (42 U.S.C. 
        1395ww(b)(3)(B)), as amended by section 5001(a) of the 
        Deficit Reduction Act of 2005 (Public Law 109-171), is 
        amended by moving clause (viii) (including subclauses 
        (I) through (VII) of such clause) 6 ems to the left.
          (2) Reference correction (section 5114).--Section 
        5114(a)(2) of the Deficit Reduction Act of 2005 (Public 
        Law 109-171), in the matter preceding subparagraph (A), 
        is amended by striking ``1842(b)(6)(F) of such Act (42 
        U.S.C. 1395u(b)(6)(F))'' and inserting ``1842(b)(6) of 
        such Act (42 U.S.C. 1395u(b)(6))''.
  (c) Effective Date.--The amendments made by this section 
shall take effect as if included in the enactment of the 
Deficit Reduction Act of 2005 (Public Law 109-171).

SEC. 206. LIMITED CONTINUOUS OPEN ENROLLMENT OF ORIGINAL MEDICARE FEE-
                    FOR-SERVICE ENROLLEES INTO MEDICARE ADVANTAGE NON-
                    PRESCRIPTION DRUG PLANS.

  (a) In General.--Section 1851(e)(2) of the Social Security 
Act (42 U.S.C. 1395w-21(e)(2)) is amended by adding at the end 
the following new subparagraph:
                  ``(E) Limited continuous open enrollment of 
                original fee-for-service enrollees in medicare 
                advantage non-prescription drug plans.--
                          ``(i) In general.--On any date during 
                        2007 or 2008 on which a Medicare 
                        Advantage eligible individual is an 
                        unenrolled fee-for-service individual 
                        (as defined in clause (ii)), the 
                        individual may elect under subsection 
                        (a)(1) to enroll in a Medicare 
                        Advantage plan that is not an MA-PD 
                        plan.
                          ``(ii) Unenrolled fee-for-service 
                        individual defined.--In this 
                        subparagraph, the term `unenrolled fee-
                        for-service individual' means, with 
                        respect to a date, a Medicare Advantage 
                        eligible individual who--
                                  ``(I) is receiving benefits 
                                under this title through 
                                enrollment in the original 
                                medicare fee-for-service 
                                program under parts A and B;
                                  ``(II) is not enrolled in an 
                                MA plan on such date; and
                                  ``(III) as of such date is 
                                not otherwise eligible to elect 
                                to enroll in an MA plan.
                          ``(iii) Limitation of one change 
                        during year.--An individual may 
                        exercise the right under clause (i) 
                        only once during the year.
                          ``(iv) No effect on coverage under a 
                        prescription drug plan.--Nothing in 
                        this subparagraph shall be construed as 
                        permitting an individual exercising the 
                        right under clause (i)--
                                  ``(I) who is enrolled in a 
                                prescription drug plan under 
                                part D, to disenroll from such 
                                plan or to enroll in a 
                                different prescription drug 
                                plan; or
                                  ``(II) who is not enrolled in 
                                a prescription drug plan, to 
                                enroll in such a plan.''.
  (b) Conforming Amendment.--Section 1860D-1(b)(1)(B)(iii) of 
the Social Security Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)) is 
amended by striking ``subparagraphs (B) and (C)'' and inserting 
``subparagraphs (B), (C), and (E)''.

             TITLE III--MEDICARE PROGRAM INTEGRITY EFFORTS

SEC. 301. OFFSETTING ADJUSTMENT IN MEDICARE ADVANTAGE STABILIZATION 
                    FUND.

  Section 1858(e)(2)(A)(i) of the Social Security Act (42 
U.S.C. 1395w-27a(e)(2)(A)(i)) is amended by striking ``2007,'' 
and ``$10,000,000,000'' and inserting ``2012,'' and 
``$3,500,000,000'', respectively.

SEC. 302. EXTENSION AND EXPANSION OF RECOVERY AUDIT CONTRACTOR PROGRAM 
                    UNDER THE MEDICARE INTEGRITY PROGRAM.

  (a) In General.--Section 1893 of the Social Security Act (42 
U.S.C. 1395ddd) is amended by adding at the end the following 
new subsection:
  ``(h) Use of Recovery Audit Contractors.--
          ``(1) In general.--Under the Program, the Secretary 
        shall enter into contracts with recovery audit 
        contractors in accordance with this subsection for the 
        purpose of identifying underpayments and overpayments 
        and recouping overpayments under this title with 
        respect to all services for which payment is made under 
        part A or B. Under the contracts--
                  ``(A) payment shall be made to such a 
                contractor only from amounts recovered;
                  ``(B) from such amounts recovered, payment--
                          ``(i) shall be made on a contingent 
                        basis for collecting overpayments; and
                          ``(ii) may be made in such amounts as 
                        the Secretary may specify for 
                        identifying underpayments; and
                  ``(C) the Secretary shall retain a portion of 
                the amounts recovered which shall be available 
                to the program management account of the 
                Centers for Medicare & Medicaid Services for 
                purposes of activities conducted under the 
                recovery audit program under this subsection.
          ``(2) Disposition of remaining recoveries.--The 
        amounts recovered under such contracts that are not 
        paid to the contractor under paragraph (1) or retained 
        by the Secretary under paragraph (1)(C) shall be 
        applied to reduce expenditures under parts A and B.
          ``(3) Nationwide coverage.--The Secretary shall enter 
        into contracts under paragraph (1) in a manner so as to 
        provide for activities in all States under such a 
        contract by not later than January 1, 2010.
          ``(4) Audit and recovery periods.--Each such contract 
        shall provide that audit and recovery activities may be 
        conducted during a fiscal year with respect to payments 
        made under part A or B--
                  ``(A) during such fiscal year; and
                  ``(B) retrospectively (for a period of not 
                more than 4 fiscal years prior to such fiscal 
                year).
          ``(5) Waiver.--The Secretary shall waive such 
        provisions of this title as may be necessary to provide 
        for payment of recovery audit contractors under this 
        subsection in accordance with paragraph (1).
          ``(6) Qualifications of contractors.--
                  ``(A) In general.--The Secretary may not 
                enter into a contract under paragraph (1) with 
                a recovery audit contractor unless the 
                contractor has staff that has the appropriate 
                clinical knowledge of, and experience with, the 
                payment rules and regulations under this title 
                or the contractor has, or will contract with, 
                another entity that has such knowledgeable and 
                experienced staff.
                  ``(B) Ineligibility of certain contractors.--
                The Secretary may not enter into a contract 
                under paragraph (1) with a recovery audit 
                contractor to the extent the contractor is a 
                fiscal intermediary under section 1816, a 
                carrier under section 1842, or a medicare 
                administrative contractor under section 1874A.
                  ``(C) Preference for entities with 
                demonstrated proficiency.--In awarding 
                contracts to recovery audit contractors under 
                paragraph (1), the Secretary shall give 
                preference to those risk entities that the 
                Secretary determines have demonstrated more 
                than 3 years direct management experience and a 
                proficiency for cost control or recovery audits 
                with private insurers, health care providers, 
                health plans, under the Medicaid program under 
                title XIX, or under this title.
          ``(7) Construction relating to conduct of 
        investigation of fraud.--A recovery of an overpayment 
        to a individual or entity by a recovery audit 
        contractor under this subsection shall not be construed 
        to prohibit the Secretary or the Attorney General from 
        investigating and prosecuting, if appropriate, 
        allegations of fraud or abuse arising from such 
        overpayment.
          ``(8) Annual report.--The Secretary shall annually 
        submit to Congress a report on the use of recovery 
        audit contractors under this subsection. Each such 
        report shall include information on the performance of 
        such contractors in identifying underpayments and 
        overpayments and recouping overpayments, including an 
        evaluation of the comparative performance of such 
        contractors and savings to the program under this 
        title.''.
  (b) Access to Coordination of Benefits Contractor Database.--
The Secretary of Health and Human Services shall provide for 
access by recovery audit contractors conducting audit and 
recovery activities under section 1893(h) of the Social 
Security Act, as added by subsection (a), to the database of 
the Coordination of Benefits Contractor of the Centers for 
Medicare & Medicaid Services with respect to the audit and 
recovery periods described in paragraph (4) of such section 
1893(h).
  (c) Conforming Amendments to Current Demonstration Project.--
Section 306 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2256) 
is amended--
          (1) in subsection (b)(2), by striking ``last for not 
        longer than 3 years'' and inserting ``continue until 
        contracts are entered into under section 1893(h) of the 
        Social Security Act''; and
          (2) by striking subsection (f).

SEC. 303. FUNDING FOR THE HEALTH CARE FRAUD AND ABUSE CONTROL ACCOUNT.

  (a) Departments of Health and Human Services and Justice.--
          (1) In general.--Section 1817(k)(3)(A)(i) of the 
        Social Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) is 
        amended--
                  (A) in the matter preceding subclause (I), by 
                inserting ``until expended'' after ``without 
                further appropriation'';
                  (B) in subclause (II), by striking ``and'' at 
                the end;
                  (C) in subclause (III)--
                          (i) by striking ``for each fiscal 
                        year after fiscal year 2003'' and 
                        inserting ``for each of fiscal years 
                        2004, 2005, and 2006''; and
                          (ii) by striking the period at the 
                        end and inserting a semicolon; and
                  (D) by adding at the end the following new 
                subclauses:
                                  ``(IV) for each of fiscal 
                                years 2007, 2008, 2009, and 
                                2010, the limit under this 
                                clause for the preceding fiscal 
                                year, increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (all items; 
                                United States city average) 
                                over the previous year; and
                                  ``(V) for each fiscal year 
                                after fiscal year 2010, the 
                                limit under this clause for 
                                fiscal year 2010.''.
          (2) Office of the inspector general of the department 
        of health and human services.--Section 
        1817(k)(3)(A)(ii) of such Act (42 U.S.C. 
        1395i(k)(3)(A)(ii)) is amended--
                  (A) in subclause (VI), by striking ``and'' at 
                the end;
                  (B) in subclause (VII)--
                          (i) by striking ``for each fiscal 
                        year after fiscal year 2002'' and 
                        inserting ``for each of fiscal years 
                        2003, 2004, 2005, and 2006''; and
                          (ii) by striking the period at the 
                        end and inserting a semicolon; and
                  (C) by adding at the end the following new 
                subclauses:
                                  ``(VIII) for fiscal year 
                                2007, not less than 
                                $160,000,000, increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (all items; 
                                United States city average) 
                                over the previous year;
                                  ``(IX) for each of fiscal 
                                years 2008, 2009, and 2010, not 
                                less than the amount required 
                                under this clause for the 
                                preceding fiscal year, 
                                increased by the percentage 
                                increase in the consumer price 
                                index for all urban consumers 
                                (all items; United States city 
                                average) over the previous 
                                year; and
                                  ``(X) for each fiscal year 
                                after fiscal year 2010, not 
                                less than the amount required 
                                under this clause for fiscal 
                                year 2010.''.
  (b) Federal Bureau of Investigation.--Section 1817(k)(3)(B) 
of the Social Security Act (42 U.S.C. 1395i(k)(3)(B)) is 
amended--
          (1) in the matter preceding clause (i), by inserting 
        ``until expended'' after ``without further 
        appropriation'';
          (2) in clause (vi), by striking ``and'' at the end;
          (3) in clause (vii)--
                  (A) by striking ``for each fiscal year after 
                fiscal year 2002'' and inserting ``for each of 
                fiscal years 2003, 2004, 2005, and 2006''; and
                  (B) by striking the period at the end and 
                inserting a semicolon; and
          (4) by adding at the end the following new clauses:
                          ``(viii) for each of fiscal years 
                        2007, 2008, 2009, and 2010, the amount 
                        to be appropriated under this 
                        subparagraph for the preceding fiscal 
                        year, increased by the percentage 
                        increase in the consumer price index 
                        for all urban consumers (all items; 
                        United States city average) over the 
                        previous year; and
                          ``(ix) for each fiscal year after 
                        fiscal year 2010, the amount to be 
                        appropriated under this subparagraph 
                        for fiscal year 2010.''.

SEC. 304. IMPLEMENTATION FUNDING.

  For purposes of implementing the provisions of, and 
amendments made by, this title and titles I and II of this 
division, other than section 203, the Secretary of Health and 
Human Services shall provide for the transfer, in appropriate 
part from the Federal Hospital Insurance Trust Fund established 
under section 1817 of the Social Security Act (42 U.S.C. 1395i) 
and the Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 of such Act (42 U.S.C. 1395t), 
of $45,000,000 to the Centers for Medicare & Medicaid Services 
Program Management Account for the period of fiscal years 2007 
and 2008.

             TITLE IV--MEDICAID AND OTHER HEALTH PROVISIONS

SEC. 401. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND 
                    ABSTINENCE EDUCATION PROGRAM.

  Activities authorized by sections 510 and 1925 of the Social 
Security Act shall continue through June 30, 2007, in the 
manner authorized for fiscal year 2006, notwithstanding section 
1902(e)(1)(A) of such Act, and out of any money in the Treasury 
of the United States not otherwise appropriated, there are 
hereby appropriated such sums as may be necessary for such 
purpose. Grants and payments may be made pursuant to this 
authority through the third quarter of fiscal year 2007 at the 
level provided for such activities through the third quarter of 
fiscal year 2006.

SEC. 402. GRANTS FOR RESEARCH ON VACCINE AGAINST VALLEY FEVER.

  (a) In General.--In supporting research on the development of 
vaccines against human diseases, the Secretary of Health and 
Human Services shall make grants for the purpose of conducting 
research toward the development of a vaccine against 
coccidioidomycosis (commonly known as Valley Fever).
  (b) Sunset.--No grant may be made under subsection (a) on or 
after October 1, 2012. The preceding sentence does not have any 
legal effect on payments under grants for which amounts 
appropriated under subsection (c) were obligated prior to such 
date.
  (c) Authorization of Appropriations.--For the purpose of 
making grants under subsection (a), there are authorized to be 
appropriated $40,000,000 for the period of fiscal years 2007 
through 2012.

SEC. 403. CHANGE IN THRESHOLD FOR MEDICAID INDIRECT HOLD HARMLESS 
                    PROVISION OF BROAD-BASED HEALTH CARE TAXES.

  Section 1903(w)(4)(C) of the Social Security Act (42 U.S.C. 
1396b(w)(4)(C)) is amended--
          (1) by inserting ``(i)'' after ``(C)''; and
          (2) by adding at the end the following:
          ``(ii) For purposes of clause (i), a determination of 
        the existence of an indirect guarantee shall be made 
        under paragraph (3)(i) of section 433.68(f) of title 
        42, Code of Federal Regulations, as in effect on 
        November 1, 2006, except that for portions of fiscal 
        years beginning on or after January 1, 2008, and before 
        October 1, 2011, `5.5 percent' shall be substituted for 
        `6 percent' each place it appears.''.

SEC. 404. DSH ALLOTMENTS FOR FISCAL YEAR 2007 FOR TENNESSEE AND HAWAII.

  Section 1923(f)(6) of the Social Security Act (42 U.S.C. 
1396r-4(f)(6)) is amended to read as follows:
          ``(6) Allotment adjustments for fiscal year 2007.--
                  ``(A) Tennessee.--
                          ``(i) In general.--Only with respect 
                        to fiscal year 2007, the DSH allotment 
                        for Tennessee for such fiscal year, 
                        notwithstanding the table set forth in 
                        paragraph (2) or the terms of the 
                        TennCare Demonstration Project in 
                        effect for the State, shall be the 
                        greater of--
                                  ``(I) the amount that the 
                                Secretary determines is equal 
                                to the Federal medical 
                                assistance percentage component 
                                attributable to 
                                disproportionate share hospital 
                                payment adjustments for the 
                                demonstration year ending in 
                                2006 that is reflected in the 
                                budget neutrality provision of 
                                the TennCare Demonstration 
                                Project; and
                                  ``(II) $280,000,000.
                          ``(ii) Limitation on amount of 
                        payment adjustments eligible for 
                        federal financial participation.--
                        Payment under section 1903(a) shall not 
                        be made to Tennessee with respect to 
                        the aggregate amount of any payment 
                        adjustments made under this section for 
                        hospitals in the State for fiscal year 
                        2007 that is in excess of 30 percent of 
                        the DSH allotment for the State for 
                        such fiscal year determined pursuant to 
                        clause (i).
                          ``(iii) State plan amendment.--The 
                        Secretary shall permit Tennessee to 
                        submit an amendment to its State plan 
                        under this title that describes the 
                        methodology to be used by the State to 
                        identify and make payments to 
                        disproportionate share hospitals, 
                        including children's hospitals and 
                        institutions for mental diseases or 
                        other mental health facilities. The 
                        Secretary may not approve such plan 
                        amendment unless the methodology 
                        described in the amendment is 
                        consistent with the requirements under 
                        this section for making payment 
                        adjustments to disproportionate share 
                        hospitals. For purposes of 
                        demonstrating budget neutrality under 
                        the TennCare Demonstration Project, 
                        payment adjustments made pursuant to a 
                        State plan amendment approved in 
                        accordance with this subparagraph shall 
                        be considered expenditures under such 
                        project.
                          ``(iv) Offset of federal share of 
                        payment adjustments for fiscal year 
                        2007 against essential access hospital 
                        supplemental pool payments under the 
                        tenncare demonstration project.--
                                  ``(I) The total amount of 
                                Essential Access Hospital 
                                supplemental pool payments that 
                                may be made under the TennCare 
                                Demonstration Project for 
                                fiscal year 2007 shall be 
                                reduced on a dollar for dollar 
                                basis by the amount of any 
                                payments made under section 
                                1903(a) to Tennessee with 
                                respect to payment adjustments 
                                made under this section for 
                                hospitals in the State for such 
                                fiscal year.
                                  ``(II) The sum of the total 
                                amount of payments made under 
                                section 1903(a) to Tennessee 
                                with respect to payment 
                                adjustments made under this 
                                section for hospitals in the 
                                State for fiscal year 2007 and 
                                the total amount of Essential 
                                Access Hospital supplemental 
                                pool payments made under the 
                                TennCare Demonstration Project 
                                for such fiscal year shall not 
                                exceed the State's DSH 
                                allotment for such fiscal year 
                                established under clause (i).
                  ``(B) Hawaii.--
                          ``(i) In general.--Only with respect 
                        to fiscal year 2007, the DSH allotment 
                        for Hawaii for such fiscal year, 
                        notwithstanding the table set forth in 
                        paragraph (2), shall be $10,000,000.
                          ``(ii) State plan amendment.--The 
                        Secretary shall permit Hawaii to submit 
                        an amendment to its State plan under 
                        this title that describes the 
                        methodology to be used by the State to 
                        identify and make payments to 
                        disproportionate share hospitals, 
                        including children's hospitals and 
                        institutions for mental diseases or 
                        other mental health facilities. The 
                        Secretary may not approve such plan 
                        amendment unless the methodology 
                        described in the amendment is 
                        consistent with the requirements under 
                        this section for making payment 
                        adjustments to disproportionate share 
                        hospitals.''.

SEC. 405. CERTAIN MEDICAID DRA TECHNICAL CORRECTIONS.

  (a) Technical Corrections Relating to State Option for 
Alternative Premiums and Cost Sharing (Sections 6041 Through 
6043).--
          (1) Clarification of continued application of regular 
        cost sharing rules for individuals with family income 
        not exceeding 100 percent of the poverty line.--Section 
        1916A of the Social Security Act, as inserted by 
        section 6041(a) of the Deficit Reduction Act of 2005 
        and amended by sections 6042 and 6043 of such Act, is 
        amended--
                  (A) in subsection (a)(1)--
                          (i) by inserting ``but subject to 
                        paragraph (2),'' after 
                        ``1902(a)(10)(B),''; and
                          (ii) by inserting ``and non-emergency 
                        services furnished in a hospital 
                        emergency department for which cost 
                        sharing may be imposed under subsection 
                        (e)'' after ``(c)'';
                  (B) by redesignating paragraph (2) of 
                subsection (a) as paragraph (3);
                  (C) in subsection (a), by inserting after 
                paragraph (1) the following:
          ``(2) Exemption for individuals with family income 
        not exceeding 100 percent of the poverty line.--
                  ``(A) In general.--Paragraph (1) and 
                subsection (d) shall not apply, and sections 
                1916 and 1902(a)(10)(B) shall continue to 
                apply, in the case of an individual whose 
                family income does not exceed 100 percent of 
                the poverty line applicable to a family of the 
                size involved.
                  ``(B) Limit on aggregate cost sharing.--To 
                the extent cost sharing under subsection (c) 
                and (e) or under section 1916 is imposed 
                against individuals described in subparagraph 
                (A), the limitation under subsection 
                (b)(1)(B)(ii) on the total aggregate amount of 
                cost sharing shall apply to such cost sharing 
                for all individuals in a family described in 
                subparagraph (A) in the same manner as such 
                limitations apply to cost sharing and families 
                described in subsection (b)(1)(B)(ii).'';
                  (D) in subsections (c)(2)(C) and (e)(2)(C), 
                by inserting ``under subsection (a)(2)(B) or'' 
                after ``cap on cost sharing applied''; and
                  (E) in subsection (e)(2)(A), by inserting 
                ``who is not described in subparagraph (B)'' 
                after ``subsection (b)(1)''.
          (2) Clarification of treatment of non-preferred drug 
        and non-emergency cost-sharing.--Such section is 
        further amended--
                  (A) in subsections (b)(1) and (b)(2), by 
                striking ``, subject to subsections (c)(2) and 
                (e)(2)(A)'';
                  (B) in subsection (c)(1), in the matter 
                preceding subparagraph (A), by striking ``least 
                (or less) costly effective'' and inserting 
                ``most (or more) cost effective'';
                  (C) in subsection (c)(1)(B), by striking 
                ``otherwise be imposed under'' and inserting 
                ``be imposed under subsection (a) due to the 
                application of'';
                  (D) in subsection (c)(2)(B), by striking 
                ``otherwise not subject to cost sharing due to 
                the application of subsection (b)(3)(B)'' and 
                inserting ``not subject to cost sharing under 
                subsection (a) due to the application of 
                paragraph (1)(B)'';
                  (E) in subsection (e)(2)(A)--
                          (i) by amending the heading to read 
                        as follows: ``Individuals with family 
                        income between 100 and 150 percent of 
                        the poverty line.--''; and
                          (ii) by striking ``under subsection 
                        (b)(1)'' and inserting ``under 
                        subsection (b)(1)(B)(ii)'';
                  (F) in subsection (e)(2)(B), by striking 
                ``who is otherwise not subject to cost sharing 
                under subsection (b)(3)'' and inserting 
                ``described in subsection (a)(2)(A) or who is 
                not subject to cost sharing under subsection 
                (b)(3)(B) with respect to non-emergency 
                services described in paragraph (1)'' and
                  (G) in subsection (e)(2)(C), by inserting 
                ``or section 1916'' after ``subsection (a)''.
          (3) Clarification of cost sharing rules applicable to 
        disabled children provided medical assistance under the 
        eligibility category added by the family opportunity 
        act.--Such section is further amended--
                  (A) in subsection (a)(1), in the second 
                sentence, by striking ``section 1916(g)'' and 
                inserting ``subsection (g) or (i) of section 
                1916''; and
                  (B) in subsection (b)(3)--
                          (i) in subparagraph (A), by adding at 
                        the end the following:
                          ``(vi) Disabled children who are 
                        receiving medical assistance by virtue 
                        of the application of sections 
                        1902(a)(10)(A)(ii)(XIX) and 
                        1902(cc).''; and
                          (ii) in subparagraph (B), by adding 
                        at the end the following:
                          ``(ix) Services furnished to disabled 
                        children who are receiving medical 
                        assistance by virtue of the application 
                        of sections 1902(a)(10)(A)(ii)(XIX) and 
                        1902(cc).''.
          (4) Correction of iv-b references.--Such section is 
        further amended in subsection (b)(3)--
                  (A) in subparagraph (A)(i), by striking ``aid 
                or assistance is made available under part B of 
                title IV to children in foster care'' and 
                inserting ``child welfare services are made 
                available under part B of title IV on the basis 
                of being a child in foster care''; and
                  (B) in subparagraph (B)(i), by striking ``aid 
                or assistance is made available under part B of 
                title IV to children in foster care'' and 
                inserting ``child welfare services are made 
                available under part B of title IV on the basis 
                of being a child in foster care or''.
          (5) Non-emergency services.--Section 1916A(e)(4)(A) 
        of the Social Security Act, as added by section 6043(a) 
        of the Deficit Reduction Act of 2005, is amended by 
        striking ``the physician determines''.
          (6) Effective date.--The amendments made by this 
        subsection shall take effect as if included in the 
        amendments made by sections 6041(a) of the Deficit 
        Reduction Act of 2005, except that insofar as such 
        amendments are to, or relate to, subsection (c) or (e) 
        of section 1916A of the Social Security Act, such 
        amendments shall take effect as if included in the 
        amendments made by section 6042 or 6043, respectively, 
        of the Deficit Reduction Act of 2005.
  (b) Clarifying Treatment of Certain Annuities (Section 
6012).--
          (1) In general.--Section 1917(c)(1)(F)(i) of the 
        Social Security Act (42 U.S.C. 1396p(c)(1)(F)(i)), as 
        added by section 6012(b) of the Deficit Reduction Act 
        of 2005, is amended by striking ``annuitant'' and 
        inserting ``institutionalized individual''.
          (2) Effective date.--The amendment made by paragraph 
        (1) shall be effective as if included in the enactment 
        of section 6012 of the Deficit Reduction Act of 2005.
  (c) Additional Miscellaneous Technical Corrections.--
          (1) Documentation (section 6036).--
                  (A) In general.--Effective as if included in 
                the amendment made by section 6036(a)(2) of the 
                Deficit Reduction Act of 2005, section 1903(x) 
                of the Social Security Act (42 U.S.C. 
                1396b(x)), as inserted by such section 
                6036(a)(2), is amended--
                          (i) in paragraph (1), by striking 
                        ``(i)(23)'' and inserting ``(i)(22)'';
                          (ii) in paragraph (2)--
                                  (I) in the matter preceding 
                                subparagraph (A), by striking 
                                ``alien'' and inserting 
                                ``individual declaring to be a 
                                citizen or national of the 
                                United States'';
                                  (II) by striking subparagraph 
                                (B) and inserting the 
                                following:
                  ``(B) and is receiving--
                          ``(i) disability insurance benefits 
                        under section 223 or monthly insurance 
                        benefits under section 202 based on 
                        such individual's disability (as 
                        defined in section 223(d)); or
                          ``(ii) supplemental security income 
                        benefits under title XVI;'';
                                  (III) in subparagraph (C)--
                                          (aa) by striking 
                                        ``other''; and
                                          (bb) by striking 
                                        ``had'' and inserting 
                                        ``has'';
                                  (IV) by redesignating 
                                subparagraph (C) as 
                                subparagraph (D); and
                                  (V) by inserting after 
                                subparagraph (B) the following 
                                new subparagraph:
                  ``(C) and with respect to whom--
                          ``(i) child welfare services are made 
                        available under part B of title IV on 
                        the basis of being a child in foster 
                        care; or
                          ``(ii) adoption or foster care 
                        assistance is made available under part 
                        E of title IV; or''; and
                          (iii) in paragraph (3)(C)(iii), by 
                        striking ``I-97'' and inserting ``I-
                        197''.
                  (B) Assurance of state foster care agency 
                verification of citizenship or legal status.--
                          (i) State plan amendment.--Section 
                        471(a) of the Social Security Act (42 
                        U.S.C. 671(a)) is amended--
                                  (I) in paragraph (25), by 
                                striking ``and'' at the end;
                                  (II) in paragraph (26)(C), by 
                                striking the period at the end 
                                and inserting ``; and''; and
                                  (III) by adding at the end 
                                the following:
          ``(27) provides that, with respect to any child in 
        foster care under the responsibility of the State under 
        this part or part B and without regard to whether 
        foster care maintenance payments are made under section 
        472 on behalf of the child, the State has in effect 
        procedures for verifying the citizenship or immigration 
        status of the child.''.
                          (ii) Inclusion in reviews of child 
                        and family services programs.--Section 
                        1123A(b)(2) of the Social Security Act 
                        (42 U.S.C. 1320a-2a(b)(2)) is amended 
                        by inserting ``(which shall include 
                        determining whether the State program 
                        is in conformity with the requirement 
                        of section 471(a)(27))'' after 
                        ``review''.
                          (iii) Effective date.--The amendments 
                        made by this subparagraph shall take 
                        effect on the date that is 6 months 
                        after the date of the enactment of this 
                        Act.
          (2) Miscellaneous technical corrections.--
                  (A) Effective as if included in the enactment 
                of the Deficit Reduction Act of 2005 (Public 
                Law 109-171), the following sections of such 
                Act are amended as follows:
                          (i) Section 5114(a)(2) is amended by 
                        striking ``section 1842(b)(6)(F) of 
                        such Act (42 U.S.C. 1395u(b)(6)(F))'' 
                        and inserting ``section 1842(b)(6) of 
                        such Act (42 U.S.C. 1395u(b)(6))''.
                          (ii) Section 6003(b)(2) is amended, 
                        by striking ``subsection (k)'' and 
                        inserting ``subsection (k)(1)''.
                          (iii) Sections 6031(b), 6032(b), and 
                        6035(c) are each amended by striking 
                        ``section 6035(e)'' and inserting 
                        ``section 6034(e)''.
                          (iv) Section 6034(b) is amended by 
                        striking ``section 6033(a)'' and 
                        inserting ``section 6032(a)''.
                          (v) Section 6036 is amended--
                                  (I) in subsection (b), by 
                                striking ``section 1903(z)'' 
                                and inserting ``section 
                                1903(x)''; and
                                  (II) in subsection (c), by 
                                striking ``(i)(23)'' and 
                                inserting ``(i)(22)''.
                  (B) Effective as if included in the amendment 
                made by section 6015(a)(1) of the Deficit 
                Reduction Act of 2005, section 
                1919(c)(5)(A)(i)(II) of the Social Security Act 
                (42 U.S.C. 1396r(c)(5)(A)(i)(II)) is amended by 
                striking ``clause (v)'' and inserting 
                ``subparagraph (B)(v)''.

                      DIVISION C--OTHER PROVISIONS

                TITLE I--GULF OF MEXICO ENERGY SECURITY

SEC. 101. SHORT TITLE.

  This title may be cited as the ``Gulf of Mexico Energy 
Security Act of 2006''.

SEC. 102. DEFINITIONS.

  In this title:
          (1) 181 area.--The term ``181 Area'' means the area 
        identified in map 15, page 58, of the Proposed Final 
        Outer Continental Shelf Oil and Gas Leasing Program for 
        1997-2002, dated August 1996, of the Minerals 
        Management Service, available in the Office of the 
        Director of the Minerals Management Service, excluding 
        the area offered in OCS Lease Sale 181, held on 
        December 5, 2001.
          (2) 181 south area.--The term ``181 South Area'' 
        means any area--
                  (A) located--
                          (i) south of the 181 Area;
                          (ii) west of the Military Mission 
                        Line; and
                          (iii) in the Central Planning Area;
                  (B) excluded from the Proposed Final Outer 
                Continental Shelf Oil and Gas Leasing Program 
                for 1997-2002, dated August 1996, of the 
                Minerals Management Service; and
                  (C) included in the areas considered for oil 
                and gas leasing, as identified in map 8, page 
                37 of the document entitled ``Draft Proposed 
                Program Outer Continental Shelf Oil and Gas 
                Leasing Program 2007-2012'', dated February 
                2006.
          (3) Bonus or royalty credit.--The term ``bonus or 
        royalty credit'' means a legal instrument or other 
        written documentation, or an entry in an account 
        managed by the Secretary, that may be used in lieu of 
        any other monetary payment for--
                  (A) a bonus bid for a lease on the outer 
                Continental Shelf; or
                  (B) a royalty due on oil or gas production 
                from any lease located on the outer Continental 
                Shelf.
          (4) Central planning area.--The term ``Central 
        Planning Area'' means the Central Gulf of Mexico 
        Planning Area of the outer Continental Shelf, as 
        designated in the document entitled ``Draft Proposed 
        Program Outer Continental Shelf Oil and Gas Leasing 
        Program 2007-2012'', dated February 2006.
          (5) Eastern planning area.--The term ``Eastern 
        Planning Area'' means the Eastern Gulf of Mexico 
        Planning Area of the outer Continental Shelf, as 
        designated in the document entitled ``Draft Proposed 
        Program Outer Continental Shelf Oil and Gas Leasing 
        Program 2007-2012'', dated February 2006.
          (6) 2002-2007 planning area.--The term ``2002-2007 
        planning area'' means any area--
                  (A) located in--
                          (i) the Eastern Planning Area, as 
                        designated in the Proposed Final Outer 
                        Continental Shelf Oil and Gas Leasing 
                        Program 2002-2007, dated April 2002, of 
                        the Minerals Management Service;
                          (ii) the Central Planning Area, as 
                        designated in the Proposed Final Outer 
                        Continental Shelf Oil and Gas Leasing 
                        Program 2002-2007, dated April 2002, of 
                        the Minerals Management Service; or
                          (iii) the Western Planning Area, as 
                        designated in the Proposed Final Outer 
                        Continental Shelf Oil and Gas Leasing 
                        Program 2002-2007, dated April 2002, of 
                        the Minerals Management Service; and
                  (B) not located in--
                          (i) an area in which no funds may be 
                        expended to conduct offshore 
                        preleasing, leasing, and related 
                        activities under sections 104 through 
                        106 of the Department of the Interior, 
                        Environment, and Related Agencies 
                        Appropriations Act, 2006 (Public Law 
                        109-54; 119 Stat. 521) (as in effect on 
                        August 2, 2005);
                          (ii) an area withdrawn from leasing 
                        under the ``Memorandum on Withdrawal of 
                        Certain Areas of the United States 
                        Outer Continental Shelf from Leasing 
                        Disposition'', from 34 Weekly Comp. 
                        Pres. Doc. 1111, dated June 12, 1998; 
                        or
                          (iii) the 181 Area or 181 South Area.
          (7) Gulf producing state.--The term ``Gulf producing 
        State'' means each of the States of Alabama, Louisiana, 
        Mississippi, and Texas.
          (8) Military mission line.--The term ``Military 
        Mission Line'' means the north-south line at 8641' W. 
        longitude.
          (9) Qualified outer continental shelf revenues.--
                  (A) In general.--The term ``qualified outer 
                Continental Shelf revenues'' means--
                          (i) in the case of each of fiscal 
                        years 2007 through 2016, all rentals, 
                        royalties, bonus bids, and other sums 
                        due and payable to the United States 
                        from leases entered into on or after 
                        the date of enactment of this Act for--
                                  (I) areas in the 181 Area 
                                located in the Eastern Planning 
                                Area; and
                                  (II) the 181 South Area; and
                          (ii) in the case of fiscal year 2017 
                        and each fiscal year thereafter, all 
                        rentals, royalties, bonus bids, and 
                        other sums due and payable to the 
                        United States received on or after 
                        October 1, 2016, from leases entered 
                        into on or after the date of enactment 
                        of this Act for--
                                  (I) the 181 Area;
                                  (II) the 181 South Area; and
                                  (III) the 2002-2007 planning 
                                area.
                  (B) Exclusions.--The term ``qualified outer 
                Continental Shelf revenues'' does not include--
                          (i) revenues from the forfeiture of a 
                        bond or other surety securing 
                        obligations other than royalties, civil 
                        penalties, or royalties taken by the 
                        Secretary in-kind and not sold; or
                          (ii) revenues generated from leases 
                        subject to section 8(g) of the Outer 
                        Continental Shelf Lands Act (43 U.S.C. 
                        1337(g)).
          (10) Coastal political subdivision.--The term 
        ``coastal political subdivision'' means a political 
        subdivision of a Gulf producing State any part of which 
        political subdivision is--
                  (A) within the coastal zone (as defined in 
                section 304 of the Coastal Zone Management Act 
                of 1972 (16 U.S.C. 1453)) of the Gulf producing 
                State as of the date of enactment of this Act; 
                and
                  (B) not more than 200 nautical miles from the 
                geographic center of any leased tract.
          (11) Secretary.--The term ``Secretary'' means the 
        Secretary of the Interior.

SEC. 103. OFFSHORE OIL AND GAS LEASING IN 181 AREA AND 181 SOUTH AREA 
                    OF GULF OF MEXICO.

  (a) 181 Area Lease Sale.--Except as provided in section 104, 
the Secretary shall offer the 181 Area for oil and gas leasing 
pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.) as soon as practicable, but not later than 1 
year, after the date of enactment of this Act.
  (b) 181 South Area Lease Sale.--The Secretary shall offer the 
181 South Area for oil and gas leasing pursuant to the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as 
practicable after the date of enactment of this Act.
  (c) Leasing Program.--The 181 Area and 181 South Area shall 
be offered for lease under this section notwithstanding the 
omission of the 181 Area or the 181 South Area from any outer 
Continental Shelf leasing program under section 18 of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1344).
  (d) Conforming Amendment.--Section 105 of the Department of 
the Interior, Environment, and Related Agencies Appropriations 
Act, 2006 (Public Law 109-54; 119 Stat. 522) is amended by 
inserting ``(other than the 181 South Area (as defined in 
section 102 of the Gulf of Mexico Energy Security Act of 
2006))'' after ``lands located outside Sale 181''.

SEC. 104. MORATORIUM ON OIL AND GAS LEASING IN CERTAIN AREAS OF GULF OF 
                    MEXICO.

  (a) In General.--Effective during the period beginning on the 
date of enactment of this Act and ending on June 30, 2022, the 
Secretary shall not offer for leasing, preleasing, or any 
related activity--
          (1) any area east of the Military Mission Line in the 
        Gulf of Mexico;
          (2) any area in the Eastern Planning Area that is 
        within 125 miles of the coastline of the State of 
        Florida; or
          (3) any area in the Central Planning Area that is--
                  (A) within--
                          (i) the 181 Area; and
                          (ii) 100 miles of the coastline of 
                        the State of Florida; or
                  (B)(i) outside the 181 Area;
                  (ii) east of the western edge of the 
                Pensacola Official Protraction Diagram (UTM X 
                coordinate 1,393,920 (NAD 27 feet)); and
                  (iii) within 100 miles of the coastline of 
                the State of Florida.
  (b) Military Mission Line.--Notwithstanding subsection (a), 
the United States reserves the right to designate by and 
through the Secretary of Defense, with the approval of the 
President, national defense areas on the outer Continental 
Shelf pursuant to section 12(d) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1341(d)).
  (c) Exchange of Certain Leases.--
          (1) In general.--The Secretary shall permit any 
        person that, as of the date of enactment of this Act, 
        has entered into an oil or gas lease with the Secretary 
        in any area described in paragraph (2) or (3) of 
        subsection (a) to exchange the lease for a bonus or 
        royalty credit that may only be used in the Gulf of 
        Mexico.
          (2) Valuation of existing lease.--The amount of the 
        bonus or royalty credit for a lease to be exchanged 
        shall be equal to--
                  (A) the amount of the bonus bid; and
                  (B) any rental paid for the lease as of the 
                date the lessee notifies the Secretary of the 
                decision to exchange the lease.
          (3) Revenue distribution.--No bonus or royalty credit 
        may be used under this subsection in lieu of any 
        payment due under, or to acquire any interest in, a 
        lease subject to the revenue distribution provisions of 
        section 8(g) of the Outer Continental Shelf Lands Act 
        (43 U.S.C. 1337(g)).
          (4) Regulations.--Not later than 1 year after the 
        date of enactment of this Act, the Secretary shall 
        promulgate regulations that shall provide a process 
        for--
                  (A) notification to the Secretary of a 
                decision to exchange an eligible lease;
                  (B) issuance of bonus or royalty credits in 
                exchange for relinquishment of the existing 
                lease;
                  (C) transfer of the bonus or royalty credit 
                to any other person; and
                  (D) determining the proper allocation of 
                bonus or royalty credits to each lease interest 
                owner.

SEC. 105. DISPOSITION OF QUALIFIED OUTER CONTINENTAL SHELF REVENUES 
                    FROM 181 AREA, 181 SOUTH AREA, AND 2002-2007 
                    PLANNING AREAS OF GULF OF MEXICO.

  (a) In General.--Notwithstanding section 9 of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1338) and subject to the 
other provisions of this section, for each applicable fiscal 
year, the Secretary of the Treasury shall deposit--
          (1) 50 percent of qualified outer Continental Shelf 
        revenues in the general fund of the Treasury; and
          (2) 50 percent of qualified outer Continental Shelf 
        revenues in a special account in the Treasury from 
        which the Secretary shall disburse--
                  (A) 75 percent to Gulf producing States in 
                accordance with subsection (b); and
                  (B) 25 percent to provide financial 
                assistance to States in accordance with section 
                6 of the Land and Water Conservation Fund Act 
                of 1965 (16 U.S.C. 460l-8), which shall be 
                considered income to the Land and Water 
                Conservation Fund for purposes of section 2 of 
                that Act (16 U.S.C. 460l-5).
  (b) Allocation Among Gulf Producing States and Coastal 
Political Subdivisions.--
          (1) Allocation among gulf producing states for fiscal 
        years 2007 through 2016.--
                  (A) In general.--Subject to subparagraph (B), 
                effective for each of fiscal years 2007 through 
                2016, the amount made available under 
                subsection (a)(2)(A) shall be allocated to each 
                Gulf producing State in amounts (based on a 
                formula established by the Secretary by 
                regulation) that are inversely proportional to 
                the respective distances between the point on 
                the coastline of each Gulf producing State that 
                is closest to the geographic center of the 
                applicable leased tract and the geographic 
                center of the leased tract.
                  (B) Minimum allocation.--The amount allocated 
                to a Gulf producing State each fiscal year 
                under subparagraph (A) shall be at least 10 
                percent of the amounts available under 
                subsection (a)(2)(A).
          (2) Allocation among gulf producing states for fiscal 
        year 2017 and thereafter.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), effective for fiscal year 2017 and 
                each fiscal year thereafter--
                          (i) the amount made available under 
                        subsection (a)(2)(A) from any lease 
                        entered into within the 181 Area or the 
                        181 South Area shall be allocated to 
                        each Gulf producing State in amounts 
                        (based on a formula established by the 
                        Secretary by regulation) that are 
                        inversely proportional to the 
                        respective distances between the point 
                        on the coastline of each Gulf producing 
                        State that is closest to the geographic 
                        center of the applicable leased tract 
                        and the geographic center of the leased 
                        tract; and
                          (ii) the amount made available under 
                        subsection (a)(2)(A) from any lease 
                        entered into within the 2002-2007 
                        planning area shall be allocated to 
                        each Gulf producing State in amounts 
                        that are inversely proportional to the 
                        respective distances between the point 
                        on the coastline of each Gulf producing 
                        State that is closest to the geographic 
                        center of each historical lease site 
                        and the geographic center of the 
                        historical lease site, as determined by 
                        the Secretary.
                  (B) Minimum allocation.--The amount allocated 
                to a Gulf producing State each fiscal year 
                under subparagraph (A) shall be at least 10 
                percent of the amounts available under 
                subsection (a)(2)(A).
                  (C) Historical lease sites.--
                          (i) In general.--Subject to clause 
                        (ii), for purposes of subparagraph 
                        (A)(ii), the historical lease sites in 
                        the 2002-2007 planning area shall 
                        include all leases entered into by the 
                        Secretary for an area in the Gulf of 
                        Mexico during the period beginning on 
                        October 1, 1982 (or an earlier date if 
                        practicable, as determined by the 
                        Secretary), and ending on December 31, 
                        2015.
                          (ii) Adjustment.--Effective January 
                        1, 2022, and every 5 years thereafter, 
                        the ending date described in clause (i) 
                        shall be extended for an additional 5 
                        calendar years.
          (3) Payments to coastal political subdivisions.--
                  (A) In general.--The Secretary shall pay 20 
                percent of the allocable share of each Gulf 
                producing State, as determined under paragraphs 
                (1) and (2), to the coastal political 
                subdivisions of the Gulf producing State.
                  (B) Allocation.--The amount paid by the 
                Secretary to coastal political subdivisions 
                shall be allocated to each coastal political 
                subdivision in accordance with subparagraphs 
                (B), (C), and (E) of section 31(b)(4) of the 
                Outer Continental Shelf Lands Act (43 U.S.C. 
                1356a(b)(4)).
  (c) Timing.--The amounts required to be deposited under 
paragraph (2) of subsection (a) for the applicable fiscal year 
shall be made available in accordance with that paragraph 
during the fiscal year immediately following the applicable 
fiscal year.
  (d) Authorized Uses.--
          (1) In general.--Subject to paragraph (2), each Gulf 
        producing State and coastal political subdivision shall 
        use all amounts received under subsection (b) in 
        accordance with all applicable Federal and State laws, 
        only for 1 or more of the following purposes:
                  (A) Projects and activities for the purposes 
                of coastal protection, including conservation, 
                coastal restoration, hurricane protection, and 
                infrastructure directly affected by coastal 
                wetland losses.
                  (B) Mitigation of damage to fish, wildlife, 
                or natural resources.
                  (C) Implementation of a federally-approved 
                marine, coastal, or comprehensive conservation 
                management plan.
                  (D) Mitigation of the impact of outer 
                Continental Shelf activities through the 
                funding of onshore infrastructure projects.
                  (E) Planning assistance and the 
                administrative costs of complying with this 
                section.
          (2) Limitation.--Not more than 3 percent of amounts 
        received by a Gulf producing State or coastal political 
        subdivision under subsection (b) may be used for the 
        purposes described in paragraph (1)(E).
  (e) Administration.--Amounts made available under subsection 
(a)(2) shall--
          (1) be made available, without further appropriation, 
        in accordance with this section;
          (2) remain available until expended; and
          (3) be in addition to any amounts appropriated 
        under--
                  (A) the Outer Continental Shelf Lands Act (43 
                U.S.C. 1331 et seq.);
                  (B) the Land and Water Conservation Fund Act 
                of 1965 (16 U.S.C. 460l-4 et seq.); or
                  (C) any other provision of law.
  (f) Limitations on Amount of Distributed Qualified Outer 
Continental Shelf Revenues.--
          (1) In general.--Subject to paragraph (2), the total 
        amount of qualified outer Continental Shelf revenues 
        made available under subsection (a)(2) shall not exceed 
        $500,000,000 for each of fiscal years 2016 through 
        2055.
          (2) Expenditures.--For the purpose of paragraph (1), 
        for each of fiscal years 2016 through 2055, 
        expenditures under subsection (a)(2) shall be net of 
        receipts from that fiscal year from any area in the 181 
        Area in the Eastern Planning Area and the 181 South 
        Area.
          (3) Pro rata reductions.--If paragraph (1) limits the 
        amount of qualified outer Continental Shelf revenue 
        that would be paid under subparagraphs (A) and (B) of 
        subsection (a)(2)--
                  (A) the Secretary shall reduce the amount of 
                qualified outer Continental Shelf revenue 
                provided to each recipient on a pro rata basis; 
                and
                  (B) any remainder of the qualified outer 
                Continental Shelf revenues shall revert to the 
                general fund of the Treasury.

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

SEC. 200. SHORT TITLE.

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

               Subtitle A--Mining Control and Reclamation

SEC. 201. ABANDONED MINE RECLAMATION FUND AND PURPOSES.

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

SEC. 202. RECLAMATION FEE.

  (a) Amounts.--
          (1) Fiscal years 2008-2012.--Effective October 1, 
        2007, section 402(a) of the Surface Mining Control and 
        Reclamation Act of 1977 (30 U.S.C. 1232(a)) is 
        amended--
                  (A) by striking ``35'' and inserting 
                ``31.5'';
                  (B) by striking ``15'' and inserting 
                ``13.5''; and
                  (C) by striking ``10 cents'' and inserting 
                ``9 cents''.
          (2) Fiscal years 2013-2021.--Effective October 1, 
        2012, section 402(a) of the Surface Mining Control and 
        Reclamation Act of 1977 (30 U.S.C. 1232(a)) (as amended 
        by paragraph (1)) is amended--
                  (A) by striking ``31.5'' and inserting 
                ``28'';
                  (B) by striking ``13.5'' and inserting 
                ``12''; and
                  (C) by striking ``9 cents'' and inserting ``8 
                cents''.
  (b) Duration.--Effective September 30, 2007, section 402(b) 
of the Surface Mining Control and Reclamation Act of 1977 (30 
U.S.C. 1232(b)) (as amended by section 7007 of the Emergency 
Supplemental Appropriations Act for Defense, the Global War on 
Terror, and Hurricane Recovery, 2006 (Public Law 109-234; 120 
Stat. 484)) is amended by striking ``September 30, 2007'' and 
all that follows through the end of the sentence and inserting 
``September 30, 2021.''.
  (c) Allocation of Funds.--Section 402(g) of the Surface 
Mining Control and Reclamation Act of 1977 (30 U.S.C. 1232(g)) 
is amended--
          (1) in paragraph (1)(D)--
                  (A) by inserting ``(except for grants awarded 
                during fiscal years 2008, 2009, and 2010 to the 
                extent not expended within 5 years)'' after 
                ``this paragraph''; and
                  (B) by striking ``in any area under paragraph 
                (2), (3), (4), or (5)'' and inserting ``under 
                paragraph (5)'';
          (2) by striking paragraph (2) and inserting:
  ``(2) In making the grants referred to in paragraph (1)(C) 
and the grants referred to in paragraph (5), the Secretary 
shall ensure strict compliance by the States and Indian tribes 
with the priorities described in section 403(a) until a 
certification is made under section 411(a).'';
          (3) in paragraph (3)--
                  (A) in the matter preceding subparagraph (A), 
                by striking ``paragraphs (2) and'' and 
                inserting ``paragraph'';
                  (B) in subparagraph (A), by striking 
                ``401(c)(11)'' and inserting ``401(c)(9)''; and
                  (C) by adding at the end the following:
          ``(E) For the purpose of paragraph (8).'';
          (4) in paragraph (5)--
                  (A) by inserting ``(A)'' after ``(5)'';
                  (B) in the first sentence, by striking ``40'' 
                and inserting ``60'';
                  (C) in the last sentence, by striking ``Funds 
                allocated or expended by the Secretary under 
                paragraphs (2), (3), or (4)'' and inserting 
                ``Funds made available under paragraph (3) or 
                (4)''; and
                  (D) by adding at the end the following:
  ``(B) Any amount that is reallocated and available under 
section 411(h)(3) shall be in addition to amounts that are 
allocated under subparagraph (A).''; and
          (5) by striking paragraphs (6) through (8) and 
        inserting the following:
  ``(6)(A) Any State with an approved abandoned mine 
reclamation program pursuant to section 405 may receive and 
retain, without regard to the 3-year limitation referred to in 
paragraph (1)(D), up to 30 percent of the total of the grants 
made annually to the State under paragraphs (1) and (5) if 
those amounts are deposited into an acid mine drainage 
abatement and treatment fund established under State law, from 
which amounts (together with all interest earned on the 
amounts) are expended by the State for the abatement of the 
causes and the treatment of the effects of acid mine drainage 
in a comprehensive manner within qualified hydrologic units 
affected by coal mining practices.
  ``(B) In this paragraph, the term `qualified hydrologic unit' 
means a hydrologic unit--
          ``(i) in which the water quality has been 
        significantly affected by acid mine drainage from coal 
        mining practices in a manner that adversely impacts 
        biological resources; and
          ``(ii) that contains land and water that are--
                  ``(I) eligible pursuant to section 404 and 
                include any of the priorities described in 
                section 403(a); and
                  ``(II) the subject of expenditures by the 
                State from the forfeiture of bonds required 
                under section 509 or from other States sources 
                to abate and treat acid mine drainage.
  ``(7) In complying with the priorities described in section 
403(a), any State or Indian tribe may use amounts available in 
grants made annually to the State or tribe under paragraphs (1) 
and (5) for the reclamation of eligible land and water 
described in section 403(a)(3) before the completion of 
reclamation projects under paragraphs (1) and (2) of section 
403(a) only if the expenditure of funds for the reclamation is 
done in conjunction with the expenditure before, on, or after 
the date of enactment of the Surface Mining Control and 
Reclamation Act Amendments of 2006 of funds for reclamation 
projects under paragraphs (1) and (2) of section 403(a).
  ``(8)(A) In making funds available under this title, the 
Secretary shall ensure that the grant awards total not less 
than $3,000,000 annually to each State and each Indian tribe 
having an approved abandoned mine reclamation program pursuant 
to section 405 and eligible land and water pursuant to section 
404, so long as an allocation of funds to the State or tribe is 
necessary to achieve the priorities stated in paragraphs (1) 
and (2) of section 403(a).
  ``(B) Notwithstanding any other provision of law, this 
paragraph applies to the States of Tennessee and Missouri.''.
  (d) Transfers of Interest Earned by Abandoned Mine 
Reclamation Fund.--Section 402 of the Surface Mining Control 
and Reclamation Act of 1977 (30 U.S.C. 1232) is amended by 
striking subsection (h) and inserting the following:
  ``(h) Transfers of Interest Earned by Fund.--
          ``(1) In general.--
                  ``(A) Transfers to combined benefit fund.--As 
                soon as practicable after the beginning of 
                fiscal year 2007 and each fiscal year 
                thereafter, and before making any allocation 
                with respect to the fiscal year under 
                subsection (g), the Secretary shall use an 
                amount not to exceed the amount of interest 
                that the Secretary estimates will be earned and 
                paid to the fund during the fiscal year to 
                transfer to the Combined Benefit Fund such 
                amounts as are estimated by the trustees of 
                such fund to offset the amount of any deficit 
                in net assets in the Combined Benefit Fund as 
                of October 1, 2006, and to make the transfer 
                described in paragraph (2)(A).
                  ``(B) Transfers to 1992 and 1993 plans.--As 
                soon as practicable after the beginning of 
                fiscal year 2008 and each fiscal year 
                thereafter, and before making any allocation 
                with respect to the fiscal year under 
                subsection (g), the Secretary shall use an 
                amount not to exceed the amount of interest 
                that the Secretary estimates will be earned and 
                paid to the fund during the fiscal year 
                (reduced by the amount used under subparagraph 
                (A)) to make the transfers described in 
                paragraphs (2)(B) and (2)(C).
          ``(2) Transfers described.--The transfers referred to 
        in paragraph (1) are the following:
                  ``(A) United mine workers of america combined 
                benefit fund.--A transfer to the United Mine 
                Workers of America Combined Benefit Fund equal 
                to the amount that the trustees of the Combined 
                Benefit Fund estimate will be expended from the 
                fund for the fiscal year in which the transfer 
                is made, reduced by--
                          ``(i) the amount the trustees of the 
                        Combined Benefit Fund estimate the 
                        Combined Benefit Fund will receive 
                        during the fiscal year in--
                                  ``(I) required premiums; and
                                  ``(II) payments paid by 
                                Federal agencies in connection 
                                with benefits provided by the 
                                Combined Benefit Fund; and
                          ``(ii) the amount the trustees of the 
                        Combined Benefit Fund estimate will be 
                        expended during the fiscal year to 
                        provide health benefits to 
                        beneficiaries who are unassigned 
                        beneficiaries solely as a result of the 
                        application of section 9706(h)(1) of 
                        the Internal Revenue Code of 1986, but 
                        only to the extent that such amount 
                        does not exceed the amounts described 
                        in subsection (i)(1)(A) that the 
                        Secretary estimates will be available 
                        to pay such estimated expenditures.
                  ``(B) United mine workers of america 1992 
                benefit plan.--A transfer to the United Mine 
                Workers of America 1992 Benefit Plan, in an 
                amount equal to the difference between--
                          ``(i) the amount that the trustees of 
                        the 1992 UMWA Benefit Plan estimate 
                        will be expended from the 1992 UMWA 
                        Benefit Plan during the next calendar 
                        year to provide the benefits required 
                        by the 1992 UMWA Benefit Plan on the 
                        date of enactment of this subparagraph; 
                        minus
                          ``(ii) the amount that the trustees 
                        of the 1992 UMWA Benefit Plan estimate 
                        the 1992 UMWA Benefit Plan will receive 
                        during the next calendar year in--
                                  ``(I) required monthly per 
                                beneficiary premiums, including 
                                the amount of any security 
                                provided to the 1992 UMWA 
                                Benefit Plan that is available 
                                for use in the provision of 
                                benefits; and
                                  ``(II) payments paid by 
                                Federal agencies in connection 
                                with benefits provided by the 
                                1992 UMWA benefit plan.
                  ``(C) Multiemployer health benefit plan.--A 
                transfer to the Multiemployer Health Benefit 
                Plan established after July 20, 1992, by the 
                parties that are the settlors of the 1992 UMWA 
                Benefit Plan referred to in subparagraph (B) 
                (referred to in this subparagraph and 
                subparagraph (D) as `the Plan'), in an amount 
                equal to the excess (if any) of--
                          ``(i) the amount that the trustees of 
                        the Plan estimate will be expended from 
                        the Plan during the next calendar year, 
                        to provide benefits no greater than 
                        those provided by the Plan as of 
                        December 31, 2006; over
                          ``(ii) the amount that the trustees 
                        estimated the Plan will receive during 
                        the next calendar year in payments paid 
                        by Federal agencies in connection with 
                        benefits provided by the Plan.
                Such excess shall be calculated by taking into 
                account only those beneficiaries actually 
                enrolled in the Plan as of December 31, 2006, 
                who are eligible to receive benefits under the 
                Plan on the first day of the calendar year for 
                which the transfer is made.
                  ``(D) Individuals considered enrolled.--For 
                purposes of subparagraph (C), any individual 
                who was eligible to receive benefits from the 
                Plan as of the date of enactment of this 
                subsection, even though benefits were being 
                provided to the individual pursuant to a 
                settlement agreement approved by order of a 
                bankruptcy court entered on or before September 
                30, 2004, will be considered to be actually 
                enrolled in the Plan and shall receive benefits 
                from the Plan beginning on December 31, 2006.
          ``(3) Adjustment.--If, for any fiscal year, the 
        amount of a transfer under subparagraph (A), (B), or 
        (C) of paragraph (2) is more or less than the amount 
        required to be transferred under that subparagraph, the 
        Secretary shall appropriately adjust the amount 
        transferred under that subparagraph for the next fiscal 
        year.
          ``(4) Additional amounts.--
                  ``(A) Previously credited interest.--
                Notwithstanding any other provision of law, any 
                interest credited to the fund that has not 
                previously been transferred to the Combined 
                Benefit Fund referred to in paragraph (2)(A) 
                under this section--
                          ``(i) shall be held in reserve by the 
                        Secretary until such time as necessary 
                        to make the payments under 
                        subparagraphs (A) and (B) of subsection 
                        (i)(1), as described in clause (ii); 
                        and
                          ``(ii) in the event that the amounts 
                        described in subsection (i)(1) are 
                        insufficient to make the maximum 
                        payments described in subparagraphs (A) 
                        and (B) of subsection (i)(1), shall be 
                        used by the Secretary to supplement the 
                        payments so that the maximum amount 
                        permitted under those paragraphs is 
                        paid.
                  ``(B) Previously allocated amounts.--All 
                amounts allocated under subsection (g)(2) 
                before the date of enactment of this 
                subparagraph for the program described in 
                section 406, but not appropriated before that 
                date, shall be available to the Secretary to 
                make the transfers described in paragraph (2).
                  ``(C) Adequacy of previously credited 
                interest.--The Secretary shall--
                          ``(i) consult with the trustees of 
                        the plans described in paragraph (2) at 
                        reasonable intervals; and
                          ``(ii) notify Congress if a 
                        determination is made that the amounts 
                        held in reserve under subparagraph (A) 
                        are insufficient to meet future 
                        requirements under subparagraph 
                        (A)(ii).
                  ``(D) Additional reserve amounts.--In 
                addition to amounts held in reserve under 
                subparagraph (A), there is authorized to be 
                appropriated such sums as may be necessary for 
                transfer to the fund to carry out the purposes 
                of subparagraph (A)(ii).
                  ``(E) Inapplicability of cap.--The limitation 
                described in subsection (i)(3)(A) shall not 
                apply to payments made from the reserve fund 
                under this paragraph.
          ``(5) Limitations.--
                  ``(A) Availability of funds for next fiscal 
                year.--The Secretary may make transfers under 
                subparagraphs (B) and (C) of paragraph (2) for 
                a calendar year only if the Secretary 
                determines, using actuarial projections 
                provided by the trustees of the Combined 
                Benefit Fund referred to in paragraph (2)(A), 
                that amounts will be available under paragraph 
                (1), after the transfer, for the next fiscal 
                year for making the transfer under paragraph 
                (2)(A).
                  ``(B) Rate of contributions of obligors.--
                          ``(i) In general.--
                                  ``(I) Rate.--A transfer under 
                                paragraph (2)(C) shall not be 
                                made for a calendar year unless 
                                the persons that are obligated 
                                to contribute to the plan 
                                referred to in paragraph (2)(C) 
                                on the date of the transfer are 
                                obligated to make the 
                                contributions at rates that are 
                                no less than those in effect on 
                                the date which is 30 days 
                                before the date of enactment of 
                                this subsection.
                                  ``(II) Application.--The 
                                contributions described in 
                                subclause (I) shall be applied 
                                first to the provision of 
                                benefits to those plan 
                                beneficiaries who are not 
                                described in paragraph 
                                (2)(C)(ii).
                          ``(ii) Initial contributions.--
                                  ``(I) In general.--From the 
                                date of enactment of the 
                                Surface Mining Control and 
                                Reclamation Act Amendments of 
                                2006 through December 31, 2010, 
                                the persons that, on the date 
                                of enactment of that Act, are 
                                obligated to contribute to the 
                                plan referred to in paragraph 
                                (2)(C) shall be obligated, 
                                collectively, to make 
                                contributions equal to the 
                                amount described in paragraph 
                                (2)(C), less the amount 
                                actually transferred due to the 
                                operation of subparagraph (C).
                                  ``(II) First calendar year.--
                                Calendar year 2006 is the first 
                                calendar year for which 
                                contributions are required 
                                under this clause.
                                  ``(III) Amount of 
                                contribution for 2006.--Except 
                                as provided in subclause (IV), 
                                the amount described in 
                                paragraph (2)(C) for calendar 
                                year 2006 shall be calculated 
                                as if paragraph (2)(C) had been 
                                in effect during 2005.
                                  ``(IV) Limitation.--The 
                                contributions required under 
                                this clause for calendar year 
                                2006 shall not exceed the 
                                amount necessary for solvency 
                                of the plan described in 
                                paragraph (2)(C), measured as 
                                of December 31, 2006 and taking 
                                into account all assets held by 
                                the plan as of that date.
                          ``(iii) Division.--The collective 
                        annual contribution obligation required 
                        under clause (ii) shall be divided 
                        among the persons subject to the 
                        obligation, and applied uniformly, 
                        based on the hours worked for which 
                        contributions referred to in clause (i) 
                        would be owed.
                  ``(C) Phase-in of transfers.--For each of 
                calendar years 2008 through 2010, the transfers 
                required under subparagraphs (B) and (C) of 
                paragraph (2) shall equal the following 
                amounts:
                          ``(i) For calendar year 2008, the 
                        Secretary shall make transfers equal to 
                        25 percent of the amounts that would 
                        otherwise be required under 
                        subparagraphs (B) and (C) of paragraph 
                        (2).
                          ``(ii) For calendar year 2009, the 
                        Secretary shall make transfers equal to 
                        50 percent of the amounts that would 
                        otherwise be required under 
                        subparagraphs (B) and (C) of paragraph 
                        (2).
                          ``(iii) For calendar year 2010, the 
                        Secretary shall make transfers equal to 
                        75 percent of the amounts that would 
                        otherwise be required under 
                        subparagraphs (B) and (C) of paragraph 
                        (2).
  ``(i) Funding.--
          ``(1) In general.--Subject to paragraph (3), out of 
        any funds in the Treasury not otherwise appropriated, 
        the Secretary of the Treasury shall transfer to the 
        plans described in subsection (h)(2) such sums as are 
        necessary to pay the following amounts:
                  ``(A) To the Combined Fund (as defined in 
                section 9701(a)(5) of the Internal Revenue Code 
                of 1986 and referred to in this paragraph as 
                the `Combined Fund'), the amount that the 
                trustees of the Combined Fund estimate will be 
                expended from premium accounts maintained by 
                the Combined Fund for the fiscal year to 
                provide benefits for beneficiaries who are 
                unassigned beneficiaries solely as a result of 
                the application of section 9706(h)(1) of the 
                Internal Revenue Code of 1986, subject to the 
                following limitations:
                          ``(i) For fiscal year 2008, the 
                        amount paid under this subparagraph 
                        shall equal--
                                  ``(I) the amount described in 
                                subparagraph (A); minus
                                  ``(II) the amounts required 
                                under section 9706(h)(3)(A) of 
                                the Internal Revenue Code of 
                                1986.
                          ``(ii) For fiscal year 2009, the 
                        amount paid under this subparagraph 
                        shall equal--
                                  ``(I) the amount described in 
                                subparagraph (A); minus
                                  ``(II) the amounts required 
                                under section 9706(h)(3)(B) of 
                                the Internal Revenue Code of 
                                1986.
                          ``(iii) For fiscal year 2010, the 
                        amount paid under this subparagraph 
                        shall equal--
                                  ``(I) the amount described in 
                                subparagraph (A); minus
                                  ``(II) the amounts required 
                                under section 9706(h)(3)(C) of 
                                the Internal Revenue Code of 
                                1986.
                  ``(B) On certification by the trustees of any 
                plan described in subsection (h)(2) that the 
                amount available for transfer by the Secretary 
                pursuant to this section (determined after 
                application of any limitation under subsection 
                (h)(5)) is less than the amount required to be 
                transferred, to the plan the amount necessary 
                to meet the requirement of subsection (h)(2).
                  ``(C) To the Combined Fund, $9,000,000 on 
                October 1, 2007, $9,000,000 on October 1, 2008, 
                and $9,000,000 on October 1, 2009 (which 
                amounts shall not be exceeded) to provide a 
                refund of any premium (as described in section 
                9704(a) of the Internal Revenue Code of 1986) 
                paid on or before September 7, 2000, to the 
                Combined Fund, plus interest on the premium 
                calculated at the rate of 7.5 percent per year, 
                on a proportional basis and to be paid not 
                later than 60 days after the date on which each 
                payment is received by the Combined Fund, to 
                those signatory operators (to the extent that 
                the Combined Fund has not previously returned 
                the premium amounts to the operators), or any 
                related persons to the operators (as defined in 
                section 9701(c) of the Internal Revenue Code of 
                1986), or their heirs, successors, or assigns 
                who have been denied the refunds as the result 
                of final judgments or settlements if--
                          ``(i) prior to the date of enactment 
                        of this paragraph, the signatory 
                        operator (or any related person to the 
                        operator)--
                                  ``(I) had all of its 
                                beneficiary assignments made 
                                under section 9706 of the 
                                Internal Revenue Code of 1986 
                                voided by the Commissioner of 
                                the Social Security 
                                Administration; and
                                  ``(II) was subject to a final 
                                judgment or final settlement of 
                                litigation adverse to a claim 
                                by the operator that the 
                                assignment of beneficiaries 
                                under section 9706 of the 
                                Internal Revenue Code of 1986 
                                was unconstitutional as applied 
                                to the operator; and
                          ``(ii) on or before September 7, 
                        2000, the signatory operator (or any 
                        related person to the operator) had 
                        paid to the Combined Fund any premium 
                        amount that had not been refunded.
          ``(2) Payments to states and indian tribes.--Subject 
        to paragraph (3), out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury 
        shall transfer to the Secretary of the Interior for 
        distribution to States and Indian tribes such sums as 
        are necessary to pay amounts described in paragraphs 
        (1)(A) and (2)(A) of section 411(h).
          ``(3) Limitations.--
                  ``(A) Cap.--The total amount transferred 
                under this subsection for any fiscal year shall 
                not exceed $490,000,000.
                  ``(B) Insufficient amounts.--In a case in 
                which the amount required to be transferred 
                without regard to this paragraph exceeds the 
                maximum annual limitation in subparagraph (A), 
                the Secretary shall adjust the transfers of 
                funds so that--
                          ``(i) each transfer for the fiscal 
                        year is a percentage of the amount 
                        described;
                          ``(ii) the amount is determined 
                        without regard to subsection (h)(5)(A); 
                        and
                          ``(iii) the percentage transferred is 
                        the same for all transfers made under 
                        this subsection for the fiscal year.
          ``(4) Availability of funds.--Funds shall be 
        transferred under paragraph (1) and (2) beginning in 
        fiscal year 2008 and each fiscal year thereafter, and 
        shall remain available until expended.''.

SEC. 203. OBJECTIVES OF FUND.

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

SEC. 204. RECLAMATION OF RURAL LAND.

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

SEC. 205. LIENS.

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

SEC. 206. CERTIFICATION.

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

SEC. 207. REMINING INCENTIVES.

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

``SEC. 415. REMINING INCENTIVES.

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

SEC. 208. EXTENSION OF LIMITATION ON APPLICATION OF PROHIBITION ON 
                    ISSUANCE OF PERMIT.

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

SEC. 209. TRIBAL REGULATION OF SURFACE COAL MINING AND RECLAMATION 
                    OPERATIONS.

  (a) In General.--Section 710 of the Surface Mining Control 
and Reclamation Act of 1977 (30 U.S.C. 1300) is amended by 
adding at the end the following:
  ``(j) Tribal Regulatory Authority.--
          ``(1) Tribal regulatory programs.--
                  ``(A) In general.--Notwithstanding any other 
                provision of law, an Indian tribe may apply 
                for, and obtain the approval of, a tribal 
                program under section 503 regulating in whole 
                or in part surface coal mining and reclamation 
                operations on reservation land under the 
                jurisdiction of the Indian tribe using the 
                procedures of section 504(e).
                  ``(B) References to state.--For purposes of 
                this subsection and the implementation and 
                administration of a tribal program under title 
                V, any reference to a `State' in this Act shall 
                be considered to be a reference to a `tribe'.
          ``(2) Conflicts of interest.--
                  ``(A) In general.--The fact that an 
                individual is a member of an Indian tribe does 
                not in itself constitute a violation of section 
                201(f).
                  ``(B) Employees of tribal regulatory 
                authority.--Any employee of a tribal regulatory 
                authority shall not be eligible for a per 
                capita distribution of any proceeds from coal 
                mining operations conducted on Indian 
                reservation lands under this Act.
          ``(3) Sovereign immunity.--To receive primary 
        regulatory authority under section 504(e), an Indian 
        tribe shall waive sovereign immunity for purposes of 
        section 520 and paragraph (4).
          ``(4) Judicial review.--
                  ``(A) Civil actions.--
                          ``(i) In general.--After exhausting 
                        all tribal remedies with respect to a 
                        civil action arising under a tribal 
                        program approved under section 504(e), 
                        an interested party may file a petition 
                        for judicial review of the civil action 
                        in the United States circuit court for 
                        the circuit in which the surface coal 
                        mining operation named in the petition 
                        is located.
                          ``(ii) Scope of review.--
                                  ``(I) Questions of law.--The 
                                United States circuit court 
                                shall review de novo any 
                                questions of law under clause 
                                (i).
                                  ``(II) Findings of fact.--The 
                                United States circuit court 
                                shall review findings of fact 
                                under clause (i) using a 
                                clearly erroneous standard.
                  ``(B) Criminal actions.--Any criminal action 
                brought under section 518 with respect to 
                surface coal mining or reclamation operations 
                on Indian reservation lands shall be brought 
                in--
                          ``(i) the United States District 
                        Court for the District of Columbia; or
                          ``(ii) the United States district 
                        court in which the criminal activity is 
                        alleged to have occurred.
          ``(5) Grants.--
                  ``(A) In general.--Except as provided in 
                subparagraph (B), grants for developing, 
                administering, and enforcing tribal programs 
                approved in accordance with section 504(e) 
                shall be provided to an Indian tribe in 
                accordance with section 705.
                  ``(B) Exception.--Notwithstanding 
                subparagraph (A), the Federal share of the 
                costs of developing, administering, and 
                enforcing an approved tribal program shall be 
                100 percent.
          ``(6) Report.--Not later than 18 months after the 
        date on which a tribal program is approved under 
        subsection (e) of section 504, the Secretary shall 
        submit to the appropriate committees of Congress a 
        report, developed in cooperation with the applicable 
        Indian tribe, on the tribal program that includes a 
        recommendation of the Secretary on whether primary 
        regulatory authority under that subsection should be 
        expanded to include additional Indian lands.''.
  (b) Conforming Amendment.--Section 710(i) of the Surface 
Mining Control and Reclamation Act of 1977 (30 U.S.C. 1300(i)) 
is amended in the first sentence by striking ``, except'' and 
all that follows through ``section 503''.

          Subtitle B--Coal Industry Retiree Health Benefit Act

SEC. 211. CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST RELIEVED 
                    OF LIABILITY IF PREMIUMS PREPAID.

  (a) Combined Benefit Fund.--Section 9704 of the Internal 
Revenue Code of 1986 (relating to liability of assigned 
operators) is amended by adding at the end the following new 
subsection:
  ``(j) Prepayment of Premium Liability.--
          ``(1) In general.--If--
                  ``(A) a payment meeting the requirements of 
                paragraph (3) is made to the Combined Fund by 
                or on behalf of--
                          ``(i) any assigned operator to which 
                        this subsection applies, or
                          ``(ii) any related person to any 
                        assigned operator described in clause 
                        (i), and
                  ``(B) the common parent of the controlled 
                group of corporations described in paragraph 
                (2)(B) is jointly and severally liable for any 
                premium under this section which (but for this 
                subsection) would be required to be paid by the 
                assigned operator or related person,
        then such common parent (and no other person) shall be 
        liable for such premium.
          ``(2) Assigned operators to which subsection 
        applies.--
                  ``(A) In general.--This subsection shall 
                apply to any assigned operator if--
                          ``(i) the assigned operator (or a 
                        related person to the assigned 
                        operator)--
                                  ``(I) made contributions to 
                                the 1950 UMWA Benefit Plan and 
                                the 1974 UMWA Benefit Plan for 
                                employment during the period 
                                covered by the 1988 agreement; 
                                and
                                  ``(II) is not a 1988 
                                agreement operator,
                          ``(ii) the assigned operator (and all 
                        related persons to the assigned 
                        operator) are not actively engaged in 
                        the production of coal as of July 1, 
                        2005, and
                          ``(iii) the assigned operator was, as 
                        of July 20, 1992, a member of a 
                        controlled group of corporations 
                        described in subparagraph (B).
                  ``(B) Controlled group of corporations.--A 
                controlled group of corporations is described 
                in this subparagraph if the common parent of 
                such group is a corporation the shares of which 
                are publicly traded on a United States 
                exchange.
                  ``(C) Coordination with repeal of 
                assignments.--A person shall not fail to be 
                treated as an assigned operator to which this 
                subsection applies solely because the person 
                ceases to be an assigned operator by reason of 
                section 9706(h)(1) if the person otherwise 
                meets the requirements of this subsection and 
                is liable for the payment of premiums under 
                section 9706(h)(3).
                  ``(D) Controlled group.--For purposes of this 
                subsection, the term `controlled group of 
                corporations' has the meaning given such term 
                by section 52(a).
          ``(3) Requirements.--A payment meets the requirements 
        of this paragraph if--
                  ``(A) the amount of the payment is not less 
                than the present value of the total premium 
                liability under this chapter with respect to 
                the Combined Fund of the assigned operators or 
                related persons described in paragraph (1) or 
                their assignees, as determined by the 
                operator's or related person's enrolled actuary 
                (as defined in section 7701(a)(35)) using 
                actuarial methods and assumptions each of which 
                is reasonable and which are reasonable in the 
                aggregate, as determined by such enrolled 
                actuary;
                  ``(B) such enrolled actuary files with the 
                Secretary of Labor a signed actuarial report 
                containing--
                          ``(i) the date of the actuarial 
                        valuation applicable to the report; and
                          ``(ii) a statement by the enrolled 
                        actuary signing the report that, to the 
                        best of the actuary's knowledge, the 
                        report is complete and accurate and 
                        that in the actuary's opinion the 
                        actuarial assumptions used are in the 
                        aggregate reasonably related to the 
                        experience of the operator and to 
                        reasonable expectations; and
                  ``(C) 90 calendar days have elapsed after the 
                report required by subparagraph (B) is filed 
                with the Secretary of Labor, and the Secretary 
                of Labor has not notified the assigned operator 
                in writing that the requirements of this 
                paragraph have not been satisfied.
          ``(4) Use of prepayment.--The Combined Fund shall--
                  ``(A) establish and maintain an account for 
                each assigned operator or related person by, or 
                on whose behalf, a payment described in 
                paragraph (3) was made,
                  ``(B) credit such account with such payment 
                (and any earnings thereon), and
                  ``(C) use all amounts in such account 
                exclusively to pay premiums that would (but for 
                this subsection) be required to be paid by the 
                assigned operator.
        Upon termination of the obligations for the premium 
        liability of any assigned operator or related person 
        for which such account is maintained, all funds 
        remaining in such account (and earnings thereon) shall 
        be refunded to such person as may be designated by the 
        common parent described in paragraph (1)(B).''.
  (b) Individual Employer Plans.--Section 9711(c) of the 
Internal Revenue Code of 1986 (relating to joint and several 
liability) is amended to read as follows:
  ``(c) Joint and Several Liability of Related Persons.--
          ``(1) In general.--Except as provided in paragraph 
        (2), each related person of a last signatory operator 
        to which subsection (a) or (b) applies shall be jointly 
        and severally liable with the last signatory operator 
        for the provision of health care coverage described in 
        subsection (a) or (b).
          ``(2) Liability limited if security provided.--If--
                  ``(A) security meeting the requirements of 
                paragraph (3) is provided by or on behalf of--
                          ``(i) any last signatory operator 
                        which is an assigned operator described 
                        in section 9704(j)(2), or
                          ``(ii) any related person to any last 
                        signatory operator described in clause 
                        (i), and
                  ``(B) the common parent of the controlled 
                group of corporations described in section 
                9704(j)(2)(B) is jointly and severally liable 
                for the provision of health care under this 
                section which, but for this paragraph, would be 
                required to be provided by the last signatory 
                operator or related person,
        then, as of the date the security is provided, such 
        common parent (and no other person) shall be liable for 
        the provision of health care under this section which 
        the last signatory operator or related person would 
        otherwise be required to provide. Security may be 
        provided under this paragraph without regard to whether 
        a payment was made under section 9704(j).
          ``(3) Security.--Security meets the requirements of 
        this paragraph if--
                  ``(A) the security--
                          ``(i) is in the form of a bond, 
                        letter of credit, or cash escrow,
                          ``(ii) is provided to the trustees of 
                        the 1992 UMWA Benefit Plan solely for 
                        the purpose of paying premiums for 
                        beneficiaries who would be described in 
                        section 9712(b)(2)(B) if the 
                        requirements of this section were not 
                        met by the last signatory operator, and
                          ``(iii) is in an amount equal to 1 
                        year of liability of the last signatory 
                        operator under this section, determined 
                        by using the average cost of such 
                        operator's liability during the prior 3 
                        calendar years;
                  ``(B) the security is in addition to any 
                other security required under any other 
                provision of this title; and
                  ``(C) the security remains in place for 5 
                years.
          ``(4) Refunds of security.--The remaining amount of 
        any security provided under this subsection (and 
        earnings thereon) shall be refunded to the last 
        signatory operator as of the earlier of--
                  ``(A) the termination of the obligations of 
                the last signatory operator under this section, 
                or
                  ``(B) the end of the 5-year period described 
                in paragraph (4)(C).''.
  (c) 1992 UMWA Benefit Plan.--Section 9712(d)(4) of the 
Internal Revenue Code of 1986 (relating to joint and several 
liability) is amended by adding at the end the following new 
sentence: ``The provisions of section 9711(c)(2) shall apply to 
any last signatory operator described in such section (without 
regard to whether security is provided under such section, a 
payment is made under section 9704(j), or both) and if security 
meeting the requirements of section 9711(c)(3) is provided, the 
common parent described in section 9711(c)(2)(B) shall be 
exclusively responsible for any liability for premiums under 
this section which, but for this sentence, would be required to 
be paid by the last signatory operator or any related 
person.''.
  (d) Successor in Interest.--Section 9701(c) of the Internal 
Revenue Code of 1986 (relating to terms relating to operators) 
is amended by adding at the end the following new paragraph:
          ``(8) Successor in interest.--
                  ``(A) Safe harbor.--The term `successor in 
                interest' shall not include any person who--
                          ``(i) is an unrelated person to an 
                        eligible seller described in 
                        subparagraph (C); and
                          ``(ii) purchases for fair market 
                        value assets, or all of the stock, of a 
                        related person to such seller, in a 
                        bona fide, arm's-length sale.
                  ``(B) Unrelated person.--The term `unrelated 
                person' means a purchaser who does not bear a 
                relationship to the eligible seller described 
                in section 267(b).
                  ``(C) Eligible seller.--For purposes of this 
                paragraph, the term `eligible seller' means an 
                assigned operator described in section 
                9704(j)(2) or a related person to such assigned 
                operator.''.
  (e) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act, 
except that the amendment made by subsection (d) shall apply to 
transactions after the date of the enactment of this Act.

SEC. 212. TRANSFERS TO FUNDS; PREMIUM RELIEF.

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

SEC. 213. OTHER PROVISIONS.

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

``SEC. 9721. CIVIL ENFORCEMENT.

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

 TITLE III--WHITE PINE COUNTY CONSERVATION, RECREATION, AND DEVELOPMENT

SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated such sums as are 
necessary to carry out this title.

SEC. 302. SHORT TITLE.

  This title may be cited as the ``White Pine County 
Conservation, Recreation, and Development Act of 2006''.

SEC. 303. DEFINITIONS.

  In this title:
          (1) County.--The term ``County'' means White Pine 
        County, Nevada.
          (2) Secretary.--The term ``Secretary'' means--
                  (A) with respect to land in the National 
                Forest System, the Secretary of Agriculture; 
                and
                  (B) with respect to other Federal land, the 
                Secretary of the Interior.
          (3) State.--The term ``State'' means the State of 
        Nevada.

                       Subtitle A--Land Disposal

SEC. 311. CONVEYANCE OF WHITE PINE COUNTY, NEVADA, LAND.

  (a) In General.--Notwithstanding sections 202 and 203 of the 
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1712, 
1713), the Secretary, in cooperation with the County, in 
accordance with that Act, this subtitle, and other applicable 
law and subject to valid existing rights, shall, at such time 
as the parcels of Federal land become available for disposal, 
conduct sales of the parcels of Federal land described in 
subsection (b) to qualified bidders.
  (b) Description of Land.--The parcels of Federal land 
referred to in subsection (a) consist of not more than 45,000 
acres of Bureau of Land Management land in the County that--
          (1) is not segregated or withdrawn on or after the 
        date of enactment of this Act, unless the land is 
        withdrawn in accordance with subsection (h); and
          (2) is identified for disposal by the Bureau of Land 
        Management through--
                  (A) the Ely Resource Management Plan; or
                  (B) a subsequent amendment to the management 
                plan that is undertaken with full public 
                involvement.
  (c) Availability.--The map and any legal descriptions of the 
Federal land conveyed under this section shall be on file and 
available for public inspection in--
          (1) the Office of the Director of the Bureau of Land 
        Management;
          (2) the Office of the Nevada State Director of the 
        Bureau of Land Management; and
          (3) the Ely Field Office of the Bureau of Land 
        Management.
  (d) Joint Selection Required.--The Secretary and the County 
shall jointly select which parcels of Federal land described in 
subsection (b) to offer for sale under subsection (a).
  (e) Compliance With Local Planning and Zoning Laws.--Before a 
sale of Federal land under subsection (a), the County shall 
submit to the Secretary a certification that qualified bidders 
have agreed to comply with--
          (1) County and city zoning ordinances; and
          (2) any master plan for the area approved by the 
        County.
  (f) Method of Sale; Consideration.--The sale of Federal land 
under subsection (a) shall be--
          (1) consistent with subsections (d) and (f) of 
        section 203 of the Federal Land Management Policy Act 
        of 1976 (43 U.S.C. 1713);
          (2) unless otherwise determined by the Secretary, 
        through a competitive bidding process; and
          (3) for not less than fair market value.
  (g) Recreation and Public Purposes Act Conveyances.--
          (1) In general.--Not later than 30 days before land 
        is offered for sale under subsection (a), the State or 
        County may elect to obtain any of the land for local 
        public purposes in accordance with the Act of June 14, 
        1926 (commonly known as the ``Recreation and Public 
        Purposes Act'') (43 U.S.C. 869 et seq.).
          (2) Retention.--Pursuant to an election made under 
        paragraph (1), the Secretary shall retain the elected 
        land for conveyance to the State or County in 
        accordance with the Act of June 14, 1926 (commonly 
        known as the ``Recreation and Public Purposes Act'') 
        (43 U.S.C. 869 et seq.).
  (h) Withdrawal.--
          (1) In general.--Subject to valid existing rights and 
        except as provided in paragraph (2), the Federal land 
        described in subsection (b) is withdrawn from--
                  (A) all forms of entry and appropriation 
                under the public land laws and mining laws;
                  (B) location and patent under the mining 
                laws; and
                  (C) operation of the mineral laws, geothermal 
                leasing laws, and mineral material laws.
          (2) Exception.--Paragraph (1)(A) shall not apply to 
        sales made consistent with this section or an election 
        by the County or the State to obtain the land described 
        in subsection (b) for public purposes under the Act of 
        June 14, 1926 (commonly known as the ``Recreation and 
        Public Purposes Act'')(43 U.S.C. 869 et seq.).
  (i) Deadline for Sale.--
          (1) In general.--Except as provided in paragraph (2), 
        not later than 1 year after the date of the signing of 
        the record of decision authorizing the implementation 
        of the Ely Resource Management Plan and annually 
        thereafter until the Federal land described in 
        subsection (b) is disposed of or the County requests a 
        postponement under paragraph (2), the Secretary shall 
        offer for sale the Federal land described in subsection 
        (b).
          (2) Postponement; exclusion from sale.--
                  (A) Request by county for postponement or 
                exclusion.--At the request of the County, the 
                Secretary shall postpone or exclude from the 
                sale all or a portion of the land described in 
                subsection (b).
                  (B) Indefinite postponement.--Unless 
                specifically requested by the County, a 
                postponement under subparagraph (A) shall not 
                be indefinite.

SEC. 312. DISPOSITION OF PROCEEDS.

  Of the proceeds from the sale of Federal land described in 
section _11(b)--
          (1) 5 percent shall be paid directly to the State for 
        use in the general education program of the State;
          (2) 10 percent shall be paid to the County for use 
        for fire protection, law enforcement, education, public 
        safety, housing, social services, transportation, and 
        planning; and
          (3) the remainder shall be deposited in a special 
        account in the Treasury of the United States, to be 
        known as the ``White Pine County Special Account'' 
        (referred to in this subtitle as the ``special 
        account''), and shall be available without further 
        appropriation to the Secretary until expended for--
                  (A) the reimbursement of costs incurred by 
                the Nevada State office and the Ely Field 
                Office of the Bureau of Land Management for 
                preparing for the sale of Federal land 
                described in section _11(b), including the 
                costs of surveys and appraisals and compliance 
                with the National Environmental Policy Act of 
                1969 (42 U.S.C. 4321) and sections 202 and 203 
                of the Federal Land Policy and Management Act 
                of 1976 (43 U.S.C. 1712, 1713);
                  (B) the inventory, evaluation, protection, 
                and management of unique archaeological 
                resources (as defined in section 3 of the 
                Archaeological Resources Protection Act of 1979 
                (16 U.S.C. 470bb)) of the County;
                  (C) the reimbursement of costs incurred by 
                the Department of the Interior for preparing 
                and carrying out the transfers of land to be 
                held in trust by the United States under 
                section _61;
                  (D) conducting a study of routes for the 
                Silver State Off-Highway Vehicle Trail as 
                required by section _55(a);
                  (E) developing and implementing the Silver 
                State Off-Highway Vehicle Trail management plan 
                described in section _55(c);
                  (F) wilderness protection and processing 
                wilderness designations, including the costs of 
                appropriate fencing, signage, public education, 
                and enforcement for the wilderness areas 
                designated;
                  (G) if the Secretary determines necessary, 
                developing and implementing conservation plans 
                for endangered or at risk species in the 
                County; and
                  (H) carrying out a study to assess non-
                motorized recreation opportunities on Federal 
                land in the County.

                      Subtitle B--Wilderness Areas

SEC. 321. SHORT TITLE.

  This subtitle may be cited as the ``Pam White Wilderness Act 
of 2006''.

SEC. 322. FINDINGS.

  Congress finds that--
          (1) public land in the County contains unique and 
        spectacular natural resources, including--
                  (A) priceless habitat for numerous species of 
                plants and wildlife; and
                  (B) thousands of acres of land that remain in 
                a natural state; and
          (2) continued preservation of those areas would 
        benefit the County and all of the United States by--
                  (A) ensuring the conservation of ecologically 
                diverse habitat;
                  (B) protecting prehistoric cultural 
                resources;
                  (C) conserving primitive recreational 
                resources; and
                  (D) protecting air and water quality.

SEC. 323. ADDITIONS TO NATIONAL WILDERNESS PRESERVATION SYSTEM.

  (a) Additions.--The following land in the State is designated 
as wilderness and as components of the National Wilderness 
Preservation System:
          (1) Mt. moriah wilderness addition.--Certain Federal 
        land managed by the Forest Service and the Bureau of 
        Land Management, comprising approximately 11,261 acres, 
        as generally depicted on the map entitled ``Eastern 
        White Pine County'' and dated November 29, 2006, is 
        incorporated in, and shall be managed as part of, the 
        Mt. Moriah Wilderness, as designated by section 2(13) 
        of the Nevada Wilderness Protection Act of 1989 (16 
        U.S.C. 1132 note; Public Law 101-195).
          (2) Mount grafton wilderness.--Certain Federal land 
        managed by the Bureau of Land Management, comprising 
        approximately 78,754 acres, as generally depicted on 
        the map entitled ``Southern White Pine County'' and 
        dated November 29, 2006, which shall be known as the 
        ``Mount Grafton Wilderness''.
          (3) South egan range wilderness.--Certain Federal 
        land managed by the Bureau of Land Management, 
        comprising approximately 67,214 acres, as generally 
        depicted on the map entitled ``Southern White Pine 
        County'' and dated November 29, 2006, which shall be 
        known as the ``South Egan Range Wilderness''.
          (4) Highland ridge wilderness.--Certain Federal land 
        managed by the Bureau of Land Management and the Forest 
        Service, comprising approximately 68,627 acres, as 
        generally depicted on the map entitled ``Southern White 
        Pine County'' and dated November 29, 2006, which shall 
        be known as the ``Highland Ridge Wilderness''.
          (5) Government peak wilderness.--Certain Federal land 
        managed by the Bureau of Land Management, comprising 
        approximately 6,313 acres, as generally depicted on the 
        map entitled ``Eastern White Pine County'' and dated 
        November 29, 2006, which shall be known as the 
        ``Government Peak Wilderness''.
          (6) Currant mountain wilderness addition.--Certain 
        Federal land managed by the Forest Service, comprising 
        approximately 10,697 acres, as generally depicted on 
        the map entitled ``Western White Pine County'' and 
        dated November 29, 2006, is incorporated in, and shall 
        be managed as part of, the ``Currant Mountain 
        Wilderness'', as designated by section 2(4) of the 
        Nevada Wilderness Protection Act of 1989 (16 U.S.C. 
        1132 note; Public Law 101-195).
          (7) Red mountain wilderness.--Certain Federal land 
        managed by the Forest Service, comprising approximately 
        20,490 acres, as generally depicted on the map entitled 
        ``Western White Pine County'' and dated November 29, 
        2006, which shall be known as the ``Red Mountain 
        Wilderness''.
          (8) Bald mountain wilderness.--Certain Federal land 
        managed by the Bureau of Land Management and the Forest 
        Service, comprising approximately 22,366 acres, as 
        generally depicted on the map entitled ``Western White 
        Pine County'' and dated November 29, 2006, which shall 
        be known as the ``Bald Mountain Wilderness''.
          (9) White pine range wilderness.--Certain Federal 
        land managed by the Forest Service, comprising 
        approximately 40,013 acres, as generally depicted on 
        the map entitled ``Western White Pine County'' and 
        dated November 29, 2006, which shall be known as the 
        ``White Pine Range Wilderness''.
          (10) Shellback wilderness.--Certain Federal land 
        managed by the Forest Service, comprising approximately 
        36,143 acres, as generally depicted on the map entitled 
        ``Western White Pine County'' and dated November 29, 
        2006, which shall be known as the ``Shellback 
        Wilderness''.
          (11) High schells wilderness.--Certain Federal land 
        managed by the Forest Service, comprising approximately 
        121,497 acres, as generally depicted on the map 
        entitled ``Eastern White Pine County'' and dated 
        November 29, 2006, which shall be known as the ``High 
        Schells Wilderness''.
          (12) Becky peak wilderness.--Certain Federal land 
        managed by the Bureau of Land Management, comprising 
        approximately 18,119 acres, as generally depicted on 
        the map entitled ``Northern White Pine County'' and 
        dated November 29, 2006, which shall be known as the 
        ``Becky Peak Wilderness''.
          (13) Goshute canyon wilderness.--Certain Federal land 
        managed by the Bureau of Land Management, comprising 
        approximately 42,544 acres, as generally depicted on 
        the map entitled ``Northern White Pine County'' and 
        dated November 29, 2006, which shall be known as the 
        ``Goshute Canyon Wilderness''.
          (14) Bristlecone wilderness.--Certain Federal land 
        managed by the Bureau of Land Management, comprising 
        approximately 14,095 acres, as generally depicted on 
        the map entitled ``Eastern White Pine County'' and 
        dated November 29, 2006, which shall be known as the 
        ``Bristlecone Wilderness''.
  (b) Boundary.--The boundary of any portion of a wilderness 
area designated by subsection (a) that is bordered by a road 
shall be at least 100 feet from the edge of the road to allow 
public access.
  (c) Map and Legal Description.--
          (1) In general.--As soon as practicable after the 
        date of enactment of this Act, the Secretary shall file 
        a map and legal description of each wilderness area 
        designated by subsection (a) with the Committee on 
        Energy and Natural Resources of the Senate and the 
        Committee on Resources of the House of Representatives.
          (2) Effect.--Each map and legal description shall 
        have the same force and effect as if included in this 
        section, except that the Secretary may correct clerical 
        and typographical errors in the map or legal 
        description.
          (3) Availability.--Each map and legal description 
        shall be on file and available for public inspection in 
        the appropriate offices of--
                  (A) the Bureau of Land Management;
                  (B) the Forest Service; and
                  (C) the National Park Service.
  (d) Withdrawal.--Subject to valid existing rights, the 
wilderness areas designated by subsection (a) are withdrawn 
from--
          (1) all forms of entry, appropriation, and disposal 
        under the public land laws;
          (2) location, entry, and patent under the mining 
        laws; and
          (3) operation of the mineral leasing and geothermal 
        leasing laws.
  (e) Mt. Moriah Wilderness Boundary Adjustment.--The boundary 
of the Mt. Moriah Wilderness established under section 2(13) of 
the Nevada Wilderness Protection Act of 1989 (16 U.S.C. 1132 
note; Public Law 101-195) is adjusted to include only the land 
identified as the ``Mount Moriah Wilderness Area'' and ``Mount 
Moriah Additions'' on the map entitled ``Eastern White Pine 
County'' and dated November 29, 2006.

SEC. 324. ADMINISTRATION.

  (a) Management.--Subject to valid existing rights, each area 
designated as wilderness by this subtitle shall be administered 
by the Secretary in accordance with the Wilderness Act (16 
U.S.C. 1131 et seq.), except that--
          (1) any reference in that Act to the effective date 
        shall be considered to be a reference to the date of 
        enactment of this Act; and
          (2) any reference in that Act to the Secretary of 
        Agriculture shall be considered to be a reference to 
        the Secretary of Agriculture or the Secretary of the 
        Interior, as appropriate.
  (b) Livestock.--Within the wilderness areas designated under 
this subtitle that are administered by the Bureau of Land 
Management and the Forest Service, the grazing of livestock in 
areas in which grazing is established as of the date of 
enactment of this Act shall be allowed to continue--
          (1) subject to such reasonable regulations, policies, 
        and practices that the Secretary considers necessary; 
        and
          (2) consistent with section 4(d)(4) of the Wilderness 
        Act (16 U.S.C. 1133(d)(4)), including the guidelines 
        set forth in Appendix A of House Report 101-405.
  (c) Incorporation of Acquired Land and Interests.--Any land 
or interest in land within the boundaries of an area designated 
as wilderness by this subtitle that is acquired by the United 
States after the date of enactment of this Act shall be added 
to and administered as part of the wilderness area within which 
the acquired land or interest is located.
  (d) Water Rights.--
          (1) Findings.--Congress finds that--
                  (A) the land designated as wilderness by this 
                subtitle is located--
                          (i) in the semiarid region of the 
                        Great Basin; and
                          (ii) at the headwaters of the streams 
                        and rivers on land with respect to 
                        which there are few if any--
                                  (I) actual or proposed water 
                                resource facilities located 
                                upstream; and
                                  (II) opportunities for 
                                diversion, storage, or other 
                                uses of water occurring outside 
                                the land that would adversely 
                                affect the wilderness values of 
                                the land;
                  (B) the land designated as wilderness by this 
                subtitle is generally not suitable for use or 
                development of new water resource facilities; 
                and
                  (C) because of the unique nature of the land 
                designated as wilderness by this subtitle, it 
                is possible to provide for proper management 
                and protection of the wilderness and other 
                values of land in ways different from those 
                used in other laws.
          (2) Purpose.--The purpose of this section is to 
        protect the wilderness values of the land designated as 
        wilderness by this subtitle by means other than a 
        federally reserved water right.
          (3) Statutory construction.--Nothing in this 
        subtitle--
                  (A) shall constitute or be construed to 
                constitute either an express or implied 
                reservation by the United States of any water 
                or water rights with respect to a wilderness 
                designated by this subtitle;
                  (B) shall affect any water rights in the 
                State (including any water rights held by the 
                United States) in existence on the date of 
                enactment of this Act;
                  (C) shall be construed as establishing a 
                precedent with regard to any future wilderness 
                designations;
                  (D) shall affect the interpretation of, or 
                any designation made pursuant to, any other 
                Act; or
                  (E) shall be construed as limiting, altering, 
                modifying, or amending any interstate compact 
                or equitable apportionment decree that 
                apportions water among and between the State 
                and other States.
          (4) Nevada water law.--The Secretary shall follow the 
        procedural and substantive requirements of State law in 
        order to obtain and hold any water rights not in 
        existence on the date of enactment of this Act with 
        respect to the wilderness areas designated by this 
        subtitle.
          (5) New projects.--
                  (A) Definition of water resource facility.--
                In this paragraph, the term ``water resource 
                facility''--
                          (i) means irrigation and pumping 
                        facilities, reservoirs, water 
                        conservation works, aqueducts, canals, 
                        ditches, pipelines, wells, hydropower 
                        projects, transmission and other 
                        ancillary facilities, and other water 
                        diversion, storage, and carriage 
                        structures; and
                          (ii) does not include wildlife 
                        guzzlers.
                  (B) Restriction on new water resource 
                facilities.--Except as otherwise provided in 
                this title, on or after the date of enactment 
                of this Act, neither the President nor any 
                other officer, employee, or agent of the United 
                States shall fund, assist, authorize, or issue 
                a license or permit for the development of any 
                new water resource facility within a wilderness 
                area that is wholly or partially within the 
                County.

SEC. 325. ADJACENT MANAGEMENT.

  (a) In General.--Congress does not intend for the designation 
of wilderness in the State by this subtitle to lead to the 
creation of protective perimeters or buffer zones around any 
such wilderness area.
  (b) Nonwilderness Activities.--The fact that nonwilderness 
activities or uses can be seen or heard from areas within a 
wilderness designated under this subtitle shall not preclude 
the conduct of those activities or uses outside the boundary of 
the wilderness area.

SEC. 326. MILITARY OVERFLIGHTS.

  Nothing in this subtitle restricts or precludes--
          (1) low-level overflights of military aircraft over 
        the areas designated as wilderness by this subtitle, 
        including military overflights that can be seen or 
        heard within the wilderness areas;
          (2) flight testing and evaluation; or
          (3) the designation or creation of new units of 
        special use airspace, or the establishment of military 
        flight training routes, over the wilderness areas.

SEC. 327. NATIVE AMERICAN CULTURAL AND RELIGIOUS USES.

  Nothing in this subtitle shall be construed to diminish--
          (1) the rights of any Indian tribe; or
          (2) tribal rights regarding access to Federal land 
        for tribal activities, including spiritual, cultural, 
        and traditional food-gathering activities.

SEC. 328. RELEASE OF WILDERNESS STUDY AREAS.

  (a) Finding.--Congress finds that, for the purposes of 
section 603 of the Federal Land Policy and Management Act of 
1976 (43 U.S.C. 1782), the Bureau of Land Management land has 
been adequately studied for wilderness designation in any 
portion of the wilderness study areas or instant study areas--
          (1) not designated as wilderness by section _23(a), 
        excluding the portion of the Goshute Canyon Wilderness 
        Study Area located outside of the County; and
          (2) depicted as released on the maps entitled--
                  (A) ``Eastern White Pine County'' and dated 
                November 29, 2006;
                  (B) ``Northern White Pine County'' and dated 
                November 29, 2006;
                  (C) ``Southern White Pine County'' and dated 
                November 29, 2006; and
                  (D) ``Western White Pine County'' and dated 
                November 29, 2006.
  (b) Release.--
          (1) In general.--Any public land described in 
        subsection (a) that is not designated as wilderness by 
        this subtitle--
                  (A) is no longer subject to section 603(c) of 
                the Federal Land Policy and Management Act of 
                1976 (43 U.S.C. 1782(c));
                  (B) shall be managed in accordance with--
                          (i) land management plans adopted 
                        under section 202 of that Act (43 
                        U.S.C. 1712); and
                          (ii) cooperative conservation 
                        agreements in existence on the date of 
                        enactment of this Act; and
                  (C) shall be subject to the Endangered 
                Species Act of 1973 (16 U.S.C. 1531 et seq.).
          (2) Exception.--The requirements described in 
        paragraph (1) shall not apply to the portion of the 
        Goshute Canyon Wilderness Study Area located outside of 
        the County.

SEC. 329. WILDLIFE MANAGEMENT.

  (a) In General.--In accordance with section 4(d)(7) of the 
Wilderness Act (16 U.S.C. 1133(d)(7)), nothing in this subtitle 
affects the jurisdiction of the State with respect to fish and 
wildlife management, including the regulation of hunting, 
fishing, and trapping, in the wilderness areas designated by 
this subtitle.
  (b) Management Activities.--In furtherance of the purposes 
and principles of the Wilderness Act (16 U.S.C. 1131 et seq.), 
the Secretary may conduct such management activities as are 
necessary to maintain or restore fish and wildlife populations 
and habitats in the wilderness areas designated by this 
subtitle if those activities are conducted--
          (1) consistent with relevant wilderness management 
        plans; and
          (2) in accordance with--
                  (A) the Wilderness Act (16 U.S.C. 1131 et 
                seq.); and
                  (B) appropriate policies such as those set 
                forth in Appendix B of House Report 101-405, 
                including the occasional and temporary use of 
                motorized vehicles if the use, as determined by 
                the Secretary, would promote healthy, viable, 
                and more naturally distributed wildlife 
                populations that would enhance wilderness 
                values and accomplish those tasks with the 
                minimal impact necessary to reasonably 
                accomplish those tasks.
  (c) Existing Activities.--Consistent with section 4(d)(1) of 
the Wilderness Act (16 U.S.C. 1133(d)(1)) and in accordance 
with appropriate policies such as those set forth in Appendix B 
of House Report 101-405, the State may continue to use 
aircraft, including helicopters, to survey, capture, 
transplant, monitor, and provide water for wildlife 
populations, including bighorn sheep, and feral stock, feral 
horses, and feral burros.
  (d) Wildlife Water Development Projects.--Subject to 
subsection (f), the Secretary shall authorize structures and 
facilities, including existing structures and facilities, for 
wildlife water development projects, including guzzlers, in the 
wilderness areas designated by this subtitle if--
          (1) the structures and facilities will, as determined 
        by the Secretary, enhance wilderness values by 
        promoting healthy, viable, and more naturally 
        distributed wildlife populations; and
          (2) the visual impacts of the structures and 
        facilities on the wilderness areas can reasonably be 
        minimized.
  (e) Hunting, Fishing, and Trapping.--
          (1) In general.--The Secretary may designate by 
        regulation areas in which, and establish periods during 
        which, for reasons of public safety, administration, or 
        compliance with applicable laws, no hunting, fishing, 
        or trapping will be permitted in the wilderness areas 
        designated by this subtitle.
          (2) Consultation.--Except in emergencies, the 
        Secretary shall consult with the appropriate State 
        agency before promulgating regulations under paragraph 
        (1).
  (f) Cooperative Agreement.--
          (1) In general.--The State (including a designee of 
        the State) may conduct wildlife management activities 
        in the wilderness areas designated by this subtitle--
                  (A) in accordance with the terms and 
                conditions specified in the cooperative 
                agreement between the Secretary and the State, 
                entitled ``Memorandum of Understanding between 
                the Bureau of Land Management and the Nevada 
                Department of Wildlife Supplement No. 9,'' and 
                signed November and December 2003, including 
                any amendments to the cooperative agreement 
                agreed to by the Secretary and the State; and
                  (B) subject to all applicable laws and 
                regulations.
          (2) References.--
                  (A) Clark county.--For purposes of this 
                subsection, any references to Clark County in 
                the cooperative agreement described in 
                paragraph (1)(A) shall be considered to be 
                references to White Pine County, Nevada.
                  (B) Bureau of land management.--For purposes 
                of this subsection, any references to the 
                Bureau of Land Management in the cooperative 
                agreement described in paragraph (1)(A) shall 
                also be considered to be references to the 
                Forest Service.

SEC. 330. WILDFIRE, INSECT, AND DISEASE MANAGEMENT.

  Consistent with section 4(d)(1) of the Wilderness Act (16 
U.S.C. 1133(d)(1)), the Secretary may take such measures as may 
be necessary in the control of fire, insects, and diseases, 
including coordination with a State or local agency, as the 
Secretary deems appropriate.

SEC. 331. CLIMATOLOGICAL DATA COLLECTION.

  If the Secretary determines that hydrologic, meteorologic, or 
climatological collection devices are appropriate to further 
the scientific, educational, and conservation purposes of the 
wilderness areas designated by this subtitle, nothing in this 
subtitle precludes the installation and maintenance of the 
collection devices within the wilderness areas.

          Subtitle C--Transfers of Administrative Jurisdiction

SEC. 341. TRANSFER TO THE UNITED STATES FISH AND WILDLIFE SERVICE.

  (a) In General.--Administrative jurisdiction over the land 
described in subsection (b) is transferred from the Bureau of 
Land Management to the United States Fish and Wildlife Service 
for inclusion in the Ruby Lake National Wildlife Refuge.
  (b) Description of Land.--The parcel of land referred to in 
subsection (a) is approximately 645 acres of land administered 
by the Bureau of Land Management and identified on the map 
entitled ``Ruby Lake Land Transfer'' and dated July 10, 2006, 
as ``Lands to be transferred to the Fish and Wildlife 
Service''.

SEC. 342. TRANSFER TO THE BUREAU OF LAND MANAGEMENT.

  (a) In General.--Subject to subsection (c), administrative 
jurisdiction over the parcels of land described in subsection 
(b) is transferred from the Forest Service to the Bureau of 
Land Management.
  (b) Description of Land.--The parcels of land referred to in 
subsection (a) are--
          (1) the land administered by the Forest Service and 
        identified on the map entitled ``Southern White Pine 
        County'' and dated November 29, 2006, as ``Withdrawal 
        Area'';
          (2) the land administered by the Forest Service and 
        identified on the map entitled ``Southern White Pine 
        County'' and dated November 29, 2006, as ``Highland 
        Ridge Wilderness''; and
          (3) all other Federal land administered by the Forest 
        Service that is located adjacent to the Highland Ridge 
        Wilderness.
  (c) Continuation of Cooperative Agreements.--Any existing 
Forest Service cooperative agreement or permit in effect on the 
date of enactment of this Act relating to a parcel of land to 
which administrative jurisdiction is transferred by subsection 
(a) shall be continued by the Bureau of Land Management unless 
there is reasonable cause to terminate the agreement or permit, 
as determined by the Secretary.
  (d) Withdrawal.--Subject to valid existing rights, all 
Federal land within the Withdrawal Area is withdrawn from all 
forms of--
          (1) entry, appropriation, or disposal under the 
        public land laws;
          (2) location, entry, and patent under the mining 
        laws; and
          (3) operation of the mineral laws, geothermal leasing 
        laws, and mineral materials laws.
  (e) Motorized and Mechanical Vehicles.--Use of motorized and 
mechanical vehicles in the withdrawal area designated by this 
subtitle shall be permitted only on roads and trails designated 
for their use, unless the use of those vehicles is needed--
          (1) for administrative purposes; or
          (2) to respond to an emergency.

SEC. 343. TRANSFER TO THE FOREST SERVICE.

  (a) In General.--Subject to subsection (c), administrative 
jurisdiction over the parcels of land described in subsection 
(b) is transferred from the Bureau of Land Management to the 
Forest Service.
  (b) Description of Land.--The parcels of land referred to in 
subsection (a) are the approximately 5,799 acres of land 
administered by the Bureau of Land Management and identified on 
the map entitled ``Western White Pine County'', dated November 
29, 2006, as the BLM Public Land Transfer to the US Forest 
Service.
  (c) Continuation of Cooperative Agreements.--Any existing 
Bureau of Land Management cooperative agreement or permit in 
effect on the date of enactment of this Act relating to a 
parcel of land to which administrative jurisdiction is 
transferred by subsection (a) shall be continued by the Forest 
Service unless there is reasonable cause to terminate the 
agreement or permit, as determined by the Secretary.

SEC. 344. AVAILABILITY OF MAP AND LEGAL DESCRIPTIONS.

  The maps of the land transferred by this subtitle shall be on 
file and available for public inspection in the appropriate 
offices of--
          (1) the Bureau of Land Management;
          (2) the Forest Service;
          (3) the National Park Service; and
          (4) the United States Fish and Wildlife Service.

                     Subtitle D--Public Conveyances

SEC. 351. CONVEYANCE TO THE STATE OF NEVADA.

  (a) Conveyance.--Notwithstanding section 202 of the Federal 
Land Policy and Management Act of 1976 (43 U.S.C. 1712), the 
Secretary shall convey to the State, subject to valid existing 
rights, for no consideration, all right, title, and interest of 
the United States in and to the parcels of land described in 
subsection (b) if the State and the County enter into a written 
agreement supporting the conveyance.
  (b) Description of Land.--The parcels of land referred to in 
subsection (a) are--
          (1) the approximately 6,281 acres of Bureau of Land 
        Management land identified as ``Steptoe Valley Wildlife 
        Management Area Expansion Proposal'' on the map 
        entitled ``Ely, Nevada Area'' and dated November 29, 
        2006;
          (2) the approximately 658 acres of Bureau of Land 
        Management land identified as ``Ward Charcoal Ovens 
        Expansion'' on the map entitled ``Ely, Nevada Area'' 
        and dated November 29, 2006; and
          (3) the approximately 2,960 acres of Forest Service 
        identified as ``Cave Lake State Park Expansion'' on the 
        map entitled ``Ely, Nevada Area'' and dated November 
        29, 2006.
  (c) Costs.--Any costs relating to a conveyance under 
subsection (a), including costs for surveys and other 
administrative costs, shall be paid by the State.
  (d) Use of Land.--
          (1) In general.--Any parcel of land conveyed to the 
        State under subsection (a) shall be used only for--
                  (A) the conservation of wildlife or natural 
                resources; or
                  (B) a public park.
          (2) Facilities.--Any facility on a parcel of land 
        conveyed under subsection (a) shall be constructed and 
        managed in a manner consistent with the uses described 
        in paragraph (1).
  (e) Reversion.--If a parcel of land conveyed under subsection 
(a) is used in a manner that is inconsistent with the uses 
described in subsection (d), the parcel of land shall, at the 
discretion of the Secretary, revert to the United States.

SEC. 352. CONVEYANCE TO WHITE PINE COUNTY, NEVADA.

  (a) In General.--Notwithstanding section 202 of the Federal 
Land Policy and Management Act of 1976 (43 U.S.C. 1712), the 
Secretary shall convey to the County, without consideration, 
all right, title, and interest of the United States in and to 
the parcels of land described in subsection (b).
  (b) Description of Land.--The parcels of land referred to in 
subsection (a) are--
          (1) the approximately 1,551 acres of land identified 
        on the map entitled ``Ely, Nevada Area'', dated 
        November 29, 2006, as the Airport Expansion; and
          (2) the approximately 202 acres of land identified on 
        the map entitled ``Ely, Nevada Area'', dated November 
        29, 2006, as the Industrial Park Expansion.
  (c) Authorized Uses.--
          (1) Airport expansion.--The parcel of land described 
        in subsection (b)(1) shall be used by the County to 
        expand the Ely Airport.
          (2) Industrial park expansion.--The parcel of land 
        described in subsection (b)(2) shall be used by the 
        County to expand the White Pine County Industrial Park.
          (3) Use of certain land for nonresidential 
        development.--
                  (A) In general.--After conveyance to the 
                County of the land described in subsection (b), 
                the County may sell, lease, or otherwise convey 
                any portion of the land conveyed for purposes 
                of nonresidential development relating to the 
                authorized uses described in paragraphs (1) and 
                (2).
                  (B) Method of sale.--The sale, lease, or 
                conveyance of land under subparagraph (A) shall 
                be--
                          (i) through a competitive bidding 
                        process; and
                          (ii) for not less than fair market 
                        value.
                  (C) Disposition of proceeds.--The gross 
                proceeds from the sale, lease, or conveyance of 
                land under subparagraph (A) shall be 
                distributed in accordance with section _12.
  (d) Reversion.--If a parcel of land conveyed under subsection 
(a) is used in a manner that is inconsistent with the use 
described for the parcel in paragraph (1), (2), or (3) of 
subsection (c), the parcel of land shall, at the discretion of 
the Secretary, revert to the United States.

           Subtitle E--Silver State Off-Highway Vehicle Trail

SEC. 355. SILVER STATE OFF-HIGHWAY VEHICLE TRAIL.

  (a) Study.--
          (1) In general.--Not later than 3 years after the 
        date of enactment of this Act, the Secretary shall 
        complete a study of routes (with emphasis on roads and 
        trails in existence on the date of enactment of this 
        Act) in accordance with the National Environmental 
        Policy Act of 1969 (42 U.S.C. 4321 et seq.) for the 
        Silver State Off-Highway Vehicle Trail (referred to in 
        this section as the ``Trail'').
          (2) Preferred route.--Based on the study conducted 
        under paragraph (1), the Secretary, in consultation 
        with the State, the County, and any interested persons, 
        shall identify the preferred route for the Trail.
  (b) Designation of Trail.--
          (1) In general.--Subject to paragraph (2), not later 
        than 90 days after the date on which the study is 
        completed under subsection (a), the Secretary shall 
        designate the Trail.
          (2) Limitations.--The Secretary shall designate the 
        Trail only if the Secretary--
                  (A) determines that the route of the Trail 
                would not have significant negative impacts on 
                wildlife, natural or cultural resources, or 
                traditional uses; and
                  (B) ensures that the Trail designation--
                          (i) is an effort to extend the Silver 
                        State Off-Highway Vehicle Trail 
                        designated under section 401(b) of the 
                        Lincoln County Conservation, 
                        Recreation, and Development Act of 2004 
                        (16 U.S.C. 1244 note; Public Law 108-
                        424); and
                          (ii) is limited to--
                                  (I) 1 route that generally 
                                runs in a north-south 
                                direction; and
                                  (II) 1 potential spur running 
                                west.
  (c) Management.--
          (1) In general.--The Secretary shall manage the Trail 
        in a manner that--
                  (A) is consistent with any motorized and 
                mechanized uses of the Trail that are 
                authorized on the date of enactment of this Act 
                under applicable Federal and State laws 
                (including regulations);
                  (B) ensures the safety of the individuals who 
                use the Trail; and
                  (C) does not damage sensitive wildlife 
                habitat, natural, or cultural resources.
          (2) Management plan.--
                  (A) In general.--Not later than 2 years after 
                the date of designation of the Trail, the 
                Secretary, in consultation with the State, the 
                County, and any other interested persons, shall 
                complete a management plan for the Trail.
                  (B) Components.--The management plan shall--
                          (i) describe the appropriate uses and 
                        management of the Trail;
                          (ii) authorize the use of motorized 
                        and mechanized vehicles on the Trail; 
                        and
                          (iii) describe actions carried out to 
                        periodically evaluate and manage the 
                        appropriate levels of use and location 
                        of the Trail to minimize environmental 
                        impacts and prevent damage to cultural 
                        resources from the use of the Trail.
          (3) Monitoring and evaluation.--
                  (A) Annual assessment.--The Secretary shall 
                annually assess--
                          (i) the effects of the use of off-
                        highway vehicles on the Trail to 
                        minimize environmental impacts and 
                        prevent damage to cultural resources 
                        from the use of the Trail; and
                          (ii) in consultation with the Nevada 
                        Department of Wildlife, the effects of 
                        the Trail on wildlife and wildlife 
                        habitat to minimize environmental 
                        impacts from the use of the Trail.
                  (B) Closure.--The Secretary, in consultation 
                with the State and the County and subject to 
                subparagraph (C), may temporarily close or 
                permanently reroute a portion of the Trail if 
                the Secretary determines that--
                          (i) the Trail is having an adverse 
                        impact on--
                                  (I) wildlife habitats;
                                  (II) natural resources;
                                  (III) cultural resources; or
                                  (IV) traditional uses;
                          (ii) the Trail threatens public 
                        safety;
                          (iii) closure of the Trail is 
                        necessary to repair damage to the 
                        Trail; or
                          (iv) closure of the Trail is 
                        necessary to repair resource damage.
                  (C) Rerouting.--Any portion of the Trail that 
                is temporarily closed may be permanently 
                rerouted along existing roads and trails on 
                public land open to motorized use if the 
                Secretary determines that rerouting the portion 
                of the Trail would not significantly increase 
                or decrease the length of the Trail.
                  (D) Notice.--The Secretary shall provide 
                information to the public with respect to any 
                routes on the Trail that are closed under 
                subparagraph (B), including through the 
                provision of appropriate signage along the 
                Trail.
          (4) Notice of open routes.--The Secretary shall 
        ensure that visitors to the Trail have access to 
        adequate notice relating to the routes on the Trail 
        that are open through--
                  (A) the provision of appropriate signage 
                along the Trail; and
                  (B) the distribution of maps, safety 
                education materials, and any other information 
                that the Secretary determines to be 
                appropriate.
  (d) No Effect on Non-Federal Land and Interests in Land.--
Nothing in this section affects the ownership or management of, 
or other rights relating to, non-Federal land or interests in 
non-Federal land.

 Subtitle F--Transfer of Land to Be Held in Trust for the Ely Shoshone 
                                 Tribe.

SEC. 361. TRANSFER OF LAND TO BE HELD IN TRUST FOR THE ELY SHOSHONE 
                    TRIBE.

  (a) In General.--Subject to valid existing rights, all right, 
title, and interest of the United States in and to the land 
described in subsection (b)--
          (1) shall be held in trust by the United States for 
        the benefit of the Ely Shoshone Tribe (referred to in 
        this section as the ``Tribe''); and
          (2) shall be part of the reservation of the Tribe.
  (b) Description of Land.--The land referred to in subsection 
(a) consists of parcels 1, 2, 3, and 4, totaling the 
approximately 3,526 acres of land that are identified on--
          (1) the Ely, Nevada Area map dated November 29, 2006; 
        and
          (2) the Eastern White Pine County map dated November 
        29, 2006, as the ``Ely Shoshone Expansion''.
  (c) Survey.--Not later than 180 days after the date of 
enactment of this Act, the Bureau of Land Management shall 
complete a survey of the boundary lines to establish the 
boundaries of the trust land.
  (d) Conditions.--
          (1) Gaming.--Land taken into trust under subsection 
        (a) shall not be--
                  (A) considered to have been taken into trust 
                for gaming (as that term is used in the Indian 
                Gaming Regulatory Act (25 U.S.C. 2701 et 
                seq.)); and
                  (B) used for gaming.
          (2) Trust land for ceremonial use.--With respect to 
        the use of the land identified on the map as ``Ely 
        Shoshone Expansion'' and marked as ``3'', the Tribe--
                  (A) shall limit the use of the surface of the 
                land to traditional and customary uses and 
                stewardship conservation for the benefit of the 
                Tribe; and
                  (B) shall not permit any permanent 
                residential or recreational development on, or 
                commercial use of, the surface of the land, 
                including commercial development or gaming.
          (3) Thinning; landscape restoration.--With respect to 
        land taken into trust under subsection (a), the Forest 
        Service and the Bureau of Land Management may, in 
        consultation and coordination with the Tribe, carry out 
        any thinning and other landscape restoration work on 
        the trust land that is beneficial to the Tribe and the 
        Forest Service or the Bureau of Land Management.

       Subtitle G--Eastern Nevada Landscape Restoration Project.

SEC. 371. FINDINGS; PURPOSES.

  (a) Findings.--Congress finds that--
          (1) there is an increasing threat of wildfire in the 
        Great Basin;
          (2) those wildfires--
                  (A) endanger homes and communities;
                  (B) damage or destroy watersheds and soils; 
                and
                  (C) pose a serious threat to the habitat of 
                threatened and endangered species;
          (3) forest land and rangeland in the Great Basin are 
        degraded as a direct consequence of land management 
        practices (including practices to control and prevent 
        wildfires) that disrupt the occurrence of frequent low-
        intensity fires that have periodically removed 
        flammable undergrowth; and
          (4) additional scientific information is needed in 
        the Great Basin for--
                  (A) the design, implementation, and 
                adaptation of landscape-scale restoration 
                treatments; and
                  (B) the improvement of wildfire management 
                technology and practices.
  (b) Purposes.--The purposes of this subtitle are to--
          (1) support the Great Basin Restoration Initiative 
        through the implementation of the Eastern Nevada 
        Landscape Restoration Project; and
          (2) ensure resilient and healthy ecosystems in the 
        Great Basin by restoring native plant communities and 
        natural mosaics on the landscape that function within 
        the parameters of natural fire regimes.

SEC. 372. DEFINITIONS.

  In this subtitle:
          (1) Initiative.--The term ``Initiative'' means the 
        Great Basin Restoration Initiative.
          (2) Project.--The term ``Project'' means the Eastern 
        Nevada Landscape Restoration Project authorized under 
        section _73(a).
          (3) Secretaries.--The term ``Secretaries'' means the 
        Secretary of Agriculture and the Secretary of the 
        Interior.
          (4) State.--The term ``State'' means the State of 
        Nevada.

SEC. 373. RESTORATION PROJECT.

  (a) In General.--In accordance with all applicable Federal 
laws, the Secretaries shall carry out the Eastern Nevada 
Landscape Restoration Project to--
          (1) implement the Initiative; and
          (2) restore native rangelands and native woodland 
        (including riparian and aspen communities) in White 
        Pine and Lincoln Counties in the State.
  (b) Grants; Cooperative Agreement.--In carrying out the 
Project--
          (1) the Secretaries may make grants to the Eastern 
        Nevada Landscape Coalition, the Great Basin Institute, 
        and other entities for the study and restoration of 
        rangeland and other land in the Great Basin--
                  (A) to assist in--
                          (i) reducing hazardous fuels; and
                          (ii) restoring native rangeland and 
                        woodland; and
                  (B) for other related purposes; and
          (2) notwithstanding sections 6301 through 6308, of 
        title 31, United States Code, the Director of the 
        Bureau of Land Management and the Chief of the Forest 
        Service may enter into an agreement with the Eastern 
        Nevada Landscape Coalition, the Great Basin Institute, 
        and other entities to provide for the conduct of 
        scientific analyses, hazardous fuels and mechanical 
        treatments, and related work.
  (c) Research Facility.--The Secretaries may conduct a 
feasibility study on the potential establishment of an 
interagency science center, including a research facility and 
experimental rangeland in the eastern portion of the State.
  (d) Funding.--Section 4(e)(3)(A) of the Southern Nevada 
Public Land Management Act of 1998 (Public Law 105-263; 112 
Stat. 2346; 116 Stat. 2007; 118 Stat. 2414) is amended--
          (1) by redesignating clause (viii) as clause (ix); 
        and
          (2) by inserting after clause (vii) the following:
                          ``(viii) to carry out the Eastern 
                        Nevada Landscape Restoration Project in 
                        White Pine County, Nevada and Lincoln 
                        County, Nevada; and''.

 Subtitle H--Amendments to the Southern Nevada Public Land Management 
                              Act of 1998

SEC. 381. FINDINGS.

  Section 2(a)(3) of the Southern Nevada Public Land Management 
Act of 1998 (Public Law 105-263; 112 Stat. 2343) is amended by 
inserting ``the Sloan Canyon National Conservation Area,'' 
before ``and the Spring Mountains''.

SEC. 382. AVAILABILITY OF SPECIAL ACCOUNT.

  Section 4(e) of the Southern Nevada Public Land Management 
Act of 1998 (Public Law 105-263; 112 Stat. 2346; 116 Stat. 
2007; 117 Stat. 1317; 118 Stat. 2414) is amended--
          (1) in paragraph (3)--
                  (A) in subparagraph (A)--
                          (i) by striking ``may be expended'' 
                        and inserting ``shall be expended'';
                          (ii) in clause (ii)--
                                  (I) by inserting ``, the 
                                Great Basin National Park,'' 
                                after ``the Red Rock Canyon 
                                National Conservation Area'';
                                  (II) by inserting ``and the 
                                Forest Service'' after ``the 
                                Bureau of Land Management''; 
                                and
                                  (III) by striking ``Clark and 
                                Lincoln Counties'' and 
                                inserting ``Clark, Lincoln, and 
                                White Pine Counties'';
                          (iii) in clause (iii), by inserting 
                        ``and implementation'' before ``of a 
                        multispecies habitat'';
                          (iv) in clause (iv), by striking 
                        ``Clark and Lincoln Counties,'' and 
                        inserting ``Clark, Lincoln, and White 
                        Pine Counties and Washoe County 
                        (subject to paragraph (4)),'';
                          (v) in clause (v), by striking 
                        ``Clark and Lincoln Counties'' and 
                        inserting ``Clark, Lincoln, and White 
                        Pine Counties'';
                          (vi) in clause (vii)--
                                  (I) by striking ``for 
                                development'' and inserting 
                                ``development''; and
                                  (II) by striking ``and'' at 
                                the end;
                          (vii) by redesignating clauses (viii) 
                        and (ix) (as amended by section _73(d)) 
                        as clauses (x) and (xi), respectively; 
                        and
                          (viii) by inserting after clause 
                        (vii) the following:
                          ``(viii) reimbursement of any costs 
                        incurred by the Bureau of Land 
                        Management to clear debris from and 
                        protect land that is--
                                  ``(I) located in the disposal 
                                boundary described in 
                                subsection (a); and
                                  ``(II) reserved for 
                                affordable housing;
                          ``(ix) development and implementation 
                        of comprehensive, cost-effective, 
                        multijurisdictional hazardous fuels 
                        reduction and wildfire prevention plans 
                        (including sustainable biomass and 
                        biofuels energy development and 
                        production activities) for the Lake 
                        Tahoe Basin (to be developed in 
                        conjunction with the Tahoe Regional 
                        Planning Agency), the Carson Range in 
                        Douglas and Washoe Counties and Carson 
                        City in the State, and the Spring 
                        Mountains in the State, that are--
                                  ``(I) subject to approval by 
                                the Secretary; and
                                  ``(II) not more than 10 years 
                                in duration;''; and
                  (B) by inserting after subparagraph (C) the 
                following:
                  ``(D) Transfer requirement.--Subject to such 
                terms and conditions as the Secretary may 
                prescribe, and notwithstanding any other 
                provision of law--
                          ``(i) for amounts that have been 
                        authorized for expenditure under 
                        subparagraph (A)(iv) but not 
                        transferred as of the date of enactment 
                        of this subparagraph, the Secretary 
                        shall, not later than 60 days after a 
                        request for funds from the applicable 
                        unit of local government or regional 
                        governmental entity, transfer to the 
                        applicable unit of local government or 
                        regional governmental entity the amount 
                        authorized for the expenditure; and
                          ``(ii) for expenditures authorized 
                        under subparagraph (A)(iv) that are 
                        approved by the Secretary, the 
                        Secretary shall, not later than 60 days 
                        after a request for funds from the 
                        applicable unit of local government or 
                        regional governmental entity, transfer 
                        to the applicable unit of local 
                        government or regional governmental 
                        entity the amount approved for 
                        expenditure.''; and
          (2) by adding at the end the following:
          ``(4) Limitation for washoe county.--Until December 
        31, 2011, Washoe County shall be eligible to nominate 
        for expenditure amounts to acquire land (not to exceed 
        250 acres) and develop 1 regional park and natural 
        area.''.

Subtitle I--Amendments to the Lincoln County Conservation, Recreation, 
                      and Development Act of 2004

SEC. 391. DISPOSITION OF PROCEEDS.

  Section 103(b)(2) of the Lincoln County Conservation, 
Recreation, and Development Act of 2004 (Public Law 108-424; 
118 Stat. 2405) is amended by inserting ``education, 
planning,'' after ``social services,''.

                Subtitle J--All American Canal Projects

SEC. 395. ALL AMERICAN CANAL LINING PROJECT.

  (a) Duties of the Secretary.--Notwithstanding any other 
provision of law, upon the date of enactment of this Act, the 
Secretary shall, without delay, carry out the All American 
Canal Lining Project identified--
          (1) as the preferred alternative in the record of 
        decision for that project, dated July 29, 1994; and
          (2) in the allocation agreement allocating water from 
        the All American Canal Lining Project, entered into as 
        of October 10, 2003.
  (b) Duties of Commissioner of Reclamation.--
          (1) In general.--Subject to paragraph (2), if a State 
        conducts a review or study of the implications of the 
        All American Canal Lining Project as carried out under 
        subsection (a), upon request from the Governor of the 
        State, the Commissioner of Reclamation shall cooperate 
        with the State, to the extent practicable, in carrying 
        out the review or study.
          (2) Restriction of delay.--A review or study 
        conducted by a State under paragraph (1) shall not 
        delay the carrying out by the Secretary of the All 
        American Canal Lining Project.

SEC. 396. REGULATED STORAGE WATER FACILITY.

  (a) Construction, Operation, and Maintenance of Facility.--
Notwithstanding any other provision of law, upon the date of 
enactment of this Act, the Secretary shall, without delay, 
pursuant to the Act of January 1, 1927 (44 Stat. 1010, chapter 
47) (commonly known as the ``River and Harbor Act of 1927''), 
as amended, design and provide for the construction, operation, 
and maintenance of a regulated water storage facility 
(including all incidental works that are reasonably necessary 
to operate the storage facility) to provide additional storage 
capacity to reduce nonstorable flows on the Colorado River 
below Parker Dam.
  (b) Location of Facility.--The storage facility (including 
all incidental works) described in subsection (a) shall be 
located at or near the All American Canal.

SEC. 397. APPLICATION OF LAW.

  The Treaty between the United States of America and Mexico 
relating to the utilization of waters of the Colorado and 
Tijuana Rivers and of the Rio Grande, and supplementary 
protocol signed November 14, 1944, signed at Washington 
February 3, 1944 (59 Stat. 1219) is the exclusive authority for 
identifying, considering, analyzing, or addressing impacts 
occurring outside the boundary of the United States of works 
constructed, acquired, or used within the territorial limits of 
the United States.

                       TITLE IV--OTHER PROVISIONS

SEC. 401. TOBACCO PERSONAL USE QUANTITY EXCEPTION TO NOT APPLY TO 
                    DELIVERY SALES.

  (a) Definitions.--Section 801 of the Tariff Act of 1930 (19 
U.S.C. 1681) is amended by adding at the end the following:
          ``(3) Delivery sale.--The term `delivery sale' means 
        any sale of cigarettes or a smokeless tobacco product 
        to a consumer if--
                  ``(A) the consumer submits the order for such 
                sale by means of a telephone or other method of 
                voice transmission, the mail, or the Internet 
                or other online service, or the seller is 
                otherwise not in the physical presence of the 
                buyer when the request for purchase or order is 
                made; or
                  ``(B) the cigarettes or smokeless tobacco 
                product is delivered by use of a common 
                carrier, private delivery service, or the mail, 
                or the seller is not in the physical presence 
                of the buyer when the buyer obtains personal 
                possession of the delivered cigarettes or 
                smokeless tobacco product.''.
  (b) Inapplicability of Exemptions From Requirements for Entry 
of Certain Cigarettes and Smokeless Tobacco Products.--Section 
802(b)(1) of the Tariff Act of 1930 (19 U.S.C. 1681a(b)(1)) is 
amended by adding at the end the following new sentence: ``The 
preceding sentence shall not apply to any cigarettes or 
smokeless tobacco products sold in connection with a delivery 
sale.''.
  (c) State Access to Customs Certifications.--Section 802 of 
the Tariff Act of 1930 (19 U.S.C. 1681a) is amended by adding 
at the end the following new subsection:
  ``(d) State Access to Customs Certifications.--A State, 
through its Attorney General, shall be entitled to obtain 
copies of any certification required under subsection (c) 
directly--
          ``(1) upon request to the agency of the United States 
        responsible for collecting such certification; or
          ``(2) upon request to the importer, manufacturer, or 
        authorized official of such importer or 
        manufacturer.''.
  (d) Enforcement Provisions.--Section 803(b) of the Tariff Act 
of 1930 (19 U.S.C. 1681b(b)) is amended--
          (1) in the first sentence, by inserting before the 
        period at the end the following: ``, or to any State in 
        which such tobacco product, cigarette papers, or tube 
        is found''; and
          (2) in the second sentence, by inserting ``, or to 
        any State,'' after ``the United States''.
  (e) Inclusion of Smokeless Tobacco.--
          (1) Sections 802 and 803(a) of the Tariff Act of 1930 
        (19 U.S.C. 1681a and 1681b(a)) (other than the last 
        sentence of section 802(b)(1), as added by subsection 
        (b) of this section) are further amended by inserting 
        ``or smokeless tobacco products'' after ``cigarettes'' 
        each place it appears.
          (2) Section 802 of such Act is further amended--
                  (A) in subsection (a)--
                          (i) in paragraph (1), by inserting 
                        ``or section 4 of the Comprehensive 
                        Smokeless Tobacco Health Education Act 
                        of 1986 (15 U.S.C. 4403), as the case 
                        may be'' after ``section 7 of the 
                        Federal Cigarette Labeling and 
                        Advertising Act (15 U.S.C. 1335a)'';
                          (ii) in paragraph (2), by inserting 
                        ``or section 3 of the Comprehensive 
                        Smokeless Tobacco Health Education Act 
                        of 1986 (15 U.S.C. 4402), as the case 
                        may be,'' after ``section 4 of the 
                        Federal Cigarette Labeling and 
                        Advertising Act (15 U.S.C. 1333)''; and
                          (iii) in paragraph (3), by inserting 
                        ``or section 3(d) of the Comprehensive 
                        Smokeless Tobacco Health Education Act 
                        of 1986 (15 U.S.C. 4402(d)), as the 
                        case may be'' after ``section 4(c) of 
                        the Federal Cigarette Labeling and 
                        Advertising Act (15 U.S.C. 1333(c))'';
                  (B) in subsection (b)--
                          (i) in the heading of paragraph (1), 
                        by inserting ``or smokeless tobacco 
                        products'' after ``cigarettes''; and
                          (ii) in the heading of paragraphs (2) 
                        and (3), by inserting ``or smokeless 
                        tobacco products'' after 
                        ``cigarettes''; and
                  (C) in subsection (c)--
                          (i) in the heading, by inserting ``or 
                        smokeless tobacco product'' after 
                        ``cigarette'';
                          (ii) in paragraph (1), by inserting 
                        ``or section 4 of the Comprehensive 
                        Smokeless Tobacco Health Education Act 
                        of 1986 (15 U.S.C. 4403), as the case 
                        may be'' after ``section 7 of the 
                        Federal Cigarette Labeling and 
                        Advertising Act (15 U.S.C. 1335a)'';
                          (iii) in paragraph (2)(A), by 
                        inserting ``or section 3 of the 
                        Comprehensive Smokeless Tobacco Health 
                        Education Act of 1986 (15 U.S.C. 4402), 
                        as the case may be,'' after ``section 4 
                        of the Federal Cigarette Labeling and 
                        Advertising Act (15 U.S.C. 1333)''; and
                          (iv) in paragraph (2)(B), by 
                        inserting ``or section 3(d) of the 
                        Comprehensive Smokeless Tobacco Health 
                        Education Act of 1986 (15 U.S.C. 
                        4402(d)), as the case may be'' after 
                        ``section 4(c) of the Federal Cigarette 
                        Labeling and Advertising Act (15 U.S.C. 
                        1333(c))''.
          (3) Section 803(b) of such Act, as amended by 
        subsection (d)(1) of this section, is further amended 
        by inserting ``, or any smokeless tobacco product,'' 
        after ``or tube'' the first place it appears.
          (4)(A) The heading of title VIII of such Act is 
        amended by inserting ``AND SMOKELESS TOBACCO PRODUCTS'' 
        after ``CIGARETTES''.
          (B) The heading of section 802 of such Act is amended 
        by inserting ``and smokeless tobacco 
        products'' after ``cigarettes''.
  (f) Application of Civil Penalties to Relandings of Tobacco 
Products Sold in a Delivery Sale.--
          (1) In general.--Section 5761 of the Internal Revenue 
        Code of 1986 (relating to civil penalties) is amended 
        by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively, and inserting after 
        subsection (c) the following new subsection:
  ``(d) Personal Use Quantities.--
          ``(1) In general.--No quantity of tobacco products 
        other than the quantity referred to in paragraph (2) 
        may be relanded or received as a personal use quantity.
          ``(2) Exception for personal use quantity.--
        Subsection (c) and section 5754 shall not apply to any 
        person who relands or receives tobacco products in the 
        quantity allowed entry free of tax and duty under 
        chapter 98 of the Harmonized Tariff Schedule of the 
        United States, and such person may voluntarily 
        relinquish to the Secretary at the time of entry any 
        excess of such quantity without incurring the penalty 
        under subsection (c).
          ``(3) Special rule for delivery sales.--
                  ``(A) In general.--Paragraph (2) shall not 
                apply to any tobacco product sold in connection 
                with a delivery sale.
                  ``(B) Delivery sale.--For purposes of 
                subparagraph (A), the term `delivery sale' 
                means any sale of a tobacco product to a 
                consumer if--
                          ``(i) the consumer submits the order 
                        for such sale by means of a telephone 
                        or other method of voice transmission, 
                        the mail, or the Internet or other 
                        online service, or the seller is 
                        otherwise not in the physical presence 
                        of the buyer when the request for 
                        purchase or order is made, or
                          ``(ii) the tobacco product is 
                        delivered by use of a common carrier, 
                        private delivery service, or the mail, 
                        or the seller is not in the physical 
                        presence of the buyer when the buyer 
                        obtains personal possession of the 
                        tobacco product.''.
          (2) Conforming amendments.--
                  (A) Subsection (c) of section 5761 of such 
                Code is amended by striking the last two 
                sentences.
                  (B) Paragraph (1) of section 5754(c) of such 
                Code is amended by striking ``section 5761(c)'' 
                and inserting ``section 5761(d)''.
  (g) Effective Date.--The amendments made by this section 
shall apply with respect to goods entered, or withdrawn from 
warehouse for consumption, on or after the 15th day after the 
date of the enactment of this Act.

SEC. 402. ETHANOL TARIFF SCHEDULE.

  Headings 9901.00.50 and 9901.00.52 of the Harmonized Tariff 
Schedule of the United States are each amended in the effective 
period column by striking ``10/1/2007'' each place it appears 
and inserting ``1/1/2009''.

SEC. 403. WITHDRAWAL OF CERTAIN FEDERAL LAND AND INTERESTS IN CERTAIN 
                    FEDERAL LAND FROM LOCATION, ENTRY, AND PATENT UNDER 
                    THE MINING LAWS AND DISPOSITION UNDER THE MINERAL 
                    AND GEOTHERMAL LEASING LAWS.

  (a) Definitions.--In this section:
          (1) Bureau of land management land.--The term 
        ``Bureau of Land Management land'' means the Bureau of 
        Land Management land and any federally-owned minerals 
        located south of the Blackfeet Indian Reservation and 
        east of the Lewis and Clark National Forest to the 
        eastern edge of R. 8 W., beginning in T. 29 N. down to 
        and including T. 19 N. and all of T. 18 N., R. 7 W.
          (2) Eligible federal land.--The term ``eligible 
        Federal land'' means the Bureau of Land Management land 
        and the Forest Service land, as generally depicted on 
        the map.
          (3) Forest service land.--The term ``Forest Service 
        land'' means--
                  (A) the Forest Service land and any 
                federally-owned minerals located in the Rocky 
                Mountain Division of the Lewis and Clark 
                National Forest, including the approximately 
                356,111 acres of land made unavailable for 
                leasing by the August 28, 1997, Record of 
                Decision for the Lewis and Clark National 
                Forest Oil and Gas Leasing Environmental Impact 
                Statement and that is located from T. 31 N. to 
                T. 16 N. and R. 13 W. to R. 7 W.; and
                  (B) the Forest Service land and any 
                federally-owned minerals located within the 
                Badger Two Medicine area of the Flathead 
                National Forest, including--
                          (i) the land located in T. 29 N. from 
                        the western edge of R. 16 W. to the 
                        eastern edge of R. 13 W.; and
                          (ii) the land located in T. 28 N., 
                        Rs. 13 and 14 W.
          (4) Map.--The term ``map'' means the map entitled 
        ``Rocky Mountain Front Mineral Withdrawal Area'' and 
        dated December 31, 2006.
  (b) Withdrawal.--
          (1) In general.--Subject to valid existing rights, 
        the eligible Federal land (including any interest in 
        the eligible Federal land) is withdrawn from--
                  (A) all forms of location, entry, and patent 
                under the mining laws; and
                  (B) disposition under all laws relating to 
                mineral and geothermal leasing.
          (2) Availability of map.--The map shall be on file 
        and available for inspection in the Office of the Chief 
        of the Forest Service.
  (c) Tax Incentive for Sale of Existing Mineral and Geothermal 
Rights to Tax-Exempt Entities.--
          (1) Exclusion.--For purposes of the Internal Revenue 
        Code of 1986, gross income shall not include 25 percent 
        of the qualifying gain from a conservation sale of a 
        qualifying mineral or geothermal interest.
          (2) Qualifying gain.--For purposes of this 
        subsection, the term ``qualifying gain'' means any gain 
        which would be recognized as long-term capital gain 
        under such Code.
          (3) Conservation sale.--For purposes of this 
        subsection, the term ``conservation sale'' means a sale 
        which meets the following requirements:
                  (A) Transferee is an eligible entity.--The 
                transferee of the qualifying mineral or 
                geothermal interest is an eligible entity.
                  (B) Qualifying letter of intent required.--At 
                the time of the sale, such transferee provides 
                the taxpayer with a qualifying letter of 
                intent.
                  (C) Nonapplication to certain sales.--The 
                sale is not made pursuant to an order of 
                condemnation or eminent domain.
          (4) Qualifying mineral or geothermal interest.--For 
        purposes of this subsection--
                  (A) In general.--The term ``qualifying 
                mineral or geothermal interest'' means an 
                interest in any mineral or geothermal deposit 
                located on eligible Federal land which 
                constitutes a taxpayer's entire interest in 
                such deposit.
                  (B) Entire interest.--For purposes of 
                subparagraph (A)--
                          (i) an interest in any mineral or 
                        geothermal deposit is not a taxpayer's 
                        entire interest if such interest in 
                        such mineral or geothermal deposit was 
                        divided in order to avoid the 
                        requirements of such subparagraph or 
                        section 170(f)(3)(A) of such Code, and
                          (ii) a taxpayer's entire interest in 
                        such deposit does not fail to satisfy 
                        such subparagraph solely because the 
                        taxpayer has retained an interest in 
                        other deposits, even if the other 
                        deposits are contiguous with such 
                        certain deposit and were acquired by 
                        the taxpayer along with such certain 
                        deposit in a single conveyance.
          (5) Other definitions.--For purposes of this 
        subsection--
                  (A) Eligible entity.--The term ``eligible 
                entity'' means--
                          (i) a governmental unit referred to 
                        in section 170(c)(1) of such Code, or 
                        an agency or department thereof 
                        operated primarily for 1 or more of the 
                        conservation purposes specified in 
                        clause (i), (ii), or (iii) of section 
                        170(h)(4)(A) of such Code, or
                          (ii) an entity which is--
                                  (I) described in section 
                                170(b)(1)(A)(vi) or section 
                                170(h)(3)(B) of such Code, and
                                  (II) organized and at all 
                                times operated primarily for 1 
                                or more of the conservation 
                                purposes specified in clause 
                                (i), (ii), or (iii) of section 
                                170(h)(4)(A) of such Code.
                  (B) Qualifying letter of intent.--The term 
                ``qualifying letter of intent'' means a written 
                letter of intent which includes the following 
                statement: ``The transferee's intent is that 
                this acquisition will serve 1 or more of the 
                conservation purposes specified in clause (i), 
                (ii), or (iii) of section 170(h)(4)(A) of the 
                Internal Revenue Code of 1986, that the 
                transferee's use of the deposits so acquired 
                will be consistent with section 170(h)(5) of 
                such Code, and that the use of the deposits 
                will continue to be consistent with such 
                section, even if ownership or possession of 
                such deposits is subsequently transferred to 
                another person.''.
          (6) Tax on subsequent transfers.--
                  (A) In general.--A tax is hereby imposed on 
                any subsequent transfer by an eligible entity 
                of ownership or possession, whether by sale, 
                exchange, or lease, of an interest acquired 
                directly or indirectly in--
                          (i) a conservation sale described in 
                        paragraph (1), or
                          (ii) a transfer described in clause 
                        (i), (ii), or (iii) of subparagraph 
                        (D).
                  (B) Amount of tax.--The amount of tax imposed 
                by subparagraph (A) on any transfer shall be 
                equal to the sum of--
                          (i) 20 percent of the fair market 
                        value (determined at the time of the 
                        transfer) of the interest the ownership 
                        or possession of which is transferred, 
                        plus
                          (ii) the product of--
                                  (I) the highest rate of tax 
                                specified in section 11 of such 
                                Code, times
                                  (II) any gain or income 
                                realized by the transferor as a 
                                result of the transfer.
                  (C) Liability.--The tax imposed by 
                subparagraph (A) shall be paid by the 
                transferor.
                  (D) Relief from liability.--The person 
                (otherwise liable for any tax imposed by 
                subparagraph (A)) shall be relieved of 
                liability for the tax imposed by subparagraph 
                (A) with respect to any transfer if--
                          (i) the transferee is an eligible 
                        entity which provides such person, at 
                        the time of transfer, a qualifying 
                        letter of intent,
                          (ii) in any case where the transferee 
                        is not an eligible entity, it is 
                        established to the satisfaction of the 
                        Secretary of the Treasury, that the 
                        transfer of ownership or possession, as 
                        the case may be, will be consistent 
                        with section 170(h)(5) of such Code, 
                        and the transferee provides such 
                        person, at the time of transfer, a 
                        qualifying letter of intent, or
                          (iii) tax has previously been paid 
                        under this paragraph as a result of a 
                        prior transfer of ownership or 
                        possession of the same interest.
                  (E) Administrative provisions.--For purposes 
                of subtitle F of such Code, the taxes imposed 
                by this paragraph shall be treated as excise 
                taxes with respect to which the deficiency 
                procedures of such subtitle apply.
          (7) Reporting.--The Secretary of the Treasury may 
        require such reporting as may be necessary or 
        appropriate to further the purpose under this 
        subsection that any conservation use be in perpetuity.
  (d) Effective Dates.--
          (1) Moratorium.--Subsection (b) shall take effect on 
        the date of the enactment of this Act.
          (2) Tax incentive.--Subsection (c) shall apply to 
        sales occurring on or after the date of the enactment 
        of this Act.

SEC. 404. CONTINUING ELIGIBILITY FOR CERTAIN STUDENTS UNDER DISTRICT OF 
                    COLUMBIA SCHOOL CHOICE PROGRAM.

  (a) In General.--Section 307(a)(4) of the DC School Choice 
Incentive Act of 2003 (sec. 38--1851.06(a)(4), D.C. Official 
Code) is amended by striking ``200 percent'' and inserting the 
following: ``200 percent (or, in the case of an eligible 
student whose first year of participation in the program is an 
academic year ending in June 2005 or June 2006 and whose second 
or succeeding year is an academic year ending on or before June 
2009, 300 percent)''.
  (b) Effective Date.--The amendment made by subsection (a) 
shall take effect as if included in the enactment of the DC 
School Choice Incentive Act of 2003.

SEC. 405. STUDY ON ESTABLISHING UNIFORM NATIONAL DATABASE ON ELDER 
                    ABUSE.

  (a) Study.--
          (1) In general.--The Secretary of Health and Human 
        Services, in consultation with the Attorney General, 
        shall conduct a study on establishing a uniform 
        national database on elder abuse.
          (2) Issues studied.--The study conducted under 
        paragraph (1) may consider the following:
                  (A) Current methodologies used for collecting 
                data on elder abuse, including a determination 
                of the shortcomings, strengths, and 
                commonalities of existing data collection 
                efforts and reporting forms, and how a uniform 
                national database would capitalize on such 
                efforts.
                  (B) The process by which uniform national 
                standards for reporting on elder abuse could be 
                implemented, including the identification and 
                involvement of necessary stakeholders, 
                financial resources needed, timelines, and the 
                treatment of existing standards with respect to 
                elder abuse.
                  (C) Potential conflicts in Federal, State, 
                and local laws, and enforcement and 
                jurisdictional issues that could occur as a 
                result of the creation of a uniform national 
                database on elder abuse.
                  (D) The scope, purpose, and variability of 
                existing definitions used by Federal, State, 
                and local agencies with respect to elder abuse.
          (3) Duration.--The study conducted under paragraph 
        (1) shall be conducted for a period not to exceed 2 
        years.
  (b) Report.--Not later than 180 days after the completion of 
the study conducted under subsection (a)(1), the Secretary of 
Health and Human Services shall submit a report to the 
Committee on Finance of the Senate and the Committee on Ways 
and Means of the House of Representatives containing the 
findings of the study, together with recommendations on how to 
implement a uniform national database on elder abuse.
  (c) Authorization.--There are authorized to be appropriated 
to carry out this section, $500,000 for each of fiscal years 
2007 and 2008.

SEC. 406. TEMPORARY DUTY REDUCTIONS FOR CERTAIN COTTON SHIRTING FABRIC.

  (a) Certain Cotton Shirting Fabrics.--
          (1) In general.--Subchapter II of chapter 99 of the 
        Harmonized Tariff Schedule of the United States is 
        amended by inserting in numerical sequence the 
        following new headings:

``            9902.52.08      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.21, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.09      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.22, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.10      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.29, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.11      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.31, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.12      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.32, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.13      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.39, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.14      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.41, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.15      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.42, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.16      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.49, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.17      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.51, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.18      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.52, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.19      Woven fabrics    Free         No change    No change    On or before
                               of cotton, of                                           12/31/2009
                               a type
                               described in
                               subheading
                               5208.59, of
                               average yarn
                               number
                               exceeding 135
                               metric, other
                               than fabrics
                               provided for
                               in headings
                               9902.52.20
                               through
                               9902.52.31,
                               certified by
                               the importer
                               to be suitable
                               for use in
                               men's and
                               boys' shirts,
                               the foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Notes 18 and
                               19 of this
                               subchapter....
              9902.52.20      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.21, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.21      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.22, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.22      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.29, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.23      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.31, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.24      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.32, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.25      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.39, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.26      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.41, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.27      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.42, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.28      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.49, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.29      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.51, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.30      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009
                               type described
                               in subheading
                               5208.52, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....
              9902.52.31      Woven fabrics    Free         No change    No change    On or before
                               of cotton of a                                          12/31/2009        ''.
                               type described
                               in subheading
                               5208.59, of
                               average yarn
                               number
                               exceeding 135
                               metric,
                               certified by
                               the importer
                               to be wholly
                               of pima cotton
                               grown in the
                               United States
                               and to be
                               suitable for
                               use in men's
                               and boys'
                               shirts, the
                               foregoing
                               imported by or
                               for the
                               benefit of a
                               manufacturer
                               of men's and
                               boys' shirts
                               under the
                               terms of U.S.
                               Note 18 of
                               this
                               subchapter....

          (2) Definitions and limitation on quantity of 
        imports.--The U.S. Notes to subchapter II of chapter 99 
        of the Harmonized Tariff Schedule of the United States 
        are amended by adding at the end the following:
  ``18. For purposes of headings 9902.52.08 through 9902.52.31, 
the term `manufacturer' means a person or entity that cuts and 
sews men's and boys' shirts in the United States.
  ``19. The aggregate quantity of fabrics entered under 
headings 9902.52.08 through 9902.52.19 from January 1 to 
December 31 of each year, inclusive, by or on behalf of each 
manufacturer of men's and boys' shirts shall be limited to 85 
percent of the total square meter equivalents of all imported 
woven fabrics of cotton containing 85 percent or more by weight 
of cotton used by such manufacturer in cutting and sewing men's 
and boys' cotton shirts in the United States and purchased by 
such manufacturer during calendar year 2000.''.
  (b) Determination of Tariff-Rate Quotas.--
          (1) Authority to issue licenses and license use.--In 
        order to implement the limitation on the quantity of 
        cotton woven fabrics that may be entered under headings 
        9902.52.08 through 9902.52.19 of the Harmonized Tariff 
        Schedule of the United States, as required by U.S. Note 
        19 to subchapter II of chapter 99 of such Schedule, the 
        Secretary of Commerce shall issue licenses to eligible 
        manufacturers under such headings 9902.52.08 through 
        9902.52.19, specifying the restrictions under each such 
        license on the quantity of cotton woven fabrics that 
        may be entered each year by or on behalf of the 
        manufacturer. A licensee may assign the authority (in 
        whole or in part) under the license to import fabric 
        under headings 9902.52.08 through 9902.52.19 of such 
        Schedule.
          (2) Licenses under u.s. note 19.--For purposes of 
        U.S. Note 19 to subchapter II of chapter 99 of the 
        Harmonized Tariff Schedule of the United States, the 
        Secretary of Commerce shall issue a license to a 
        manufacturer within 60 days after the manufacturer 
        files with the Secretary of Commerce an application 
        containing a notarized affidavit from an officer of the 
        manufacturer that the manufacturer is eligible to 
        receive a license and stating the quantity of imported 
        woven fabrics of cotton containing 85 percent or more 
        by weight of cotton purchased during calendar year 2000 
        for use in the cutting and sewing men's and boys' 
        shirts in the United States.
          (3) Affidavits.--For purposes of an affidavit 
        described in this subsection, the date of purchase 
        shall be--
                  (A) the invoice date if the manufacturer is 
                not the importer of record; and
                  (B) the date of entry if the manufacturer is 
                the importer of record.

SEC. 407. COTTON TRUST FUND.

  (a) Establishment of Trust Fund.--There is established in the 
Treasury of the United States a trust fund to be known as the 
``Pima Cotton Trust Fund'' (in this section referred to as the 
``Trust Fund''), consisting of such amounts as may be 
transferred to the Trust Fund under subsection (b).
  (b) Transfer of Amounts.--
          (1) In general.--Beginning October 1, 2006, the 
        Secretary of the Treasury shall transfer to the Trust 
        Fund, from the general fund of the Treasury, amounts 
        determined by the Secretary of the Treasury to be 
        equivalent to the amounts received in the general fund 
        that are attributable to duties received since January 
        1, 1994, on articles under subheadings 5208.21.60, 
        5208.22.80, 5208.29.80, 5208.31.80, 5208.32.50, 
        5208.39.80, 5208.41.80, 5208.42.50, 5208.49.80, 
        5208.51.80, 5208.52.50, and 5208.59.80 of the 
        Harmonized Tariff Schedule of the United States, 
        subject to the limitation in paragraph (2).
          (2) Limitation.--The Secretary may not transfer more 
        than $16,000,000 to the Trust Fund in any fiscal year, 
        and may not transfer any amount beginning on or after 
        October 1, 2008.
  (c) Distribution of Funds.--From amounts in the Trust Fund, 
the Commissioner of the Bureau of Customs and Border Protection 
shall make the following payments annually beginning in fiscal 
year 2007:
          (1) 25 percent of the amounts in the Trust Fund shall 
        be paid annually to a nationally recognized association 
        established for the promotion of pima cotton grown in 
        the United States for the use in textile and apparel 
        goods.
          (2) 25 percent of the amounts in the Trust Fund shall 
        be paid annually to yarn spinners of pima cotton grown 
        in the United States, and shall be allocated to each 
        spinner in an amount that bears the same ratio as--
                  (A) the spinner's production of ring spun 
                cotton yarns, measuring less than 83.33 decitex 
                (exceeding 120 metric number) from pima cotton 
                grown in the United States in single and plied 
                form during the period January 1, 1998 through 
                December 31, 2003 (as evidenced by an affidavit 
                provided by the spinner) bears to--
                  (B) the production of the yarns described in 
                subparagraph (A) during the period January 1, 
                1998 through December 31, 2003 for all spinners 
                who qualify under this paragraph.
          (3) 50 percent of the amounts in the Trust Fund shall 
        be paid annually to those manufacturers who cut and sew 
        cotton shirts in the United States who certify that 
        they used imported cotton fabric during the period 
        January 1, 1998, through July 1, 2003, and shall be 
        allocated to each such manufacturer in an amount that 
        bears the same ratio as--
                  (A) the dollar value (excluding duty, 
                shipping, and related costs) of imported woven 
                cotton shirting fabric of 80s or higher count 
                and 2-ply in warp purchased by the manufacturer 
                during calendar year 2002 (as evidenced by an 
                affidavit from the manufacturer that meets the 
                requirements of subsection (d)) used in the 
                manufacturing of men's and boys' cotton shirts, 
                bears to--
                  (B) the dollar value (excluding duty, 
                shipping, and related costs) of the fabric 
                described in subparagraph (A) purchased during 
                calendar year 2002 by all manufacturers who 
                qualify under this paragraph.
  (d) Affidavit of Shirting Manufacturers.--The affidavit 
required by subsection (c)(3)(A) is a notarized affidavit 
provided by an officer of the manufacturer of men's and boys' 
shirts concerned that affirms--
          (1) that the manufacturer used imported cotton fabric 
        during the period January 1, 1998, through July 1, 
        2003, to cut and sew men's and boys' woven cotton 
        shirts in the United States;
          (2) the dollar value of imported woven cotton 
        shirting fabric of 80s or higher count and 2-ply in 
        warp purchased during calendar year 2002;
          (3) that the manufacturer maintains invoices along 
        with other supporting documentation (such as price 
        lists and other technical descriptions of the fabric 
        qualities) showing the dollar value of such fabric 
        purchased, the date of purchase, and evidencing the 
        fabric as woven cotton fabric of 80s or higher count 
        and 2-ply in warp; and
          (4) that the fabric was suitable for use in the 
        manufacturing of men's and boys' cotton shirts.
  (e) Date of Purchase.--For purposes of the affidavit under 
subsection (d), the date of purchase shall be the invoice date, 
and the dollar value shall be determined excluding duty, 
shipping, and related costs.
  (f) Affidavit of Yarn Spinners.--The affidavit required by 
subsection (c)(2)(A) is a notarized affidavit provided by an 
officer of the producer of ring spun yarns that affirms--
          (1) that the producer used pima cotton grown in the 
        United States during the period January 1, 2002, 
        through December 31, 2002, to produce ring spun cotton 
        yarns, measuring less than 83.33 decitex (exceeding 120 
        metric number), in single and plied form during 2002;
          (2) the quantity, measured in pounds, of ring spun 
        cotton yarns, measuring less than 83.33 decitex 
        (exceeding 120 metric number), in single and plied form 
        during calendar year 2002; and
          (3) that the producer maintains supporting 
        documentation showing the quantity of such yarns 
        produced, and evidencing the yarns as ring spun cotton 
        yarns, measuring less than 83.33 decitex (exceeding 120 
        metric number), in single and plied form during 
        calendar year 2002.
  (g) No Appeal.--Any amount paid by the Commissioner of the 
Bureau of Customs and Border Protection under this section 
shall be final and not subject to appeal or protest.

SEC. 408. TAX COURT REVIEW OF REQUESTS FOR EQUITABLE RELIEF FROM JOINT 
                    AND SEVERAL LIABILITY.

  (a) In General.--Paragraph (1) of section 6015(e) of the 
Internal Revenue Code of 1986 (relating to petition for tax 
court review) is amended by inserting ``, or in the case of an 
individual who requests equitable relief under subsection (f)'' 
after ``who elects to have subsection (b) or (c) apply''.
  (b) Conforming Amendments.--
          (1) Section 6015(e)(1)(A)(i)(II) of such Code is 
        amended by inserting ``or request is made'' after 
        ``election is filed''.
          (2) Section 6015(e)(1)(B)(i) of such Code is 
        amended--
                  (A) by inserting ``or requesting equitable 
                relief under subsection (f)'' after ``making an 
                election under subsection (b) or (c)'', and
                  (B) by inserting ``or request'' after ``to 
                which such election''.
          (3) Section 6015(e)(1)(B)(ii) of such Code is amended 
        by inserting ``or to which the request under subsection 
        (f) relates'' after ``to which the election under 
        subsection (b) or (c) relates''.
          (4) Section 6015(e)(4) of such Code is amended by 
        inserting ``or the request for equitable relief under 
        subsection (f)'' after ``the election under subsection 
        (b) or (c)''.
          (5) Section 6015(e)(5) of such Code is amended by 
        inserting ``or who requests equitable relief under 
        subsection (f)'' after ``who elects the application of 
        subsection (b) or (c)''.
          (6) Section 6015(g)(2) of such Code is amended by 
        inserting ``or of any request for equitable relief 
        under subsection (f)'' after ``any election under 
        subsection (b) or (c)''.
          (7) Section 6015(h)(2) of such Code is amended by 
        inserting ``or a request for equitable relief made 
        under subsection (f)'' after ``with respect to an 
        election made under subsection (b) or (c)''.
  (c) Effective Date.--The amendments made by this section 
shall apply with respect to liability for taxes arising or 
remaining unpaid on or after the date of the enactment of this 
Act.

  Amend the title to read as follows: ``An Act to amend the 
Internal Revenue Code of 1986 to extend expiring provisions, 
and for other purposes.''

                                  
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