To change the enactment date.

SA 4727. Mr. BAUCUS (for Mr. Reid (for himself, Mr. Rockefeller, Mr.
Kerry, Mr. Carper, Ms. Stabenow, Mr. Schumer, and Mr. Menendez))
proposed an amendment to the bill H.R. 4853, to amend the Internal
Revenue Code of 1986 to extend the funding and expenditure authority of
the Airport and Airway Trust Fund, to amend title 49, United States
Code, to extend authorizations for the airport improvement program, and
for other purposes; as follows:

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

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

(a) Short Title.--This Act may be cited as the ``Middle
Class Tax Cut Act of 2010''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act
is as follows:

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

TITLE I--PERMANENT MIDDLE CLASS TAX RELIEF

Sec. 101. Repeal of sunset on certain individual income tax rate
relief.
Sec. 102. Reduced rates on capital gains and dividends made permanent.
Sec. 103. Repeal of sunset on expansion of child tax credit.
Sec. 104. Repeal of sunset on marriage penalty relief.
Sec. 105. Repeal of sunset on expansion of dependent care credit.
Sec. 106. Repeal of sunset on expansion of adoption credit and adoption
assistance programs.
Sec. 107. Repeal of sunset on employer-provided child care credit.
Sec. 108. Repeal of sunset on expansion of earned income tax credit.

TITLE II--PERMANENT EDUCATION TAX RELIEF

Sec. 201. Repeal of sunset on education individual retirement accounts.
Sec. 202. Repeal of sunset on employer-provided educational assistance.
Sec. 203. Repeal of sunset on student loan interest deduction.
Sec. 204. Repeal of sunset on exclusion of certain scholarships.
Sec. 205. Repeal of sunset on arbitrage rebate exception for
governmental bonds.
Sec. 206. Repeal of sunset on treatment of qualified public educational
facility bonds.
Sec. 207. Repeal of sunset on American Opportunity Tax Credit.
Sec. 208. Repeal of sunset on allowance of computer technology and
equipment as a qualified higher education expense for
section 529 accounts.

TITLE III--PERMANENT ESTATE TAX RELIEF

Sec. 301. Repeal of EGTRRA sunset.
Sec. 302. Reinstatement of estate tax; repeal of carryover basis.
Sec. 303. Modifications to estate, gift, and generation-skipping
transfer taxes.
Sec. 304. Applicable exclusion amount increased by unused exclusion
amount of deceased spouse.
Sec. 305. Exclusion from gross estate of certain farmland so long as
farmland use by family continues.
Sec. 306. Increase in limitations on the amount excluded from the gross
estate with respect to land subject to a qualified
conservation easement.
Sec. 307. Modification of rules for value of certain farm, etc., real
property.
Sec. 308. Required minimum 10-year term, etc., for grantor retained
annuity trusts.
Sec. 309. Consistent basis reporting between estate and person
acquiring property from decedent.

TITLE IV--PERMANENT SMALL BUSINESS TAX RELIEF

Sec. 401. Repeal of sunset on increased limitations on small business
expensing.

TITLE V--ALTERNATIVE MINIMUM TAX RELIEF

Sec. 501. Extension of increased alternative minimum tax exemption
amount.
Sec. 502. Extension of alternative minimum tax relief for nonrefundable
personal credits.

TITLE VI--TEMPORARY EXTENSION OF CERTAIN PROVISIONS EXPIRING IN 2009

Subtitle A--Infrastructure Incentives

Sec. 601. Extension of Build America Bonds.
Sec. 602. Exempt-facility bonds for sewage and water supply facilities.
Sec. 603. Extension of exemption from alternative minimum tax treatment
for certain tax-exempt bonds.
Sec. 604. Extension and additional allocations of recovery zone bond
authority.
Sec. 605. Allowance of new markets tax credit against alternative
minimum tax.
Sec. 606. Extension of tax-exempt eligibility for loans guaranteed by
Federal home loan banks.
Sec. 607. Extension of temporary small issuer rules for allocation of
tax-exempt interest expense by financial institutions.

Subtitle B--Energy

Sec. 611. Alternative motor vehicle credit for new qualified hybrid
motor vehicles other than passenger automobiles and light
trucks.
Sec. 612. Incentives for biodiesel and renewable diesel.
Sec. 613. Credit for electricity produced at certain open-loop biomass
facilities.
Sec. 614. Credit for steel industry fuel.
Sec. 615. Credit for producing fuel from coke or coke gas.
Sec. 616. New energy efficient home credit.
Sec. 617. Excise tax credits and outlay payments for alternative fuel
and alternative fuel mixtures.
Sec. 618. Special rule for sales or dispositions to implement FERC or
State electric restructuring policy for qualified
electric utilities.
Sec. 619. Suspension of limitation on percentage depletion for oil and
gas from marginal wells.
Sec. 620. Credit for nonbusiness energy property.

Subtitle C--Individual Tax Relief

PART I--Miscellaneous Provisions

Sec. 631. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 632. Additional standard deduction for State and local real
property taxes.
Sec. 633. Deduction of State and local sales taxes.
Sec. 634. Contributions of capital gain real property made for
conservation purposes.
Sec. 635. Above-the-line deduction for qualified tuition and related
expenses.
Sec. 636. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 637. Look-thru of certain regulated investment company stock in
determining gross estate of nonresidents.

PART II--Low-income Housing Credits

Sec. 641. Election for direct payment of low-income housing credit for
2010.
Sec. 642. Low-income housing grant election.

Subtitle D--Business Tax Relief

Sec. 651. Research credit.
Sec. 652. Indian employment tax credit.
Sec. 653. New markets tax credit.
Sec. 654. Railroad track maintenance credit.
Sec. 655. Mine rescue team training credit.
Sec. 656. Employer wage credit for employees who are active duty
members of the uniformed services.
Sec. 657. 5-year depreciation for farming business machinery and
equipment.
Sec. 658. 15-year straight-line cost recovery for qualified leasehold
improvements, qualified restaurant buildings and
improvements, and qualified retail improvements.
Sec. 659. 7-year recovery period for motorsports entertainment
complexes.
Sec. 660. Accelerated depreciation for business property on an Indian
reservation.
Sec. 661. Enhanced charitable deduction for contributions of food
inventory.
Sec. 662. Enhanced charitable deduction for contributions of book
inventories to public schools.
Sec. 663. Enhanced charitable deduction for corporate contributions of
computer inventory for educational purposes.
Sec. 664. Election to expense mine safety equipment.
Sec. 665. Special expensing rules for certain film and television
productions.
Sec. 666. Expensing of environmental remediation costs.
Sec. 667. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 668. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 669. Exclusion of gain or loss on sale or exchange of certain
brownfield sites from unrelated business income.

[[Page S8403]]

Sec. 670. Timber REIT modernization.
Sec. 671. Treatment of certain dividends of regulated investment
companies.
Sec. 672. RIC qualified investment entity treatment under FIRPTA.
Sec. 673. Exceptions for active financing income.
Sec. 674. Look-thru treatment of payments between related controlled
foreign corporations under foreign personal holding
company rules.
Sec. 675. Basis adjustment to stock of S corps making charitable
contributions of property.
Sec. 676. Empowerment zone tax incentives.
Sec. 677. Tax incentives for investment in the District of Columbia.
Sec. 678. Renewal community tax incentives.
Sec. 679. Temporary increase in limit on cover over of rum excise taxes
to Puerto Rico and the Virgin Islands.
Sec. 680. American Samoa economic development credit.
Sec. 681. Election to temporarily utilize unused AMT credits determined
by domestic investment.
Sec. 682. Reduction in corporate rate for qualified timber gain.
Sec. 683. Study of extended tax expenditures.

Subtitle E--Temporary Disaster Relief Provisions

PART I--National Disaster Relief

Sec. 691. Waiver of certain mortgage revenue bond requirements.
Sec. 692. Losses attributable to federally declared disasters.
Sec. 693. Special depreciation allowance for qualified disaster
property.
Sec. 694. Net operating losses attributable to federally declared
disasters.
Sec. 695. Expensing of qualified disaster expenses.

PART II--Regional Provisions

subpart a--new york liberty zone

Sec. 696. Special depreciation allowance for nonresidential and
residential real property.
Sec. 697. Tax-exempt bond financing.

subpart b--go zone

Sec. 698. Increase in rehabilitation credit.
Sec. 699. Work opportunity tax credit with respect to certain
individuals affected by Hurricane Katrina for employers
inside disaster areas.
Sec. 700. Extension of low-income housing credit rules for buildings in
GO zones.

TITLE VII--TECHNICAL CORRECTIONS TO PENSION FUNDING LEGISLATION

Sec. 701. Definition of eligible plan year.
Sec. 702. Eligible charity plans.
Sec. 703. Suspension of certain funding level limitations.
Sec. 704. Optional use of 30-year amortization periods.

TITLE VIII--TEMPORARY EXTENSION OF CERTAIN PROVISIONS ENDING IN 2010 OR
2011

Subtitle A--Unemployment Benefits

Sec. 801. Extension of unemployment insurance provisions.
Sec. 802. Temporary modification of indicators under the extended
benefit program.

Subtitle B--Small Business

Sec. 811. Temporary exclusion of 100 percent of gain on certain small
business stock.
Sec. 812. General business credits of eligible small businesses carried
back 5 years.
Sec. 813. General business credits of eligible small businesses not
subject to alternative minimum tax.
Sec. 814. Extension of increase in amount allowed as deduction for
start-up expenditures.
Sec. 815. Extension of deduction for health insurance costs in
computing self-employment taxes.

Subtitle C--Energy

Sec. 821. Alternative fuel vehicle refueling property.
Sec. 822. Elective payment for specified energy property.
Sec. 823. Qualifying advanced energy project credit.
Sec. 824. New clean renewable energy bonds.
Sec. 825. Alternative motor vehicle credit for new qualified
alternative fuel vehicles.
Sec. 826. Extension of provisions related to alcohol used as fuel.
Sec. 827. Energy efficient appliance credit.
Sec. 828. Reduced depreciation period for natural gas distribution
facilities.

Subtitle D--Education

Sec. 831. Qualified school construction bonds.

Subtitle E--Other Employee and Housing Relief

Sec. 841. Making work pay credit.
Sec. 842. Work opportunity credit.
Sec. 843. Exclusion from income for benefits provided to volunteer
firefighters and emergency medical responders.
Sec. 844. Parity for exclusion from income for employer-provided mass
transit and parking benefits.
Sec. 845. Qualified mortgage bonds for refinancing of subprime loans.

TITLE IX--OTHER PROVISIONS

Sec. 901. Repeal of expansion of information reporting requirements.
Sec. 902. Repeal of sunset on tax treatment of Alaska Native Settlement
Trusts.
Sec. 903. Repeal of sunset on expansion of authority to postpone
certain tax-related deadlines.
Sec. 904. Refunds disregarded in the administration of Federal programs
and federally assisted programs.
Sec. 905. Treatment of securities of a controlled corporation exchanged
for assets in certain reorganizations.

TITLE X--BUDGETARY PROVISIONS

Sec. 1001. Determination of budgetary effects.
Sec. 1002. Emergency designations.

TITLE I--PERMANENT MIDDLE CLASS TAX RELIEF

SEC. 101. REPEAL OF SUNSET ON CERTAIN INDIVIDUAL INCOME TAX
RATE RELIEF.

(a) Individual Income Tax Rates.--
(1) Repeal of sunset.--Section 901 of the Economic Growth
and Tax Relief Reconciliation Act of 2001 shall not apply to
the amendments made by section 101 of such Act.
(2) 25- and 28- percent rate brackets made permanent.--
Paragraph (2) of section 1(i) is amended to read as follows:
``(2) 25- and 28- percent rate brackets.--The tables under
subsections (a), (b), (c), (d), and (e) shall be applied--
``(A) by substituting `25%' for `28%' each place it appears
(before the application of subparagraph (B)), and
``(B) by substituting `28%' for `31%' each place it
appears.''.
(3) 33-percent rate bracket.--Subsection (i) of section 1
is amended by redesignating paragraph (3) as paragraph (4)
and by inserting after paragraph (2) the following new
paragraph:
``(3) 33-percent rate bracket.--
``(A) In general.--In the case of taxable years beginning
after December 31, 2010--
``(i) the rate of tax under subsections (a), (b), (c), and
(d) on a taxpayer's taxable income in the fourth rate bracket
shall be 33 percent to the extent such income does not exceed
an amount equal to the excess of--

``(I) the applicable amount, over
``(II) the dollar amount at which such bracket begins, and

``(ii) the 36 percent rate of tax under such subsections
shall apply only to the taxpayer's taxable income in such
bracket in excess of the amount to which clause (i) applies.
``(B) Applicable amount.--For purposes of this paragraph,
the term `applicable amount' means the excess of--
``(i) the applicable threshold, over
``(ii) the sum of the following amounts in effect for the
taxable year:

``(I) the basic standard deduction (within the meaning of
section 63(c)(2)), and
``(II) the exemption amount (within the meaning of section
151(d)(1) (or, in the case of subsection (a), 2 such
exemption amounts).

``(C) Applicable threshold.--For purposes of this
paragraph, the term `applicable threshold' means--
``(i) $250,000 in the case of subsection (a),
``(ii) $200,000 in the case of subsections (b) and (c), and
``(iii) \1/2\ the amount applicable under clause (i) (after
adjustment, if any, under subparagraph (E)) in the case of
subsection (d).
``(D) Fourth rate bracket.--For purposes of this paragraph,
the term `fourth rate bracket' means the bracket which would
(determined without regard to this paragraph) be the 36-
percent rate bracket.
``(E) Inflation adjustment.--For purposes of this
paragraph, a rule similar to the rule of paragraph (1)(C)
shall apply with respect to taxable years beginning in
calendar years after 2010, applied by substituting `2008' for
`1992' in subsection (f)(3)(B).''.
(b) Phaseout of Personal Exemptions and Itemized
Deductions.--
(1) Overall limitation on itemized deductions.--Section 68
is amended--
(A) by striking ``the applicable amount'' the first place
it appears in subsection (a) and inserting ``the applicable
threshold in effect under section 1(i)(3)'',
(B) by striking ``the applicable amount'' in subsection
(a)(1) and inserting ``such applicable threshold'',
(C) by striking subsection (b) and redesignating
subsections (c), (d), and (e) as subsections (b), (c), and
(d), respectively, and
(D) by striking subsections (f) and (g).
(2) Phaseout of deductions for personal exemptions.--
(A) In general.--Paragraph (3) of section 151(d) is
amended--
(i) by striking ``the threshold amount'' in subparagraphs
(A) and (B) and inserting ``the applicable threshold in
effect under section 1(i)(3)'',
(ii) by striking subparagraph (C) and redesignating
subparagraph (D) as subparagraph (C), and
(iii) by striking subparagraphs (E) and (F).
(B) Conforming amendments.--Paragraph (4) of section 151(d)
is amended--
(i) by striking subparagraph (B),
(ii) by redesignating clauses (i) and (ii) of subparagraph
(A) as subparagraphs (A) and

[[Page S8404]]

(B), respectively, and by indenting such subparagraphs (as so
redesignated) accordingly, and
(iii) by striking all that precedes ``in a calendar year
after 1989,'' and inserting the following:
``(4) Inflation adjustment.--In the case of any taxable
year beginning''.
(3) Nonapplication of egtrra sunset.--Section 901 of the
Economic Growth and Tax Relief Reconciliation Act of 2001
shall not apply to any amendment made by section 102 or 103
of such Act.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.

SEC. 102. REDUCED RATES ON CAPITAL GAINS AND DIVIDENDS MADE
PERMANENT.

(a) In General.--Section 303 of the Jobs and Growth Tax
Relief Reconciliation Act of 2003 (relating to sunset of
title) is hereby repealed.
(b) 20-percent Capital Gains Rate for Certain High Income
Individuals.--
(1) In general.--Paragraph (1) of section 1(h) is amended
by striking subparagraph (C), by redesignating subparagraphs
(D) and (E) as subparagraphs (E) and (F) and by inserting
after subparagraph (B) the following new subparagraphs:
``(C) 15 percent of the lesser of--
``(i) so much of the adjusted net capital gain (or, if
less, taxable income) as exceeds the amount on which a tax is
determined under subparagraph (B), or
``(ii) the excess (if any) of--

``(I) the amount of taxable income which would (without
regard to this paragraph) be taxed at a rate below 36
percent, over
``(II) the sum of the amounts on which a tax is determined
under subparagraphs (A) and (B),

``(D) 20 percent of the adjusted net capital gain (or, if
less, taxable income) in excess of the sum of the amounts on
which tax is determined under subparagraphs (B) and (C),''.
(2) Minimum tax.--Paragraph (3) of section 55(b) is amended
by striking subparagraph (C), by redesignating subparagraph
(D) as subparagraph (E), and by inserting after subparagraph
(B) the following new subparagraphs:
``(C) 15 percent of the lesser of--
``(i) so much of the adjusted net capital gain (or, if
less, taxable excess) as exceeds the amount on which tax is
determined under subparagraph (B), or
``(ii) the excess described in section 1(h)(1)(C)(ii), plus
``(D) 20 percent of the adjusted net capital gain (or, if
less, taxable excess) in excess of the sum of the amounts on
which tax is determined under subparagraphs (B) and (C),
plus''.
(c) Conforming Amendments.--
(1) The following provisions are each amended by striking
``15 percent'' and inserting ``20 percent'':
(A) Section 531.
(B) Section 541.
(C) Section 1445(e)(1).
(D) The second sentence of section 7518(g)(6)(A).
(E) Section 53511(f)(2) of title 46, United States Code.
(2) Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by
striking ``5 percent (0 percent in the case of taxable years
beginning after 2007)'' and inserting ``0 percent''.
(3) Section 1445(e)(6) is amended by striking ``15 percent
(20 percent in the case of taxable years beginning after
December 31, 2010)'' and inserting ``20 percent''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by subsections (b) and (c) shall apply to
taxable years beginning after December 31, 2010.
(2) Withholding.--The amendments made by paragraphs (1)(C)
and (3) of subsection (c) shall apply to amounts paid on or
after January 1, 2011.

SEC. 103. REPEAL OF SUNSET ON EXPANSION OF CHILD TAX CREDIT.

(a) Repeal of Sunset on Modifications to Credit.--Title IX
of the Economic Growth and Tax Relief Reconciliation Act of
2001 (relating to sunset of provisions of such Act) shall not
apply to sections 201 (relating to modifications to child tax
credit) and 203 (relating to refunds disregarded in the
administration of Federal programs and federally assisted
programs) of such Act.
(b) Permanent Increase in Refundable Portion of Credit.--
(1) In general.--Clause (i) of section 24(d)(1)(B) is
amended by striking ``$10,000'' and inserting ``$3,000''.
(2) Conforming amendment.--Subsection (d) of section 24 is
amended by striking paragraph (4).
(3) Elimination of inflation adjustment.--Subsection (d) of
section 24 is amended by striking paragraph (3).
(4) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31,
2010.

SEC. 104. REPEAL OF SUNSET ON MARRIAGE PENALTY RELIEF.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to sections 301, 302, and 303(a)
of such Act (relating to marriage penalty relief).

SEC. 105. REPEAL OF SUNSET ON EXPANSION OF DEPENDENT CARE
CREDIT.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 204 of such Act
(relating to dependent care credit).

SEC. 106. REPEAL OF SUNSET ON EXPANSION OF ADOPTION CREDIT
AND ADOPTION ASSISTANCE PROGRAMS.

(a) Repeal of EGTRRA Sunset.--Title IX of the Economic
Growth and Tax Relief Reconciliation Act of 2001 (relating to
sunset of provisions of such Act) shall not apply to section
202 of such Act (relating to expansion of adoption credit and
adoption assistance programs).
(b) Technical Amendments Relating to Expansion Under
PPACA.--
(1) Repeal of sunset.--Notwithstanding section 10909(c) of
the Patient Protection and Affordable Care Act, title IX of
the Economic Growth and Tax Relief Reconciliation Act of 2001
(relating to sunset of provisions of such Act) shall not
apply to the amendments made by section 10909 of the Patient
Protection and Affordable Care Act.
(2) Codification of sunset.--
(A) Refundable credit.--Section 36C is amended by adding at
the end the following new subsection:
``(j) Termination.--This section shall not apply to
expenses paid in taxable years beginning after December 31,
2011.''.
(B) Adoption assistance programs.--
(i) In general.--Section 137(b) is amended by adding at the
end the following new paragraph:
``(4) Special rule for 2010 and 2011.--In the case of any
taxable year beginning in 2010 or 2011, paragraph (1) and
subsection (a)(2) shall each be applied by substituting
`$13,170' for `$10,000'.''.
(ii) Inflation adjustment for years to which special rule
applies.--Paragraph (1) of section 137(f) is amended--

(I) by inserting ``for 2011'' after ``limitations'' in the
heading, and
(II) by striking ``after December 31, 2010, each of the
dollar amounts in subsections (a)(2) and (b)(1)'' inserting
``after December 31, 2010, and before January 1, 2012, the
$13,170 dollar amount in subsection (b)(4)''.

(iii) Inflation adjustment for other years.--Paragraph (2)
of section 137(f) is amended--

(I) by inserting ``and dollar limitations for other years''
after ``limitation'' in the heading,
(II) by striking ``the dollar amount in subsection
(b)(2)(A)'' and inserting ``each of the dollar amounts in
subsection (a)(2) and paragraphs (1) and (2)(A) of subsection
(b)'', and
(III) by adding at the end the following new sentence:
``This paragraph shall not apply to the dollar amounts in
subsections (a)(2) and (b)(1) for any taxable year to which
paragraph (1) applies.''.

(iv) Conforming amendments.--Subsections (a)(2) and (b)(1)
of section 137 are each amended by striking ``$13,170'' each
place it appears in the text and in the heading and inserting
``$10,000''.
(C) Effective date.--The amendments made by this paragraph
shall take effect as if included in section 10909 of the
Patient Protection and Affordable Care Act.
(3) Non-refundable adoption credit allowed for years to
which refundable credit not applicable.--
(A) In general.--Part IV of subchapter A of chapter 1 is
amended by inserting after section 22 the following new
section:

``SEC. 23. ADOPTION EXPENSES.

``(a) Allowance of Credit.--
``(1) In general.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter the amount of the qualified adoption expenses paid or
incurred by the taxpayer.
``(2) Year credit allowed.--The credit under paragraph (1)
with respect to any expense shall be allowed--
``(A) in the case of any expense paid or incurred before
the taxable year in which such adoption becomes final, for
the taxable year following the taxable year during which such
expense is paid or incurred, and
``(B) in the case of an expense paid or incurred during or
after the taxable year in which such adoption becomes final,
for the taxable year in which such expense is paid or
incurred.
``(3) $10,000 credit for adoption of child with special
needs regardless of expenses.--In the case of an adoption of
a child with special needs which becomes final during a
taxable year, the taxpayer shall be treated as having paid
during such year qualified adoption expenses with respect to
such adoption in an amount equal to the excess (if any) of
$10,000 over the aggregate qualified adoption expenses
actually paid or incurred by the taxpayer with respect to
such adoption during such taxable year and all prior taxable
years.
``(b) Limitations.--
``(1) Dollar limitation.--The aggregate amount of qualified
adoption expenses which may be taken into account under
subsection (a) for all taxable years with respect to the
adoption of a child by the taxpayer shall not exceed $10,000.
``(2) Income limitation.--
``(A) In general.--The amount allowable as a credit under
subsection (a) for any taxable year (determined without
regard to subsection (c)) shall be reduced (but not below
zero) by an amount which bears the same ratio to the amount
so allowable (determined without regard to this paragraph but
with regard to paragraph (1)) as--
``(i) the amount (if any) by which the taxpayer's adjusted
gross income exceeds $150,000, bears to
``(ii) $40,000.

[[Page S8405]]

``(B) Determination of adjusted gross income.--For purposes
of subparagraph (A), adjusted gross income shall be
determined without regard to sections 911, 931, and 933.
``(3) Denial of double benefit.--
``(A) In general.--No credit shall be allowed under
subsection (a) for any expense for which a deduction or
credit is allowed under any other provision of this chapter.
``(B) Grants.--No credit shall be allowed under subsection
(a) for any expense to the extent that funds for such expense
are received under any Federal, State, or local program.
``(4) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section and section 25D) and section 27 for
the taxable year.
``(c) Carryforward of Unused Credit.--
``(1) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of
a taxable year to which section 26(a)(2) applies, if the
credit allowable under subsection (a) for any taxable year
exceeds the limitation imposed by section 26(a)(2) for such
taxable year reduced by the sum of the credits allowable
under this subpart (other than this section and sections 25D
and 1400C), such excess shall be carried to the succeeding
taxable year and added to the credit allowable under
subsection (a) for such taxable year.
``(2) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) for any taxable year exceeds
the limitation imposed by subsection (b)(4) for such taxable
year, such excess shall be carried to the succeeding taxable
year and added to the credit allowable under subsection (a)
for such taxable year.
``(3) Limitation.--No credit may be carried forward under
this subsection to a taxable year following the fifth taxable
year after the taxable year in which the credit arose. For
purposes of the preceding sentence, credits shall be treated
as used on a first-in first-out basis.
``(d) Definitions.--For purposes of this section--
``(1) Qualified adoption expenses.--The term `qualified
adoption expenses' means reasonable and necessary adoption
fees, court costs, attorney fees, and other expenses--
``(A) which are directly related to, and the principal
purpose of which is for, the legal adoption of an eligible
child by the taxpayer,
``(B) which are not incurred in violation of State or
Federal law or in carrying out any surrogate parenting
arrangement,
``(C) which are not expenses in connection with the
adoption by an individual of a child who is the child of such
individual's spouse, and
``(D) which are not reimbursed under an employer program or
otherwise.
``(2) Eligible child.--The term `eligible child' means any
individual who--
``(A) has not attained age 18, or
``(B) is physically or mentally incapable of caring for
himself.
``(3) Child with special needs.--The term `child with
special needs' means any child if--
``(A) a State has determined that the child cannot or
should not be returned to the home of his parents,
``(B) such State has determined that there exists with
respect to the child a specific factor or condition (such as
his ethnic background, age, or membership in a minority or
sibling group, or the presence of factors such as medical
conditions or physical, mental, or emotional handicaps)
because of which it is reasonable to conclude that such child
cannot be placed with adoptive parents without providing
adoption assistance, and
``(C) such child is a citizen or resident of the United
States (as defined in section 217(h)(3)).
``(e) Special Rules for Foreign Adoptions.--In the case of
an adoption of a child who is not a citizen or resident of
the United States (as defined in section 217(h)(3))--
``(1) subsection (a) shall not apply to any qualified
adoption expense with respect to such adoption unless such
adoption becomes final, and
``(2) any such expense which is paid or incurred before the
taxable year in which such adoption becomes final shall be
taken into account under this section as if such expense were
paid or incurred during such year.
``(f) Filing Requirements.--
``(1) Married couples must file joint returns.--Rules
similar to the rules of paragraphs (2), (3), and (4) of
section 21(e) shall apply for purposes of this section.
``(2) Taxpayer must include tin.--
``(A) In general.--No credit shall be allowed under this
section with respect to any eligible child unless the
taxpayer includes (if known) the name, age, and TIN of such
child on the return of tax for the taxable year.
``(B) Other methods.--The Secretary may, in lieu of the
information referred to in subparagraph (A), require other
information meeting the purposes of subparagraph (A),
including identification of an agent assisting with the
adoption.
``(g) Basis Adjustments.--For purposes of this subtitle, if
a credit is allowed under this section for any expenditure
with respect to any property, the increase in the basis of
such property which would (but for this subsection) result
from such expenditure shall be reduced by the amount of the
credit so allowed.
``(h) Adjustments for Inflation.--In the case of a taxable
year beginning after December 31, 2002, each of the dollar
amounts in subsections (a)(3) and paragraphs (1) and
(2)(A)(i) of subsection (b) shall be increased by an amount
equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2001'
for `calendar year 1992' in subparagraph (B) thereof.

If any amount as increased under the preceding sentence is
not a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.
``(i) Regulations.--The Secretary shall prescribe such
regulations as may be appropriate to carry out this section
and section 137, including regulations which treat unmarried
individuals who pay or incur qualified adoption expenses with
respect to the same child as 1 taxpayer for purposes of
applying the dollar amounts in subsections (a)(3) and (b)(1)
of this section and in section 137(b)(1).
``(j) Applicability.--No credit shall be allowed under
subsection (a) for any taxable year in which a credit is
allowed under subpart C with respect to qualified adoption
expenses.''.
(B) Conforming amendments.--
(i) Section 24(b)(3)(B) is amended by inserting ``23,''
before ``25A(i),''.
(ii) Section 25(e)(1)(C) is amended--

(I) by inserting ``23,'' before ``25D'' in clause (i), and
(II) by inserting ``23,'' before ``24'' in clause (ii).

(iii) Section 25A(i)(5)(B) is amended by striking ``25D''
and inserting ``23, 25D,''.
(iv) Section 25B(g)(2) is amended by inserting ``23,''
before ``25A(i)''.
(v) Section 26(a)(1) is amended by inserting ``23,'' before
``24''.
(vi) Section 30(c)(2)(B)(ii) is amended by striking ``25D''
and inserting ``23, 25D,''.
(vii) Section 30B(g)(2)(B)(ii) is amended by inserting
``23,'' before ``25D''.
(viii) Section 30D(c)(2)(B)(ii) is amended by striking
``sections 25D and'' and inserting ``sections 23 and 25D''.
(ix) Section 137 is amended by adding at the end the
following new subsection:
``(g) Treatment of References to Section 36C.--For purposes
of this section, in the case of any taxable year with respect
to which no credit is allowable under subpart C with respect
to qualified adoption expenses, any reference to section 36C
shall be treated as a reference to section 23.''.
(x) Section 904(i) is amended by inserting ``23,'' before
``24''.
(xi) Section 1016(a)(26) is amended by striking ``36C(g)''
and inserting ``23(g), 36C(g),''.
(xii) Section 1400C(d)(2) is amended by inserting ``23,''
before ``24''.
(xiii) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 22 the following new item:

``Sec. 23. Adoption expenses.''.
(C) Effective date.--The amendments made by this paragraph
shall take effect on the date of the enactment of this Act.

SEC. 107. REPEAL OF SUNSET ON EMPLOYER-PROVIDED CHILD CARE
CREDIT.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 205 of such Act
(relating to allowance of credit for employer expenses for
child care assistance).

SEC. 108. REPEAL OF SUNSET ON EXPANSION OF EARNED INCOME TAX
CREDIT.

(a) Repeal of EGTRRA Sunset.--Title IX of the Economic
Growth and Tax Relief Reconciliation Act of 2001 (relating to
sunset of provisions of such Act) shall not apply to
subsections (b) through (h) of section 303 of such Act
(relating to earned income tax credit).
(b) Increase in Credit Percentage for Families With 3 or
More Children.--Paragraph (1) of section 32(b) is amended by
striking subparagraphs (B) and (C) and inserting the
following new subparagraph:
``(B) Increased credit percentage for families with 3 or
more qualifying children.--In the case of an eligible
individual with 3 or more qualifying children, the table in
subparagraph (A) shall be applied by substituting `45' for
`40' in the second column thereof.''.
(c) Joint Returns.--
(1) In general.--Subparagraph (B) of section 32(b)(2) is
amended by striking ``increased by'' and all that follows and
inserting ``increased by $5,000.''
(2) Inflation adjustments.--Clause (ii) of section
32(j)(1)(B) is amended--
(A) by striking ``$3,000'' and inserting ``$5,000'', and
(B) by striking ``calendar year 2007'' and inserting
``calendar year 2008''.
(d) Conforming Amendment.--Section 32(b) is amended by
striking paragraph (3).
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.

[[Page S8406]]

TITLE II--PERMANENT EDUCATION TAX RELIEF

SEC. 201. REPEAL OF SUNSET ON EDUCATION INDIVIDUAL RETIREMENT
ACCOUNTS.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 401 of such Act
(relating to modifications to education individual retirement
accounts).

SEC. 202. REPEAL OF SUNSET ON EMPLOYER-PROVIDED EDUCATIONAL
ASSISTANCE.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 411 of such Act
(relating to extension of exclusion for employer-provided
educational assistance).

SEC. 203. REPEAL OF SUNSET ON STUDENT LOAN INTEREST
DEDUCTION.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 412 of such Act
(relating to elimination of 60-month limit and increase in
income limitation on student loan interest deduction).

SEC. 204. REPEAL OF SUNSET ON EXCLUSION OF CERTAIN
SCHOLARSHIPS.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 413 of such Act
(relating to exclusion of certain amounts received under the
National Health Service Corps Scholarship Program and the F.
Edward Hebert Armed Forces Health Professions Scholarship and
Financial Assistance Program).

SEC. 205. REPEAL OF SUNSET ON ARBITRAGE REBATE EXCEPTION FOR
GOVERNMENTAL BONDS.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 421 of such Act
(relating to additional increase in arbitrage rebate
exception for governmental bonds used to finance educational
facilities).

SEC. 206. REPEAL OF SUNSET ON TREATMENT OF QUALIFIED PUBLIC
EDUCATIONAL FACILITY BONDS.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 422 of such Act
(relating to treatment of qualified public educational
facility bonds as exempt facility bonds.

SEC. 207. REPEAL OF SUNSET ON AMERICAN OPPORTUNITY TAX
CREDIT.

(a) Permanent Extension of Credit.--Section 25A is
amended--
(1) by striking ``$1,000'' each place it appears in
subsection (b)(1) and inserting ``$2,000'',
(2) by striking ``50 percent'' in subsection (b)(1)(B) and
inserting ``25 percent'',
(3) by striking ``2 taxable years'' in the heading of
subparagraph (A) of subsection (b)(2) and inserting ``4
taxable years'',
(4) by striking ``2 prior taxable years'' in subsection
(b)(2)(A) and inserting ``4 prior taxable years'',
(5) by striking ``2 years'' in the heading of subparagraph
(C) of subsection (b)(2) and inserting ``4 years'',
(6) by striking ``first 2 years'' in subsection (b)(2)(C)
and inserting ``first 4 years'',
(7) by striking ``tuition and fees'' in subparagraph (A) of
subsection (f)(1) and inserting ``tuition, fees, and course
materials'',
(8) by striking paragraphs (1) and (2) of subsection (d)
and inserting the following new paragraphs:
``(1) American opportunity credit.--The amount which would
(but for this paragraph) be taken into account under
paragraph (1) of subsection (a) for the taxable year shall be
reduced (but not below zero) by the amount which bears the
same ratio to the amount which would be so taken into account
as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for
such taxable year, over
``(ii) $80,000 ($160,000 in the case of a joint return),
bears to
``(B) $10,000 ($20,000 in the case of a joint return).
``(2) Lifetime learning credit.--The amount which would
(but for this paragraph) be taken into account under
paragraph (2) of subsection (a) for the taxable year shall be
reduced (but not below zero) by the amount which bears the
same ratio to the amount which would be so taken into account
as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for
such taxable year, over
``(ii) $40,000 ($80,000 in the case of a joint return),
bears to
``(B) $10,000 ($20,000 in the case of a joint return).'',
(9) by striking ``Dollar limitation on amount of credit''
in the heading of paragraph (1) of subsection (h) and
inserting ``American opportunity credit'',
(10) by striking ``2001'' in subsection (h)(1)(A) and
inserting ``2011'',
(11) by striking ``the $1,000 amounts under subsection
(b)(1)'' in subsection (h)(1)(A) and inserting ``the dollar
amounts under subsections (b)(1) and (d)(1)'',
(12) by striking ``calendar year 2000'' in subsection
(h)(1)(A)(ii) and inserting ``calendar year 2010'',
(13) by striking ``If any amount'' and all that follows in
subparagraph (B) of subsection (h)(1) and inserting ``If any
amount under subsection (b)(1) as adjusted under subparagraph
(A) is not a multiple of $100, such amount shall be rounded
to the next lowest multiple of $100. If any amount under
subsection (d)(1) as adjusted under subparagraph (A) is not a
multiple of $1,000, such amount shall be rounded to the next
lowest multiple of $1,000.'',
(14) by inserting ``of lifetime learning credit'' after
``Income limits'' in the heading of paragraph (2) of
subsection (h),
(15) by adding at the end of subsection (b) the following
new paragraphs:
``(4) Credit allowed against alternative minimum tax.--In
the case of a taxable year to which section 26(a)(2) does not
apply, so much of the credit allowed under subsection (a) as
is attributable to the American Opportunity Credit shall not
exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this subsection and sections 25D, 30, 30B, and
30D) and section 27 for the taxable year.
Any reference in this section or section 24, 25, 25B, 26,
904, or 1400C to a credit allowable under this subsection
shall be treated as a reference to so much of the credit
allowable under subsection (a) as is attributable to the
American Opportunity Credit.
``(5) Portion of credit made refundable.--40 percent of so
much of the credit allowed under subsection (a) as is
attributable to the American Opportunity Credit (determined
after the application of subsection (d)(1) and without regard
to this paragraph and section 26(a)(2) or paragraph (4), as
the case may be) shall be treated as a credit allowable under
subpart C (and not allowed under subsection (a)). The
preceding sentence shall not apply to any taxpayer for any
taxable year if such taxpayer is a child to whom subsection
(g) of section 1 applies for such taxable year.'', and
(16) by striking subsection (i) and redesignating
subsection (j) as subsection (i).
(b) Hope Scholarship Credit Renamed American Opportunity
Credit.--
(1) In general.--Section 25A, as amended by subsection (a),
is amended by striking ``Hope Scholarship'' each place it
appears in the text and in the headings and inserting
``American Opportunity''.
(2) Conforming amendments.--
(A) The heading for section 25A is amendment by striking
``HOPE'' and inserting ``AMERICAN OPPORTUNITY''.
(B) The heading for clause (v) of section 529(c)(3)(B) is
amended by striking ``Hope'' and inserting ``American
opportunity''.
(C) The heading for subparagraph (C) of section 530(d)(2)
is amended by striking ``Hope'' and inserting ``American
opportunity''.
(D) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by striking ``Hope'' and inserting ``American
Opportunity''.
(c) Conforming Amendments.--
(1) Section 24(b)(3)(B) is amended by striking ``25A(i)''
and inserting ``25A(b)''.
(2) Section 25(e)(1)(C)(ii) is amended by striking
``25A(i)'' and inserting ``25A(b)''.
(3) Section 26(a)(1) is amended by striking ``25A(i)'' and
inserting ``25A(b)''.
(4) Section 25B(g)(2) is amended by striking ``25A(i)'' and
inserting ``25A(b)''.
(5) Section 904(i) is amended by striking ``25A(i)'' and
inserting ``25A(b)''.
(6) Section 1400C(d)(2) is amended by striking ``25A(i)''
and inserting ``25A(b)''.
(7) Section 6211(b)(4)(A) is amended by striking ``25A by
reason of subsection (i)(6) thereof'' and inserting ``25A by
reason of subsection (b)(5) thereof''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.
(e) Treatment of Possessions.--Section 1004(c)(1) of the
American Recovery and Reinvestment Tax Act of 2009 is amended
by striking ``in 2009 and 2010'' each place it appears and
inserting ``after 2008''.

SEC. 208. REPEAL OF SUNSET ON ALLOWANCE OF COMPUTER
TECHNOLOGY AND EQUIPMENT AS A QUALIFIED HIGHER
EDUCATION EXPENSE FOR SECTION 529 ACCOUNTS.

(a) In General.--Clause (iii) of section 529(e)(3)(A) is
amended by striking ``in 2009 or 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to expenses paid or incurred after December 31,
2010.

TITLE III--PERMANENT ESTATE TAX RELIEF

SEC. 301. REPEAL OF EGTRRA SUNSET.

Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall not apply to title V of such
Act.

SEC. 302. REINSTATEMENT OF ESTATE TAX; REPEAL OF CARRYOVER
BASIS.

(a) In General.--Each provision of law amended by subtitle
A or E of title V of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended to read as such
provision would read if such subtitle had never been enacted.
(b) Conforming Amendment.--On and after the date of the
introduction of this Act, paragraph (1) of section 2505(a) of
the Internal Revenue Code of 1986 is amended to read as if
such paragraph would read if section 521(b)(2) of the
Economic Growth and Tax Relief Reconciliation Act of 2001 had
never been enacted.
(c) Special Election With Respect to Estates of Decedents
Dying Before Date of Enactment.--Notwithstanding subsection
(a), in the case of an estate of a decedent

[[Page S8407]]

dying after December 31, 2009, and before the date of the
enactment of this Act, the executor (within the meaning of
section 2203 of the Internal Revenue Code of 1986) may elect
to apply such Code as though the amendments made by this
section do not apply with respect to such estate and with
respect to property acquired or passing from such decedent
(within the meaning of section 1014(b) of such Code).   Such
election shall be made at such time and in such manner as the
Secretary of the Treasury or the Secretary's delegate shall
provide. Such an election once made shall be revocable only
with the consent of the Secretary of the Treasury or the
Secretary's delegate.
(d) Extension of Time for Performing Certain Acts.--
(1) Estate tax.--In the case of the estate of a decedent
dying after December 31, 2009, and before the date of the
enactment of this Act, the due date for--
(A) filing any return under section 6018 of the Internal
Revenue Code of 1986 (including any election required to be
made on such a return) as such section is in effect after the
date of the enactment of this Act without regard to any
election under subsection (c),
(B) making any payment of tax under chapter 11 of such
Code, and
(C) receiving any disclaimer described in section 2518(b)
of such Code,
shall not be earlier than the date which is 4 months after
the date of the enactment of this Act.
(2) Generation-skipping tax.--In the case of any
generation-skipping tax made after December 31, 2009, and
before the date of the enactment of this Act, the due date
for filing any return under section 2662 of the Internal
Revenue Code of 1986 (including any election required to be
made on such a return) shall not be earlier than the date
which is 4 months after the date of the enactment of this
Act.
(e) Effective Date.--Except as otherwise provided in this
section, the amendments made by this section shall apply to
estates of decedents dying, and transfers, after December 31,
2009.

SEC. 303. MODIFICATIONS TO ESTATE, GIFT, AND GENERATION-
SKIPPING TRANSFER TAXES.

(a) Modifications to Estate Tax.--
(1) $3,500,000 applicable exclusion amount.--Subsection (c)
of section 2010 is amended to read as follows:
``(c) Applicable Credit Amount.--
``(1) In general.--For purposes of this section, the
applicable credit amount is the amount of the tentative tax
which would be determined under section 2001(c) if the amount
with respect to which such tentative tax is to be computed
were equal to the applicable exclusion amount.
``(2) Applicable exclusion amount.--
``(A) In general.--For purposes of this subsection, the
applicable exclusion amount is $3,500,000.
``(B) Inflation adjustment.--In the case of any decedent
dying in a calendar year after 2010, the dollar amount in
subparagraph (A) shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year by substituting
`calendar year 2009' for `calendar year 1992' in subparagraph
(B) thereof.

If any amount as adjusted under the preceding sentence is not
a multiple of $10,000, such amount shall be rounded to the
nearest multiple of $10,000.''.
(2) Maximum estate tax rate equal to 45 percent.--
Subsection (c) of section 2001 is amended--
(A) by striking ``but not over $2,000,000'' in the table
contained in paragraph (1),
(B) by striking the last 2 items in such table,
(C) by striking ``(1) In general.--'', and
(D) by striking paragraph (2).
(b) Modifications to Gift Tax.--
(1) Inflation adjustment for applicable exclusion amount
for gift tax.--Section 2505 is amended by adding at the end
the following new subsection:
``(d) Inflation Adjustment.--In the case of any calendar
year after 2010, the dollar amount in subsection (a)(1) shall
be increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year by substituting
`calendar year 2009' for `calendar year 1992' in subparagraph
(B) thereof.

If any amount as adjusted under the preceding sentence is not
a multiple of $10,000, such amount shall be rounded to the
nearest multiple of $10,000.''.
(2) Modification of gift tax rate.--On and after the date
of the introduction of this Act, subsection (a) of section
2502 of the Internal Revenue Code of 1986 is amended to read
as such subsection would read if section 511(d) of the
Economic Growth and Tax Relief Reconciliation Act of 2001 had
never been enacted.
(3) Conforming amendment.--Section 2511 of the Internal
Revenue Code of 1986 is amended by striking subsection (c).
(4) Period of repeal treated as separate calendar year.--
(A) In general.--For purposes of applying sections 1015,
2502, and 2505 of the Internal Revenue Code of 1986, calendar
year 2010 shall be treated as 2 separate calendar years one
of which ends on the day before the date of the introduction
of this Act and the other of which begins on such date of
introduction.
(B) Application of section 2504(b).--For purposes of
applying section 2504(b) of the Internal Revenue Code of
1986, calendar year 2010 shall be treated as one preceding
calendar period.
(c) Modification of Generation-skipping Transfer Tax.--In
the case of any generation-skipping transfer made after
December 31, 2009, and before the date of the introduction of
this Act, the applicable rate determined under section
2641(a) of the Internal Revenue Code of 1986 shall be zero.
(d) Modifications of Estate and Gift Taxes To Reflect
Differences in Credit Resulting From Different Tax Rates.--
(1) Estate tax.--
(A) In general.--Section 2001(b)(2) is amended by striking
``if the provisions of subsection (c) (as in effect at the
decedent's death)'' and inserting ``if the modifications
described in subsection (g)''.
(B) Modifications.--Section 2001 is amended by adding at
the end the following new subsection:
``(g) Modifications to Gift Tax Payable To Reflect
Different Tax Rates.--For purposes of applying subsection
(b)(2) with respect to 1 or more gifts, the rates of tax
under subsection (c) in effect at the decedent's death shall,
in lieu of the rates of tax in effect at the time of such
gifts, be used both to compute--
``(1) the tax imposed by chapter 12 with respect to such
gifts, and
``(2) the credit allowed against such tax under section
2505, including in computing--
``(A) the applicable credit amount under section
2505(a)(1), and
``(B) the sum of the amounts allowed as a credit for all
preceding periods under section 2505(a)(2).''.
(2) Gift tax.--Section 2505(a) is amended by adding at the
end the following new flush sentence:

``For purposes of applying paragraph (2) for any calendar
year, the rates of tax in effect under section 2502(a)(2) for
such calendar year shall, in lieu of the rates of tax in
effect for preceding calendar periods, be used in determining
the amounts allowable as a credit under this section for all
preceding calendar periods.''.
(e) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to estates of
decedents dying, generation-skipping transfers, and gifts
made, after December 31, 2009.

SEC. 304. APPLICABLE EXCLUSION AMOUNT INCREASED BY UNUSED
EXCLUSION AMOUNT OF DECEASED SPOUSE.

(a) In General.--Section 2010(c), as amended by section
303(a), is amended by striking paragraph (2) and inserting
the following new paragraphs:
``(2) Applicable exclusion amount.--For purposes of this
subsection, the applicable exclusion amount is the sum of--
``(A) the basic exclusion amount, and
``(B) in the case of a surviving spouse, the deceased
spousal unused exclusion amount.
``(3) Basic exclusion amount.--
``(A) In general.--For purposes of this subsection, the
basic exclusion amount is $3,500,000.
``(B) Inflation adjustment.--In the case of any decedent
dying in a calendar year after 2010, the dollar amount in
subparagraph (A) shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year by substituting
`calendar year 2009' for `calendar year 1992' in subparagraph
(B) thereof.

If any amount as adjusted under the preceding sentence is not
a multiple of $10,000, such amount shall be rounded to the
nearest multiple of $10,000.
``(4) Deceased spousal unused exclusion amount.--For
purposes of this subsection, with respect to a surviving
spouse of a deceased spouse dying on or after the date of the
enactment of theMiddle Class Tax Cut Act of 2010, the term
`deceased spousal unused exclusion amount' means the lesser
of--
``(A) the basic exclusion amount, or
``(B) the excess of--
``(i) the basic exclusion amount of the last such deceased
spouse of such surviving spouse, over
``(ii) the amount with respect to which the tentative tax
is determined under section 2001(b)(1) on the estate of such
deceased spouse.
``(5) Special rules.--
``(A) Election required.--A deceased spousal unused
exclusion amount may not be taken into account by a surviving
spouse under paragraph (2) unless the executor of the estate
of the deceased spouse files an estate tax return on which
such amount is computed and makes an election on such return
that such amount may be so taken into account. Such election,
once made, shall be irrevocable. No election may be made
under this subparagraph if such return is filed after the
time prescribed by law (including extensions) for filing such
return.
``(B) Examination of prior returns after expiration of
period of limitations with respect to deceased spousal unused
exclusion amount.--Notwithstanding any period of limitation
in section 6501, after the time has expired under section
6501 within which a tax may be assessed under chapter 11 or
12 with respect to a deceased spousal unused exclusion
amount, the Secretary may

[[Page S8408]]

examine a return of the deceased spouse to make
determinations with respect to such amount for purposes of
carrying out this subsection.
``(6) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
this subsection.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 2505(a) is amended to read as
follows:
``(1) the applicable credit amount in effect under section
2010(c) (determined as if the applicable exclusion amount
were $1,000,000) which would apply if the donor died as of
the end of the calendar year, reduced by''.
(2) Section 2631(c) is amended by striking ``the applicable
exclusion amount'' and inserting ``the basic exclusion
amount''.
(3) Section 6018(a)(1) is amended by striking ``applicable
exclusion amount'' and inserting ``basic exclusion amount''.
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying, generation-
skipping transfers, and gifts made, on and after the date of
the enactment of this Act.

SEC. 305. EXCLUSION FROM GROSS ESTATE OF CERTAIN FARMLAND SO
LONG AS FARMLAND USE BY FAMILY CONTINUES.

(a) In General.--Part III of subchapter A of chapter 11 is
amended by inserting after section 2033 the following new
section:

``SEC. 2033A. EXCLUSION OF CERTAIN FARMLAND SO LONG AS
FARMLAND USE BY FAMILY CONTINUES.

``(a) In General.--In the case of an estate of a decedent
to which this section applies, the value of the gross estate
shall not include the adjusted value of qualified farmland
included in the estate.
``(b) Estates to Which Section Applies.--This section shall
apply to an estate if--
``(1) the executor--
``(A) elects the application of this section,
``(B) files an agreement referred to in section
2032A(d)(2), and
``(C) obtains a qualified appraisal (as defined in section
170(f)(11)(E)(i)) of the qualified farmland to which the
election applies and attaches such appraisal to the return of
the tax imposed by section 2001,
``(2) the decedent was (at the date of the decedent's
death) a citizen or resident of the United States,
``(3) the decedent for the 3-taxable-year period (10-
taxable-year period in the case of any qualified farmland
which is qualified woodland described in section
2032A(c)(2)(F)(i)) preceding the date of the decedent's death
had an average modified adjusted gross income (as defined in
section 86(b)(2)) not exceeding $750,000,
``(4) 60 percent or more of the adjusted value of the gross
estate at the date of the decedent's death consists of the
adjusted value of real or personal property which is used as
a farm for farming purposes (within the meaning of section
2032A(e)),
``(5) 50 percent or more of the adjusted value of the gross
estate consists of the adjusted value of qualified farmland
which is real property, and
``(6) during the 10-year period ending on the date of the
decedent's death--
``(A) the qualified farmland which is such real property
was owned by the decedent or a member of the decedent's
family, and
``(B) there was material participation (within the meaning
of section 469(h)) by the decedent or a member of the
decedent's family in the operation of such farmland.
``(c) Definitions.--For purposes of this section--
``(1) Qualified farmland.--The term `qualified farmland'
means any real property--
``(A) which is located in the United States,
``(B) which is used as a farm for farming purposes (within
the meaning of section 2032A(e)),
``(C) such use of which is not an activity not engaged in
for profit (within the meaning of section 183),
``(D) which was acquired from or passed from the decedent
to a qualified heir of the decedent and which, on the date of
the decedent's death, was being so used by the decedent or a
member of the decedent's family, and
``(E) which is property designated in the agreement filed
under subsection (b)(1).
``(2) Adjusted value.--The term `adjusted value' means the
value of farmland for purposes of this chapter (determined
without regard to this section), reduced by any amounts
allowable as a deduction in respect to such farmland under
paragraph (3) or (4) of section 2053(a).
``(3) Other terms.--Any other term used in this section
which is also used in section 2032A shall have the same
meaning given such term by section 2032A.
``(d) Annual Information Return to the Secretary.--
``(1) In general.--The qualified heir of any qualified
farmland shall file an information return (at such time and
in such form and manner as the Secretary prescribes) for each
calendar year.
``(2) Contents of return.--The information return required
under paragraph (1) shall set forth any disposition of any
interest in such farmland or any cessation of use of such
farmland as a farm for farming purposes and such other
information as the Secretary may require.
``(e) Imposition of Recapture Tax.--
``(1) In general.--If--
``(A) at any time after the decedent's death and before the
death of the qualified heir--
``(i) the qualified heir disposes of any interest in
qualified farmland (other than by a disposition to a member
of the qualified heir's family),
``(ii) the qualified heir or member ceases to use the
qualified farmland as a farm for farming purposes,
``(iii) the qualified heir or member incurs a nonrecourse
indebtedness secured in whole or in part by a portion of the
qualified farmland, or
``(iv) the qualified heir or member fails to file the
information return with respect to the qualified farmland
required under subsection (d) for 3 successive calendar
years, or
``(B) upon the death of the qualified heir or member, the
executor of the estate of such heir or member does not elect
the application of this section with respect to the qualified
farmland,

then, there is hereby imposed a recapture tax with respect to
such qualified farmland or such interest in or portion of
such qualified farmland.
``(2) Application of recapture tax to earlier
generations.--Upon the imposition of a recapture tax under
paragraph (1) with respect to such qualified farmland or such
interest in or portion of such qualified farmland, there is
also imposed an aggregate amount of any recapture tax which
would have been determined under this subsection with respect
to such farmland, interest, or portion if the such tax had
been imposed and paid on the date of death of the decedent
and on the date of death of any qualified heir (or member) of
such farmland, interest, or portion in any intervening
generation.
``(3) Amount of recapture tax, etc.--
``(A) In general.--Except as provided in subparagraph (B),
rules similar to the rules of section 2032A(c) (other than
paragraphs (1) and (2)(E) thereof) with respect to the
additional estate tax shall apply for purposes of this
subsection with respect to each recapture tax.
``(B) Adjustments to recapture tax.--
``(i) Adjustment to reflect increase in value of
interest.--Subject to clause (ii), the amount of the
recapture tax otherwise determined under rules described in
subparagraph (A) shall be increased by the percentage (if
any) by which the value of the interest in the qualified
farmland at the time of the imposition of such tax is greater
than the adjusted value of such farmland at the time such
farmland would have been included in the estate if no
election under this section had been made.
``(ii) Adjustments to value of interest at time of tax
imposition.--For purposes of determining the value of the
interest in the qualified farmland at the time of the
imposition of such tax, such value shall be reduced (under
rules prescribed by the Secretary) by--

``(I) the basis of any substantial improvements made with
respect to such interest by the qualified heir or member, and
``(II) the aggregate amount of any recapture tax imposed
under paragraph (2).

``(f) Application of Other Rules.--Rules similar to the
rules of subsections (d), (e) (other than paragraphs (6) and
(13) thereof), (f), (g), (h), and (i) of section 2032A shall
apply for purposes of this section.
``(g) Regulations.--The Secretary may issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section,
including the application of this section in the case of
multiple interests in qualified farmland, and to prevent
fraud and abuse under this section.''.
(b) Basis of Qualified Farmland for Purposes of
Depreciation or Depletion by Qualified Heir.--Section 1014 is
amended by adding at the end the following new subsection:
``(f) Basis of Qualified Farmland for Purposes of
Depreciation or Depletion by Qualified Heir.--For purposes of
the allowance to any qualified heir of any depreciation or
depletion deduction with respect to any interest in property
acquired from a decedent and subject to an election under
section 2033A, the basis of such property in the hands of
such qualified heir (or member of the qualified heir's family
after a disposition described in section 2033A(e)(1)(A)(i))
shall be the adjusted basis of such property in the hands of
the decedent immediately before the death of such
decedent.''.
(c) Penalty for Failure to File Annual Information
Return.--Section 6652 is amended by redesignating subsection
(m) as subsection (n) and by adding at the end the following
new subsection:
``(m) Failure to File Annual Information Return.--In the
case of each failure to provide an information return as
required under section 2033A(d) at the time prescribed
therefor, unless it is shown that such failure is due to
reasonable cause and not to willful neglect, there shall be
paid, on notice and demand of the Secretary and in the same
manner as tax, by the person failing to provide such return,
an amount equal to $250 for each such failure.''.
(d) Woodlands Subject to Management Plan.--Paragraph (2) of
section 2032A(c) is amended by adding at the end the
following new subparagraph:
``(F) Exception for woodlands subject to forest stewardship
plan.--
``(i) In general.--Subparagraph (E) shall not apply to any
disposition or severance of standing timber on a qualified
woodland that is made pursuant to a forest stewardship plan
developed under the Cooperative Forestry Assistance Act of
1978 (16 U.S.C. 2103a)

[[Page S8409]]

or an equivalent plan approved by the State Forester.
``(ii) Compliance with forest stewardship plan.--Clause (i)
shall not apply if, during the 10-year period under paragraph
(1), the qualified heir fails to comply with such forest
stewardship plan or equivalent plan.''.
(e) Certain Conservation Transactions Not Treated as
Dispositions.--Paragraph (8) of section 2032A(c) is amended
to read as follows:
``(8) Certain conservation transactions not treated as
dispositions.--
``(A) Qualified conservation contributions.--A qualified
conservation contribution by gift or otherwise shall not be
deemed a disposition under subsection (c)(1)(A).
``(B) Qualified conservation easement sold to qualified
organization.--A sale of a qualified conservation easement to
a qualified organization shall not be deemed a disposition
under subsection (c)(1)(A).
``(C) Definitions.--For purposes of this paragraph--
``(i) the terms `qualified conservation contribution' and
`qualified organization' have the meanings given such terms
by section 170(h), and
``(ii) the term `qualified conservation easement' has the
meaning given such term by section 2031(c)(8).''.
(f) Clerical Amendment.--The table of sections for part III
of subchapter A of chapter 11 is amended by inserting after
the item relating to section 2033 the following new item:

``Sec. 2033A. Exclusion of certain farmland so long as use as farmland
continues.''.
(g) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying after the date of
the enactment of this Act.

SEC. 306. INCREASE IN LIMITATIONS ON THE AMOUNT EXCLUDED FROM
THE GROSS ESTATE WITH RESPECT TO LAND SUBJECT
TO A QUALIFIED CONSERVATION EASEMENT.

(a) Increase in Dollar Limitation on Exclusion.--Paragraph
(3) of section 2031(c) is amended by striking ``the exclusion
limitation is'' and all that follows and inserting ``the
exclusion limitation is $5,000,000.''.
(b) Increase in Percentage of Value of Land Which Is
Excludable.--Paragraph (2) of section 2031(c) is amended--
(1) by striking ``40 percent'' and inserting ``50
percent'', and
(2) by striking ``2 percentage points'' and inserting ``2.5
percentage points''.
(c) Effective Date.--The amendments made by this section
shall apply to the estates of decedents dying after the date
of the enactment of this Act.

SEC. 307. MODIFICATION OF RULES FOR VALUE OF CERTAIN FARM,
ETC., REAL PROPERTY.

(a) In General.--Paragraph (2) of section 2032A(a) is
amended by striking ``$750,000'' and inserting
``$3,500,000''.
(b) Inflation Adjustment.--Paragraph (3) of section
2032A(a) is amended--
(1) by striking ``1998'' and inserting ``2010'',
(2) by striking ``$750,000'' and inserting ``$3,500,000''
in subparagraph (A), and
(3) by striking ``calendar year 1997'' and inserting
``calendar year 2009'' in subparagraph (B).
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying, and gifts made,
after December 31, 2009.

SEC. 308. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR GRANTOR
RETAINED ANNUITY TRUSTS.

(a) In General.--Subsection (b) of section 2702 is
amended--
(1) by redesignating paragraphs (1), (2), and (3) as
subparagraphs (A), (B), and (C), respectively, and by moving
such subparagraphs (as so redesignated) 2 ems to the right;
(2) by striking ``For purposes of'' and inserting the
following:
``(1) In general.--For purposes of'';
(3) by striking ``paragraph (1) or (2)'' in paragraph
(1)(C) (as so redesignated) and inserting ``subparagraph (A)
or (B)''; and
(4) by adding at the end the following new paragraph:
``(2) Additional requirements with respect to grantor
retained annuities.--For purposes of subsection (a), in the
case of an interest described in paragraph (1)(A) (determined
without regard to this paragraph) which is retained by the
transferor, such interest shall be treated as described in
such paragraph only if--
``(A) the right to receive the fixed amounts referred to in
such paragraph is for a term of not less than 10 years,
``(B) such fixed amounts, when determined on an annual
basis, do not decrease relative to any prior year during the
first 10 years of the term referred to in subparagraph (A),
and
``(C) the remainder interest has a value greater than zero
determined as of the time of the transfer.''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers made after the date of the enactment
of this Act.

SEC. 309. CONSISTENT BASIS REPORTING BETWEEN ESTATE AND
PERSON ACQUIRING PROPERTY FROM DECEDENT.

(a) Consistent Use of Basis.--
(1) Property acquired from a decedent.--Section 1014 is
amended by adding at the end the following new subsection:
``(f) Basis Must Be Consistent With Estate Tax Value.--
``(1) In general.--For purposes of this section, the value
used to determine the basis of any interest in property in
the hands of the person acquiring such property shall not
exceed the value of such interest as finally determined for
purposes of chapter 11.
``(2) Special rule where no final determination.--In any
case in which the value of property has not been finally
determined under chapter 11 and there has been a statement
furnished under section 6035(a), the value used to determine
the basis of any interest in property in the hands of the
person acquiring such property shall not exceed the amount
reported on the statement furnished under section 6035(a).
``(3) Regulations.--The Secretary may by regulations
provide exceptions to the application of this subsection.''.
(2) Property acquired by gifts and transfers in trust.--
Section 1015 is amended by adding at the end the following
new subsection:
``(f) Basis Must Be Consistent With Gift Tax Value.--
``(1) In general.--For purposes of this section, the fair
market value of any interest in property at the time of the
gift of that interest shall not exceed the value of such
interest as finally determined for purposes of chapter 12.
``(2) Special rule where no final determination.--In any
case in which the value of property has not been finally
determined under chapter 12 and there has been a statement
furnished under section 6035(b), the fair market value of any
interest in property at the time of the gift of that interest
shall not exceed the amount reported on the statement
furnished under section 6035(b).
``(3) Regulations.--The Secretary may by regulations
provide exceptions to the application of this subsection.''.
(b) Information Reporting.--
(1) In general.--Subpart A of part III of subchapter A of
chapter 61 is amended by inserting after section 6034A the
following new section:

``SEC. 6035. BASIS INFORMATION TO PERSONS ACQUIRING PROPERTY
FROM DECEDENT OR BY GIFT.

``(a) Information With Respect to Property Acquired From
Decedents.--
``(1) In general.--The executor of any estate required to
file a return under section 6018(a) shall furnish to the
Secretary and to each person acquiring any interest in
property included in the decedent's gross estate for Federal
estate tax purposes a statement identifying the value of each
interest in such property as reported on such return and such
other information with respect to such interest as the
Secretary may prescribe.
``(2) Statements by beneficiaries.--Each person required to
file a return under section 6018(b) shall furnish to the
Secretary and to each other person who holds a legal or
beneficial interest in the property to which such return
relates a statement identifying the information described in
paragraph (1).
``(3) Time for furnishing statement.--
``(A) In general.--Each statement required to be furnished
under paragraph (1) or (2) shall be furnished at such time as
the Secretary may prescribe, but in no case at a time later
than the earlier of--
``(i) the date which is 30 days after the date on which the
return under section 6018 was required to be filed (including
extensions, if any), or
``(ii) the date which is 30 days after the date such return
is filed.
``(B) Adjustments.--In any case in which there is an
adjustment to the information required to be included on a
statement filed under paragraph (1) or (2) after such
statement has been filed, a supplemental statement under such
paragraph shall be filed not later than the date which is 30
days after such adjustment is made.
``(b) Information With Respect to Property Acquired by
Gift.--
``(1) In general.--Each person making a transfer by gift
who is required to file a return under section 6019 with
respect to such transfer shall furnish to the Secretary and
to each person acquiring any interest in property by reason
of such transfer a statement identifying the fair market
value of each interest in such property as reported on such
return and such other information with respect to such
interest as the Secretary may prescribe.
``(2) Time for furnishing statement.--
``(A) In general.--Each statement required to be furnished
under paragraph (1) shall be furnished at such time as the
Secretary may prescribe, but in no case at a time later than
the earlier of--
``(i) the date which is 30 days after the date on which the
return under section 6019 was required to be filed (including
extensions, if any), or
``(ii) the date which is 30 days after the date such return
is filed.
``(B) Adjustments.--In any case in which there is an
adjustment to the information required to be included on a
statement filed under paragraph (1) after such statement has
been filed, a supplemental statement under such paragraph
shall be filed not later than the date which is 30 days after
such adjustment is made.
``(c) Regulations.--The Secretary shall prescribe such
regulations as necessary to carry out this section, including
regulations relating to--
``(1) applying this section to property with regard to
which no estate or gift tax return is required to be filed,
and
``(2) situations in which the surviving joint tenant or
other recipient may have better information than the executor
regarding the basis or fair market value of the property.''.

[[Page S8410]]

(2) Penalty for failure to file.--
(A) Return.--Section 6724(d)(1) is amended by striking
``and'' at the end of subparagraph (B), by striking the
period at the end of subparagraph (C) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(D) any statement required to be filed with the Secretary
under section 6035.''.
(B) Statement.--Section 6724(d)(2) is amended by striking
``or'' at the end of subparagraph (GG), by striking the
period at the end of subparagraph (HH) and inserting ``,
or'', and by adding at the end the following new
subparagraph:
``(II) section 6035 (other than a statement described in
paragraph (1)(D)).''.
(3) Clerical amendment.--The table of sections for subpart
A of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6034A the
following new item:

``Sec. 6035. Basis information to persons acquiring property from
decedent or by gift.''.

(c) Penalty for Inconsistent Reporting.--
(1) In general.--Subsection (b) of section 6662 is amended
by inserting after paragraph (7) the following new paragraph:
``(8) Any inconsistent estate or gift basis.''.
(2) Inconsistent basis reporting.--Section 6662 is amended
by adding at the end the following new subsection:
``(k) Inconsistent Estate or Gift Basis Reporting.--For
purposes of this section, the term `inconsistent estate or
gift basis' means--
``(1) in the case of property acquired from a decedent, a
basis determination with respect to such property which is
not consistent with the requirements of section 1014(f), and
``(2) in the case of property acquired by gift, a basis
determination with respect to such property which is not
consistent with the requirements of section 1015(f).''.
(d) Effective Date.--The amendments made by this section
shall apply to transfers for which returns are filed after
the date of the enactment of this Act.

TITLE IV--PERMANENT SMALL BUSINESS TAX RELIEF

SEC. 401. REPEAL OF SUNSET ON INCREASED LIMITATIONS ON SMALL
BUSINESS EXPENSING.

(a) In General.--Subsection (b) of section 179, as amended
by the Small Business Jobs Act of 2010, is amended--
(1) by striking ``$25,000'' in paragraph (1)(C) and
inserting ``$125,000.'', and
(2) by striking ``$200,000'' in paragraph (2)(C) and
inserting ``$500,000.''.
(b) Inflation Adjustment.--Section 179(b) is amended by
adding at the end the following new paragraph:
``(6) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2011, the $125,000 amount in paragraph (1)(C)
and the $500,000 amount in paragraph (2)(C) shall each be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, by substituting `calendar year 2006' for
`calendar year 1992' in subparagraph (B) thereof.
``(B) Rounding.--
``(i) Dollar limitation.--If the amount in paragraph (1) as
increased under subparagraph (A) is not a multiple of $1,000,
such amount shall be rounded to the nearest multiple of
$1,000.
``(ii)  Phaseout amount.--If the amount in paragraph (2) as
increased under subparagraph (A) is not a multiple of
$10,000, such amount shall be rounded to the nearest multiple
of $10,000.''.
(c) Permanent Expensing of Computer Software.--Section
179(d)(1)(A)(ii), as amended by the Small Business Jobs Act
of 2010, is amended by striking ``and before 2012''.
(d) Revocation of Election Made Permanent.--Section
179(c)(2), as amended by the Small Business Jobs Act of 2010,
is amended to read as follows:
``(2) Revocation of election.--Any election made under this
section, and any specification contained in any such
election, may be revoked by the taxpayer with respect to any
property, and such revocation, once made, shall be
irrevocable.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2011.

TITLE V--ALTERNATIVE MINIMUM TAX RELIEF

SEC. 501. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX
EXEMPTION AMOUNT.

(a) In General.--Paragraph (1) of section 55(d) is
amended--
(1) by striking ``$70,950'' and all that follows through
``2009'' in subparagraph (A) and inserting ``$72,450 in the
case of taxable years beginning in 2010 and $74,450 in the
case of taxable years beginning in 2011'', and
(2) by striking ``$46,700'' and all that follows through
``2009'' in subparagraph (B) and inserting ``$47,450 in the
case of taxable years beginning in 2010 and $48,450 in the
case of taxable years beginning in 2011''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 502. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR
NONREFUNDABLE PERSONAL CREDITS.

(a) In General.--Paragraph (2) of section 26(a) is
amended--
(1) by striking ``or 2009'' and inserting ``2009, 2010, or
2011'', and
(2) by striking ``2009'' in the heading thereof and
inserting ``2011''.
(b)  Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

TITLE VI--TEMPORARY EXTENSION OF CERTAIN PROVISIONS EXPIRING IN 2009

Subtitle A--Infrastructure Incentives

SEC. 601. EXTENSION OF BUILD AMERICA BONDS.

(a) In General.--Subparagraph (B) of section 54AA(d)(1) is
amended by striking ``January 1, 2011'' and inserting
``January 1, 2012''.
(b) Extension of Payments to Issuers.--
(1) In general.--Section 6431 is amended--
(A) by striking ``January 1, 2011'' in subsection (a) and
inserting ``January 1, 2012''; and
(B) by striking ``January 1, 2011'' in subsection (f)(1)(B)
and inserting ``a particular date''.
(2) Conforming amendments.--Subsection (g) of section 54AA
is amended--
(A) by striking ``January 1, 2011'' and inserting ``January
1, 2012''; and
(B) by striking ``Qualified Bonds Issued Before 2011'' in
the heading and inserting ``Certain Qualified Bonds''.
(c) Reduction in Percentage of Payments to Issuers.--
Subsection (b) of section 6431 is amended--
(1) by striking ``The Secretary'' and inserting the
following:
``(1) In general.--The Secretary'';
(2) by striking ``35 percent'' and inserting ``the
applicable percentage''; and
(3) by adding at the end the following new paragraph:
``(2) Applicable percentage.--For purposes of this
subsection, the term `applicable percentage' means the
percentage determined in accordance with the following table:

------------------------------------------------------------------------
``In the case of a qualified bond issued     The applicable percentage
during calendar year:                         is:
------------------------------------------------------------------------
2009 or 2010..............................  35 percent
2011......................................  32 percent.''.
------------------------------------------------------------------------

(d) Current Refundings Permitted.--Subsection (g) of
section 54AA is amended by adding at the end the following
new paragraph:
``(3) Treatment of current refunding bonds.--
``(A) In general.--For purposes of this subsection, the
term `qualified bond' includes any bond (or series of bonds)
issued to refund a qualified bond if--
``(i) the average maturity date of the issue of which the
refunding bond is a part is not later than the average
maturity date of the bonds to be refunded by such issue,
``(ii) the amount of the refunding bond does not exceed the
outstanding amount of the refunded bond, and
``(iii) the refunded bond is redeemed not later than 90
days after the date of the issuance of the refunding bond.
``(B) Applicable percentage.--In the case of a refunding
bond referred to in subparagraph (A), the applicable
percentage with respect to such bond under section 6431(b)
shall be the lowest percentage specified in paragraph (2) of
such section.
``(C) Determination of average maturity.--For purposes of
subparagraph (A)(i), average maturity shall be determined in
accordance with section 147(b)(2)(A).''.

SEC. 602. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER SUPPLY
FACILITIES.

(a) Bonds for Water and Sewage Facilities Exempt From
Volume Cap on Private Activity Bonds.--
(1) In general.--Paragraph (3) of section 146(g) is amended
by inserting ``(4), (5),'' after ``(2),''.
(2) Conforming amendment.--Paragraphs (2) and (3)(B) of
section 146(k) are both amended by striking ``(4), (5),
(6),'' and inserting ``(6)''.
(b) Tax-exempt Issuance by Indian Tribal Governments.--
(1) In general.--Subsection (c) of section 7871 is amended
by adding at the end the following new paragraph:
``(4) Exception for bonds for water and sewage
facilities.--Paragraph (2) shall not apply to an exempt
facility bond 95 percent or more of the net proceeds (as
defined in section 150(a)(3)) of which are to be used to
provide facilities described in paragraph (4) or (5) of
section 142(a).''.
(2) Conforming amendment.--Paragraph (2) of section 7871(c)
is amended by striking ``paragraph (3)'' and inserting
``paragraphs (3) and (4)''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.

SEC. 603. EXTENSION OF EXEMPTION FROM ALTERNATIVE MINIMUM TAX
TREATMENT FOR CERTAIN TAX-EXEMPT BONDS.

(a) In General.--Clause (vi) of section 57(a)(5)(C) is
amended--
(1) by striking ``January 1, 2011'' in subclause (I) and
inserting ``January 1, 2012''; and
(2) by striking ``and 2010'' in the heading and inserting
``, 2010, and 2011''.
(b) Adjusted Current Earnings.--Clause (iv) of section
56(g)(4)(B) is amended--
(1) by striking ``January 1, 2011'' in subclause (I) and
inserting ``January 1, 2012''; and

[[Page S8411]]

(2) by striking ``and 2010'' in the heading and inserting
``, 2010, and 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2010.

SEC. 604. EXTENSION AND ADDITIONAL ALLOCATIONS OF RECOVERY
ZONE BOND AUTHORITY.

(a) Extension of Recovery Zone Bond Authority.--Section
1400U-2(b)(1) and section 1400U-3(b)(1)(B) are each amended
by striking ``January 1, 2011'' and inserting ``January 1,
2012''.
(b) Additional Allocations of Recovery Zone Bond Authority
Based on Unemployment.--Section 1400U-1 is amended by adding
at the end the following new subsection:
``(c) Allocation of 2010 Recovery Zone Bond Limitations
Based on Unemployment.--
``(1) In general.--The Secretary shall allocate the 2010
national recovery zone economic development bond limitation
and the 2010 national recovery zone facility bond limitation
among the States in the proportion that each such State's
2009 unemployment number bears to the aggregate of the 2009
unemployment numbers for all of the States.
``(2) Minimum allocation.--The Secretary shall adjust the
allocations under paragraph (1) for each State to the extent
necessary to ensure that no State (prior to any reduction
under paragraph (3)) receives less than 0.9 percent of the
2010 national recovery zone economic development bond
limitation and 0.9 percent of the 2010 national recovery zone
facility bond limitation.
``(3) Allocations by states.--
``(A) In general.--Each State with respect to which an
allocation is made under paragraph (1) shall reallocate such
allocation among the counties and large municipalities (as
defined in subsection (a)(3)(B)) in such State in the
proportion that each such county's or municipality's 2009
unemployment number bears to the aggregate of the 2009
unemployment numbers for all the counties and large
municipalities (as so defined) in such State.
``(B) 2010 allocation reduced by amount of previous
allocation.--Each State shall reduce (but not below zero)--
``(i) the amount of the 2010 national recovery zone
economic development bond limitation allocated to each county
or large municipality (as so defined) in such State by the
amount of the national recovery zone economic development
bond limitation allocated to such county or large
municipality under subsection (a)(3)(A) (determined without
regard to any waiver thereof), and
``(ii) the amount of the 2010 national recovery zone
facility bond limitation allocated to each county or large
municipality (as so defined) in such State by the amount of
the national recovery zone facility bond limitation allocated
to such county or large municipality under subsection
(a)(3)(A) (determined without regard to any waiver thereof).
``(C) Waiver of suballocations.--A county or municipality
may waive any portion of an allocation made under this
paragraph. A county or municipality shall be treated as
having waived any portion of an allocation made under this
paragraph which has not been allocated to a bond issued
before May 1, 2011. Any allocation waived (or treated as
waived) under this subparagraph may be used or reallocated by
the State.
``(D) Special rule for a municipality in a county.--In the
case of any large municipality any portion of which is in a
county, such portion shall be treated as part of such
municipality and not part of such county.
``(4) 2009 unemployment number.--For purposes of this
subsection, the term `2009 unemployment number' means, with
respect to any State, county or municipality, the number of
individuals in such State, county, or municipality who were
determined to be unemployed by the Bureau of Labor Statistics
for December 2009.
``(5) 2010 national limitations.--
``(A) Recovery zone economic development bonds.--The 2010
national recovery zone economic development bond limitation
is $10,000,000,000. Any allocation of such limitation under
this subsection shall be treated for purposes of section
1400U-2 in the same manner as an allocation of national
recovery zone economic development bond limitation.
``(B) Recovery zone facility bonds.--The 2010 national
recovery zone facility bond limitation is $15,000,000,000.
Any allocation of such limitation under this subsection shall
be treated for purposes of section 1400U-3 in the same manner
as an allocation of national recovery zone facility bond
limitation.''.
(c) Authority of State to Waive Certain 2009 Allocations.--
Subparagraph (A) of section 1400U-1(a)(3) is amended by
adding at the end the following: ``A county or municipality
shall be treated as having waived any portion of an
allocation made under this subparagraph which has not been
allocated to a bond issued before May 1, 2011. Any allocation
waived (or treated as waived) under this subparagraph may be
used or reallocated by the State.''.

SEC. 605. ALLOWANCE OF NEW MARKETS TAX CREDIT AGAINST
ALTERNATIVE MINIMUM TAX.

(a) In General.--Subparagraph (B) of section 38(c)(4), as
amended by the Patient Protection and Affordable Care Act, is
amended by redesignating clauses (v) through (ix) as clauses
(vi) through (x), respectively, and by inserting after clause
(iv) the following new clause:
``(v) the credit determined under section 45D, but only
with respect to credits determined with respect to qualified
equity investments (as defined in section 45D(b)) initially
made before January 1, 2013,''.
(b) Effective Date.--The amendments made by this section
shall apply to credits determined with respect to qualified
equity investments (as defined in section 45D(b) of the
Internal Revenue Code of 1986) initially made after March 15,
2010.

SEC. 606. EXTENSION OF TAX-EXEMPT ELIGIBILITY FOR LOANS
GUARANTEED BY FEDERAL HOME LOAN BANKS.

Clause (iv) of section 149(b)(3)(A) is amended by striking
``December 31, 2010'' and inserting ``December 31, 2011''.

SEC. 607. EXTENSION OF TEMPORARY SMALL ISSUER RULES FOR
ALLOCATION OF TAX-EXEMPT INTEREST EXPENSE BY
FINANCIAL INSTITUTIONS.

(a) In General.--Clauses (i), (ii), and (iii) of section
265(b)(3)(G) are each amended by striking ``or 2010'' and
inserting ``, 2010, or 2011''.
(b) Conforming Amendment.--Subparagraph (G) of section
265(b)(3) is amended by striking ``and 2010'' in the heading
and inserting ``, 2010, and 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2010.

Subtitle B--Energy

SEC. 611. ALTERNATIVE MOTOR VEHICLE CREDIT FOR NEW QUALIFIED
HYBRID MOTOR VEHICLES OTHER THAN PASSENGER
AUTOMOBILES AND LIGHT TRUCKS.

(a) In General.--Paragraph (3) of section 30B(k) is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to property purchased after December 31, 2009.

SEC. 612. INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL.

(a) Credits for Biodiesel and Renewable Diesel Used as
Fuel.--Subsection (g) of section 40A is amended by striking
``December 31, 2009'' and inserting ``December 31, 2011''.
(b) Excise Tax Credits and Outlay Payments for Biodiesel
and Renewable Diesel Fuel Mixtures.--
(1) Paragraph (6) of section 6426(c) is amended by striking
``December 31, 2009'' and inserting ``December 31, 2011''.
(2) Subparagraph (B) of section 6427(e)(6) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2011''.
(c) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2009.

SEC. 613. CREDIT FOR ELECTRICITY PRODUCED AT CERTAIN OPEN-
LOOP BIOMASS FACILITIES.

(a) In General.--Clause (ii) of section 45(b)(4)(B) is
amended--
(1) by striking ``5-year period'' and inserting ``7-year
period''; and
(2) by adding at the end the following: ``In the case of
the next-to-last year of the 7-year period described in the
preceding sentence, the credit determined under subsection
(a) with respect to electricity produced during such year
shall not exceed 80 percent of such credit determined without
regard to this sentence. In the case of the last year of such
7-year period, the credit determined under subsection (a)
with respect to electricity produced during such year shall
not exceed 60 percent of such credit determined without
regard to this sentence.''.
(b) Effective Date.--The amendment made by this section
shall apply to electricity produced and sold after December
31, 2009.

SEC. 614. CREDIT FOR STEEL INDUSTRY FUEL.

(a) Credit Period.--
(1) In general.--Subclause (II) of section 45(e)(8)(D)(ii)
is amended to read as follows:

``(II) Credit period.--In lieu of the 10-year period
referred to in clauses (i) and (ii)(II) of subparagraph (A),
the credit period shall be the period beginning on the date
that the facility first produces steel industry fuel that is
sold to an unrelated person after September 30, 2008, and
ending 3 years after such date.''.

(2) Conforming amendment.--Section 45(e)(8)(D) is amended
by striking clause (iii) and by redesignating clause (iv) as
clause (iii).
(b) Extension of Placed-in-service Date.--Subparagraph (A)
of section 45(d)(8) is amended--
(1) by striking ``(or any modification to a facility)'';
and
(2) by striking ``2010'' and inserting ``2012''.
(c) Clarifications.--
(1) Steel industry fuel.--Subclause (I) of section
45(c)(7)(C)(i) is amended by inserting ``, a blend of coal
and petroleum coke, or other coke feedstock'' after ``on
coal''.
(2) Ownership interest.--Section 45(d)(8) is amended by
adding at the end the following new flush sentence:

``With respect to a facility producing steel industry fuel,
no person (including a ground lessor, customer, supplier, or
technology licensor) shall be treated as having an ownership
interest in the facility or as otherwise entitled to the
credit allowable under subsection (a) with respect to such
facility if such person's rent, license fee, or other
entitlement to net payments from the owner of such facility
is measured by a fixed dollar amount or a fixed amount per
ton, or otherwise determined without regard to the profit or
loss of such facility.''.
(3) Production and sale.--Subparagraph (D) of section
45(e)(8), as amended by subsection (a)(2), is amended by
redesignating clause (iii) as clause (iv) and by inserting
after clause (ii) the following new clause:
``(iii) Production and sale.--The owner of a facility
producing steel industry fuel shall

[[Page S8412]]

be treated as producing and selling steel industry fuel where
that owner manufactures such steel industry fuel from coal, a
blend of coal and petroleum coke, or other coke feedstock to
which it has title. The sale of such steel industry fuel by
the owner of the facility to a person who is not the owner of
the facility shall not fail to qualify as a sale to an
unrelated person solely because such purchaser may also be a
ground lessor, supplier, or customer.''.
(d) Specified Credit for Purposes of Alternative Minimum
Tax Exclusion.--Subclause (II) of section 38(c)(4)(B)(iii) is
amended by inserting ``(in the case of a refined coal
production facility producing steel industry fuel, during the
credit period set forth in section 45(e)(8)(D)(ii)(II))''
after ``service''.
(e) Effective Dates.--
(1) In general.--The amendments made by subsections (a),
(b), and (d) shall apply to fuel produced and sold after
September 30, 2008.
(2) Clarifications.--The amendments made by subsection (c)
shall take effect as if included in the amendments made by
the Energy Improvement and Extension Act of 2008.

SEC. 615. CREDIT FOR PRODUCING FUEL FROM COKE OR COKE GAS.

(a) In General.--Paragraph (1) of section 45K(g) is amended
by striking ``January 1, 2010'' and inserting ``January 1,
2012''.
(b) Effective Date.--The amendment made by this section
shall apply to facilities placed in service after December
31, 2009.

SEC. 616. NEW ENERGY EFFICIENT HOME CREDIT.

(a) In General.--Subsection (g) of section 45L is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to homes acquired after December 31, 2009.

SEC. 617. EXCISE TAX CREDITS AND OUTLAY PAYMENTS FOR
ALTERNATIVE FUEL AND ALTERNATIVE FUEL MIXTURES.

(a) Alternative Fuel Credit.--Paragraph (5) of section
6426(d) is amended by striking ``after December 31, 2009''
and all that follows and inserting ``after--
``(A) September 30, 2014, in the case of liquefied
hydrogen,
``(B) December 31, 2011, in the case of fuels described in
subparagraph (A), (C), (F), or (G) of paragraph (2), and
``(C) December 31, 2009, in any other case.''.
(b) Alternative Fuel Mixture Credit.--Paragraph (3) of
section 6426(e) is amended by striking ``after December 31,
2009'' and all that follows and inserting ``after--
``(A) September 30, 2014, in the case of liquefied
hydrogen,
``(B) December 31, 2011, in the case of fuels described in
subparagraph (A), (C), (F), or (G) of subsection (d)(2), and
``(C) December 31, 2009, in any other case.''.
(c) Payment Authority.--
(1) In general.--Paragraph (6) of section 6427(e) is
amended by striking ``and'' at the end of subparagraph (C),
by striking the period at the end of subparagraph (D) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(E) any alternative fuel or alternative fuel mixture (as
so defined) involving fuel described in subparagraph (A),
(C), (F), or (G) of section 6426(d)(2) sold or used after
December 31, 2011.''.
(2) Conforming amendment.--Subparagraph (C) of section
6427(e)(6) is amended by inserting ``or (E)'' after
``subparagraph (D)''.
(d) Exclusion of Black Liquor From Credit Eligibility.--The
last sentence of section 6426(d)(2) is amended by striking
``or biodiesel'' and inserting ``biodiesel, or any fuel
(including lignin, wood residues, or spent pulping liquors)
derived from the production of paper or pulp''.
(e) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2009.

SEC. 618. SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT
FERC OR STATE ELECTRIC RESTRUCTURING POLICY FOR
QUALIFIED ELECTRIC UTILITIES.

(a) In General.--Paragraph (3) of section 451(i) is amended
by striking ``January 1, 2010'' and inserting ``January 1,
2012''.
(b) Modification of Definition of Independent Transmission
Company.--
(1) In general.--Clause (i) of section 451(i)(4)(B) is
amended to read as follows:
``(i) who the Federal Energy Regulatory Commission
determines in its authorization of the transaction under
section 203 of the Federal Power Act (16 U.S.C. 824b) or by
declaratory order--

``(I) is not itself a market participant as determined by
the Commission, and also is not controlled by any such market
participant, or
``(II) to be independent from market participants or to be
an independent transmission company within the meaning of
such Commission's rules applicable to independent
transmission providers, and''.

(2) Related persons.--Paragraph (4) of section 451(i) is
amended by adding at the end the following flush sentence:

``For purposes of subparagraph (B)(i)(I), a person shall be
treated as controlled by another person if such persons would
be treated as a single employer under section 52.''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to dispositions after December 31, 2009.
(2) Modifications.--The amendments made by subsection (b)
shall apply to dispositions after the date of the enactment
of this Act.

SEC. 619. SUSPENSION OF LIMITATION ON PERCENTAGE DEPLETION
FOR OIL AND GAS FROM MARGINAL WELLS.

(a) In General.--Clause (ii) of section 613A(c)(6)(H) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 620. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

(a) Extension.--
(1) In general.--Section 25C(g)(2) is amended by striking
``2010'' and inserting ``2011''.
(2) Limitation.--Section 25C(b) is amended by striking
``and 2010'' and inserting ``, 2010, and 2011''.
(3) Effective date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
2010.
(b) Modification of Standards for Windows, Doors, and
Skylights.--
(1) In general.--Paragraph (4) of section 25C(c) is amended
by striking ``unless'' and all that follows and inserting
``unless--
``(A) such component meets the criteria for such components
established by the 2010 Energy Star Program Requirements for
Residential Windows, Doors, and Skylights, Version 5.0 (or
any subsequent version of such requirements which is in
effect after January 4, 2010), and
``(B) in the case of any component which is a garage door,
such component is equal to or below a U factor of 0.30 and
SHGC of 0.30.''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after December 31,
2010.

Subtitle C--Individual Tax Relief

PART I--MISCELLANEOUS PROVISIONS

SEC. 631. 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 2009'' and inserting ``2009, 2010,
or 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 632. ADDITIONAL STANDARD DEDUCTION FOR STATE AND LOCAL
REAL PROPERTY TAXES.

(a) In General.--Subparagraph (C) of section 63(c)(1) is
amended by striking ``or 2009'' and inserting ``2009, 2010,
or 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 633. DEDUCTION OF STATE AND LOCAL SALES TAXES.

(a) In General.--Subparagraph (I) of section 164(b)(5) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 634. CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE
FOR CONSERVATION PURPOSES.

(a) In General.--Clause (vi) of section 170(b)(1)(E) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Contributions by Certain Corporate Farmers and
Ranchers.--Clause (iii) of section 170(b)(2)(B) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2011''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2009.

SEC. 635. ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION AND
RELATED EXPENSES.

(a) In General.--Subsection (e) of section 222 is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Application and Extension of EGTRRA Sunset.--
Notwithstanding section 901 of the Economic Growth and Tax
Relief Reconciliation Act of 2001, such section shall apply
to the amendments made by this section and the amendments
made by section 431 of such Act by substituting ``December
31, 2011'' for ``December 31, 2010'' in subsection (a)(1)
thereof.
(c) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.
(d) Temporary Coordination With Section 25A.--In the case
of any taxpayer for any taxable year beginning in 2010 or
2011, no deduction shall be allowed under section 222 of the
Internal Revenue Code of 1986 if--
(1) the taxpayer's net Federal income tax reduction which
would be attributable to such deduction for such taxable
year, is less than
(2) the credit which would be allowed to the taxpayer for
such taxable year under section 25A of such Code (determined
without regard to sections 25A(e) and 26 of such Code).

SEC. 636. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
PLANS FOR CHARITABLE PURPOSES.

(a) In General.--Subparagraph (F) of section 408(d)(8) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date; Special Rule.--
(1) Effective date.--The amendment made by this section
shall apply to distributions made in taxable years beginning
after December 31, 2009.

[[Page S8413]]

(2) Special rule.--For purposes of qualified charitable
distributions under section 408(d)(8) of the Internal Revenue
Code of 1986 with respect to taxable years beginning in 2010,
a taxpayer shall be deemed to have made such a distribution
on the last day of such taxable year if the distribution is
made not later than January 31, 2011.

SEC. 637. LOOK-THRU OF CERTAIN REGULATED INVESTMENT COMPANY
STOCK IN DETERMINING GROSS ESTATE OF
NONRESIDENTS.

(a) In General.--Paragraph (3) of section 2105(d) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to estates of decedents dying after December 31,
2009.

PART II--LOW-INCOME HOUSING CREDITS

SEC. 641. ELECTION FOR DIRECT PAYMENT OF LOW-INCOME HOUSING
CREDIT FOR 2010.

(a) In General.--Section 42 is amended by redesignating
subsection (n) as subsection (o) and by inserting after
subsection (m) the following new subsection:
``(n) Election for Direct Payment of Credit.--
``(1) In general.--The housing credit agency of each State
shall be allowed a credit in an amount equal to such State's
low-income housing refundable credit election amount for the
applicable calendar year, which shall be payable by the
Secretary as provided in paragraph (5).
``(2) Low-income housing grant election amount.--For
purposes of this subsection--
``(A) In general.--The term `low-income housing grant
election amount' means, with respect to any State for any
applicable calendar year, such amount as the State may elect
which does not exceed 85 percent of the product of--
``(i) the sum of--

``(I) 100 percent of the State housing credit ceiling for
such applicable calendar year which is attributable to
amounts described in clauses (i) and (iii) of subsection
(h)(3)(C), plus any increase for such applicable calendar
year attributable to section 1400N(c) (including credits made
available under such section as applied by reason of sections
702(d)(2) and 704(b) of the Tax Extenders and Alternative
Minimum Tax Relief Act of 2008), and
``(II) 40 percent of the State housing credit ceiling for
such applicable calendar year which is attributable to
amounts described in clauses (ii) and (iv) of such
subsection, plus any credits for the calendar year preceding
such applicable calendar year attributable to the application
of such section 702(d)(2) and 704(b), multiplied by

``(ii) 10.

For purposes of subparagraph (A)(ii), in the case of any area
to which section 702(d)(2) or 704(b) of the Tax Extenders and
Alternative Minimum Tax Relief Act of 2008 applies, section
1400N(c)(1)(A) of such Code shall be applied without regard
to clause (i).
``(B) Applicable calendar year.--The term `applicable
calendar year' means calendar years 2010 and 2011.
``(3) Coordination with non-refundable credit.--For
purposes of this section, the amounts described in clauses
(i) through (iv) of subsection (h)(3)(C) with respect to any
State for 2010 shall each be reduced by so much of such
amount as is taken into account in determining the amount of
the credit allowed with respect to such State under paragraph
(1).
``(4) Special rule for basis.--Basis of a qualified low-
income building shall not be reduced by the amount of any
payment made under this subsection.
``(5) Payment of credit; use to finance low-income
buildings.--The Secretary shall pay to the housing credit
agency of each State an amount equal to the credit allowed
under paragraph (1). Rules similar to the rules of
subsections (c) and (d) of section 1602 of the American
Recovery and Reinvestment Tax Act of 2009 shall apply with
respect to any payment made under this paragraph, except that
such subsection (d) shall be applied by substituting `January
1 of the second calendar year after the applicable calendar
year' for `January 1, 2011'.''.
(b) Conforming Amendment.--Section 1324(b)(2) of title 31,
United States Code, is amended by inserting ``42(n),'' after
``36C,''.

SEC. 642. LOW-INCOME HOUSING GRANT ELECTION.

(a) Clarification of Eligibility of Low-income Housing
Credits for Low-income Housing Grant Election.--Paragraph (1)
of section 1602(b) of the American Recovery and Reinvestment
Tax Act of 2009 is amended--
(1) by inserting ``, plus any increase for 2009 or 2010
attributable to section 1400N(c) of such Code (including
credits made available under such section as applied by
reason of sections 702(d)(2) and 704(b) of the Tax Extenders
and Alternative Minimum Tax Relief Act of 2008)'' after
``1986'' in subparagraph (A), and
(2) by inserting ``, plus any credits for 2009 attributable
to the application of such section 702(d)(2) and 704(b)''
after ``such section'' in subparagraph (B).
(b) Application of Additional Housing Credit Amount for
Purposes of 2009 Grant Election.--Subsection (b) of section
1602 of the American Recovery and Reinvestment Tax Act of
2009, as amended by subsection (a), is amended by adding at
the end the following flush sentence:

``For purposes of paragraph (1)(B), in the case of any area
to which section 702(d)(2) or 704(b) of the Tax Extenders and
Alternative Minimum Tax Relief Act of 2008 applies, section
1400N(c)(1)(A) of such Code shall be applied without regard
to clause (i).''.
(c) Effective Date.--The amendments made by this section
shall apply as if included in the enactment of section 1602
of the American Recovery and Reinvestment Tax Act of 2009.

Subtitle D--Business Tax Relief

SEC. 651. RESEARCH CREDIT.

(a) In General.--Subparagraph (B) of section 41(h)(1) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Conforming Amendment.--Subparagraph (D) of section
45C(b)(1) is amended by striking ``December 31, 2009'' and
inserting ``December 31, 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2009.

SEC. 652. INDIAN EMPLOYMENT TAX CREDIT.

(a) In General.--Subsection (f) of section 45A is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 653. NEW MARKETS TAX CREDIT.

(a) In General.--Subparagraph (F) of section 45D(f)(1) is
amended by inserting ``, 2010, and 2011'' after ``2009''.
(b) Conforming Amendment.--Paragraph (3) of section 45D(f)
is amended by striking ``2014'' and inserting ``2016''.
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after 2009.

SEC. 654. RAILROAD TRACK MAINTENANCE CREDIT.

(a) In General.--Subsection (f) of section 45G is amended
by striking ``January 1, 2010'' and inserting ``January 1,
2012''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred in taxable years
beginning after December 31, 2009.

SEC. 655. MINE RESCUE TEAM TRAINING CREDIT.

(a) In General.--Subsection (e) of section 45N is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Credit Allowable Against AMT.--Subparagraph (B) of
section 38(c)(4), as amended by section 105, is amended--
(1) by redesignating clauses (vii) through (x) as clauses
(viii) through (xi), respectively; and
(2) by inserting after clause (vi) the following new
clause:
``(vii) the credit determined under section 45N,''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2009.
(2) Allowance against amt.--The amendments made by
subsection (b) shall apply to credits determined for taxable
years beginning after December 31, 2009, and to carrybacks of
such credits.

SEC. 656. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE
DUTY MEMBERS OF THE UNIFORMED SERVICES.

(a) In General.--Subsection (f) of section 45P is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to payments made after December 31, 2009.

SEC. 657. 5-YEAR DEPRECIATION FOR FARMING BUSINESS MACHINERY
AND EQUIPMENT.

(a) In General.--Clause (vii) of section 168(e)(3)(B) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 658. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED
LEASEHOLD IMPROVEMENTS, QUALIFIED RESTAURANT
BUILDINGS AND IMPROVEMENTS, AND QUALIFIED
RETAIL IMPROVEMENTS.

(a) In General.--Clauses (iv), (v), and (ix) of section
168(e)(3)(E) are each amended by striking ``January 1, 2010''
and inserting ``January 1, 2012''.
(b) Conforming Amendments.--
(1) Clause (i) of section 168(e)(7)(A) is amended by
striking ``if such building is placed in service after
December 31, 2008, and before January 1, 2010,''.
(2) Paragraph (8) of section 168(e) is amended by striking
subparagraph (E).
(3) Section 179(f)(2) is amended--
(A) by striking ``(without regard to the dates specified in
subparagraph (A)(i) thereof)'' in subparagraph (B), and
(B) by striking ``(without regard to subparagraph (E)
thereof)'' in subparagraph (C).
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 659. 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS
ENTERTAINMENT COMPLEXES.

(a) In General.--Subparagraph (D) of section 168(i)(15) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 660. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON
AN INDIAN RESERVATION.

(a) In General.--Paragraph (8) of section 168(j) is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.

[[Page S8414]]

(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 661. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
FOOD INVENTORY.

(a) In General.--Clause (iv) of section 170(e)(3)(C) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2009.

SEC. 662. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
BOOK INVENTORIES TO PUBLIC SCHOOLS.

(a) In General.--Clause (iv) of section 170(e)(3)(D) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2009.

SEC. 663. ENHANCED CHARITABLE DEDUCTION FOR CORPORATE
CONTRIBUTIONS OF COMPUTER INVENTORY FOR
EDUCATIONAL PURPOSES.

(a) In General.--Subparagraph (G) of section 170(e)(6) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2009.

SEC. 664. ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.

(a) In General.--Subsection (g) of section 179E is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 665. SPECIAL EXPENSING RULES FOR CERTAIN FILM AND
TELEVISION PRODUCTIONS.

(a) In General.--Subsection (f) of section 181 is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to productions commencing after December 31,
2009.

SEC. 666. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

(a) In General.--Subsection (h) of section 198 is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after December
31, 2009.

SEC. 667. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES
IN PUERTO RICO.

(a) In General.--Subparagraph (C) of section 199(d)(8) is
amended--
(1) by striking ``first 4 taxable years'' and inserting
``first 6 taxable years''; and
(2) by striking ``January 1, 2010'' and inserting ``January
1, 2012''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 668. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS
TO CONTROLLING EXEMPT ORGANIZATIONS.

(a) In General.--Clause (iv) of section 512(b)(13)(E) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to payments received or accrued after December
31, 2009.

SEC. 669. EXCLUSION OF GAIN OR LOSS ON SALE OR EXCHANGE OF
CERTAIN BROWNFIELD SITES FROM UNRELATED
BUSINESS INCOME.

(a) In General.--Subparagraph (K) of section 512(b)(19) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to property acquired after December 31, 2009.

SEC. 670. TIMBER REIT MODERNIZATION.

(a) In General.--Paragraph (8) of section 856(c) is amended
by striking ``means'' and all that follows and inserting
``means December 31, 2011.''.
(b) Conforming Amendments.--
(1) Subparagraph (I) of section 856(c)(2) is amended by
striking ``the first taxable year beginning after the date of
the enactment of this subparagraph'' and inserting ``a
taxable year beginning on or before the termination date''.
(2) Clause (iii) of section 856(c)(5)(H) is amended by
inserting ``in taxable years beginning'' after
``dispositions''.
(3) Clause (v) of section 857(b)(6)(D) is amended by
inserting ``in a taxable year beginning'' after ``sale''.
(4) Subparagraph (G) of section 857(b)(6) is amended by
inserting ``in a taxable year beginning'' after ``In the case
of a sale''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after May 22, 2009.

SEC. 671. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.

(a) In General.--Paragraphs (1)(C) and (2)(C) of section
871(k) are each amended by striking ``December 31, 2009'' and
inserting ``December 31, 2011''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 672. RIC QUALIFIED INVESTMENT ENTITY TREATMENT UNDER
FIRPTA.

(a) In General.--Clause (ii) of section 897(h)(4)(A) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on January 1, 2010. Notwithstanding the preceding
sentence, such amendment shall not apply with respect to the
withholding requirement under section 1445 of the Internal
Revenue Code of 1986 for any payment made before the date of
the enactment of this Act.
(2) Amounts withheld on or before date of enactment.--In
the case of a regulated investment company--
(A) which makes a distribution after December 31, 2009, and
before the date of the enactment of this Act; and
(B) which would (but for the second sentence of paragraph
(1)) have been required to withhold with respect to such
distribution under section 1445 of such Code,

such investment company shall not be liable to any person to
whom such distribution was made for any amount so withheld
and paid over to the Secretary of the Treasury.

SEC. 673. EXCEPTIONS FOR ACTIVE FINANCING INCOME.

(a) In General.--Sections 953(e)(10) and 954(h)(9) are each
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Conforming Amendment.--Section 953(e)(10) is amended by
striking ``December 31, 2009'' and inserting ``December 31,
2011''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2009, and to taxable years of
United States shareholders with or within which any such
taxable year of such foreign corporation ends.

SEC. 674. LOOK-THRU TREATMENT OF PAYMENTS BETWEEN RELATED
CONTROLLED FOREIGN CORPORATIONS UNDER FOREIGN
PERSONAL HOLDING COMPANY RULES.

(a) In General.--Subparagraph (C) of section 954(c)(6) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2009, and to taxable years of
United States shareholders with or within which any such
taxable year of such foreign corporation ends.

SEC. 675. BASIS ADJUSTMENT TO STOCK OF S CORPS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.

(a) In General.--Paragraph (2) of section 1367(a) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2009.

SEC. 676. EMPOWERMENT ZONE TAX INCENTIVES.

(a) In General.--Section 1391 is amended--
(1) by striking ``December 31, 2009'' in subsection
(d)(1)(A)(i) and inserting ``December 31, 2011''; and
(2) by striking the last sentence of subsection (h)(2).
(b) Increased Exclusion of Gain on Stock of Empowerment
Zone Businesses.--Subparagraph (C) of section 1202(a)(2) is
amended--
(1) by striking ``December 31, 2014'' and inserting
``December 31, 2016''; and
(2) by striking ``2014'' in the heading and inserting
``2016''.
(c) Treatment of Certain Termination Dates Specified in
Nominations.--In the case of a designation of an empowerment
zone the nomination for which included a termination date
which is contemporaneous with the date specified in
subparagraph (A)(i) of section 1391(d)(1) of the Internal
Revenue Code of 1986 (as in effect before the enactment of
this Act), subparagraph (B) of such section shall not apply
with respect to such designation unless, after the date of
the enactment of this section, the entity which made such
nomination reconfirms such termination date, or amends the
nomination to provide for a new termination date, in such
manner as the Secretary of the Treasury (or the Secretary's
designee) may provide.
(d) Effective Date.--The amendments made by this section
shall apply to periods after December 31, 2009.

SEC. 677. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.

(a) In General.--Subsection (f) of section 1400 is amended
by striking ``December 31, 2009'' each place it appears and
inserting ``December 31, 2011''.
(b) Tax-exempt DC Empowerment Zone Bonds.--Subsection (b)
of section 1400A is amended by striking ``December 31, 2009''
and inserting ``December 31, 2011''.
(c) Zero-percent Capital Gains Rate.--
(1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A),
(4)(A)(i), and (4)(B)(i)(I) of section 1400B(b) are each
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(2) Limitation on period of gains.--
(A) In general.--Paragraph (2) of section 1400B(e) is
amended--
(i) by striking ``December 31, 2014'' and inserting
``December 31, 2016''; and
(ii) by striking ``2014'' in the heading and inserting
``2016''.
(B) Partnerships and s-corps.--Paragraph (2) of section
1400B(g) is amended by striking ``December 31, 2014'' and
inserting ``December 31, 2016''.
(d) First-time Homebuyer Credit.--Subsection (i) of section
1400C is amended by

[[Page S8415]]

striking ``January 1, 2010'' and inserting ``January 1,
2012''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to periods after December 31, 2009.
(2) Tax-exempt dc empowerment zone bonds.--The amendment
made by subsection (b) shall apply to bonds issued after
December 31, 2009.
(3) Acquisition dates for zero-percent capital gains
rate.--The amendments made by subsection (c) shall apply to
property acquired or substantially improved after December
31, 2009.
(4) Homebuyer credit.--The amendment made by subsection (d)
shall apply to homes purchased after December 31, 2009.

SEC. 678. RENEWAL COMMUNITY TAX INCENTIVES.

(a) In General.--Subsection (b) of section 1400E is
amended--
(1) by striking ``December 31, 2009'' in paragraphs (1)(A)
and (3) and inserting ``December 31, 2011''; and
(2) by striking ``January 1, 2010'' in paragraph (3) and
inserting ``January 1, 2012''.
(b) Zero-percent Capital Gains Rate.--
(1) Acquisition date.--Paragraphs (2)(A)(i), (3)(A),
(4)(A)(i), and (4)(B)(i) of section 1400F(b) are each amended
by striking ``January 1, 2010'' and inserting ``January 1,
2012''.
(2) Limitation on period of gains.--Paragraph (2) of
section 1400F(c) is amended--
(A) by striking ``December 31, 2014'' and inserting
``December 31, 2016''; and
(B) by striking ``2014'' in the heading and inserting
``2016''.
(3) Clerical amendment.--Subsection (d) of section 1400F is
amended by striking ``and `December 31, 2014' for `December
31, 2014' ''.
(c) Commercial Revitalization Deduction.--
(1) In general.--Subsection (g) of section 1400I is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(2) Conforming amendment.--Subparagraph (A) of section
1400I(d)(2) is amended by striking ``after 2001 and before
2010'' and inserting ``which begins after 2001 and before the
date referred to in subsection (g)''.
(d) Increased Expensing Under Section 179.--Subparagraph
(A) of section 1400J(b)(1) is amended by striking ``January
1, 2010'' and inserting ``January 1, 2012''.
(e) Treatment of Certain Termination Dates Specified in
Nominations.--In the case of a designation of a renewal
community the nomination for which included a termination
date which is contemporaneous with the date specified in
subparagraph (A) of section 1400E(b)(1) of the Internal
Revenue Code of 1986 (as in effect before the enactment of
this Act), subparagraph (B) of such section shall not apply
with respect to such designation unless, after the date of
the enactment of this section, the entity which made such
nomination reconfirms such termination date, or amends the
nomination to provide for a new termination date, in such
manner as the Secretary of the Treasury (or the Secretary's
designee) may provide.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to periods after December 31, 2009.
(2) Acquisitions.--The amendments made by subsections
(b)(1) and (d) shall apply to acquisitions after December 31,
2009.
(3) Commercial revitalization deduction.--
(A) In general.--The amendment made by subsection (c)(1)
shall apply to buildings placed in service after December 31,
2009.
(B) Conforming amendment.--The amendment made by subsection
(c)(2) shall apply to calendar years beginning after December
31, 2009.

SEC. 679. TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM
EXCISE TAXES TO PUERTO RICO AND THE VIRGIN
ISLANDS.

(a) In General.--Paragraph (1) of section 7652(f) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to distilled spirits brought into the United
States after December 31, 2009.

SEC. 680. AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT.

(a) In General.--Subsection (d) of section 119 of division
A of the Tax Relief and Health Care Act of 2006 is amended--
(1) by striking ``first 4 taxable years'' and inserting
``first 6 taxable years'', and
(2) by striking ``January 1, 2010'' and inserting ``January
1, 2012''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 681. ELECTION TO TEMPORARILY UTILIZE UNUSED AMT CREDITS
DETERMINED BY DOMESTIC INVESTMENT.

(a) In General.--Section 53 is amended by adding at the end
the following new subsection:
``(g) Election for Corporations With New Domestic
Investments.--
``(1) In general.--If a corporation elects to have this
subsection apply for its first taxable year beginning after
December 31, 2009, the limitation imposed by subsection (c)
for such taxable year shall be increased by the AMT credit
adjustment amount.
``(2) AMT credit adjustment amount.--For purposes of
paragraph (1), the term `AMT credit adjustment amount' means,
the lesser of--
``(A) 50 percent of a corporation's minimum tax credit for
its first taxable year beginning after December 31, 2009,
determined under subsection (b), or
``(B) 10 percent of new domestic investments made during
such taxable year.
``(3) New domestic investments.--For purposes of this
subsection, the term `new domestic investments' means the
cost of qualified property (as defined in section
168(k)(2)(A)(i))--
``(A) the original use of which commences with the taxpayer
during the taxable year, and
``(B) which is placed in service in the United States by
the taxpayer during such taxable year.
``(4) Credit refundable.--For purposes of subsection (b) of
section 6401, the aggregate increase in the credits allowable
under this part for any taxable year resulting from the
application of this subsection shall be treated as allowed
under subpart C (and not under any other subpart). For
purposes of section 6425, any amount treated as so allowed
shall be treated as a payment of estimated income tax for the
taxable year.
``(5) Election.--An election under this subsection shall be
made at such time and in such manner as prescribed by the
Secretary, and once made, may be revoked only with the
consent of the Secretary. Not later than 90 days after the
date of the enactment of this subsection, the Secretary shall
issue guidance specifying such time and manner.
``(6) Treatment of certain partnership investments.--For
purposes of this subsection, a corporation shall take into
account its allocable share of any new domestic investments
by a partnership for any taxable year if, and only if, more
than 90 percent of the capital and profits interests in such
partnership are owned by such corporation (directly or
indirectly) at all times during such taxable year.
``(7) No double benefit.--
``(A) In general.--A corporation making an election under
this subsection may not make an election under subparagraph
(H) of section 172(b)(1).
``(B) Special rules with respect to taxpayers previously
electing applicable net operating losses.--In the case of a
corporation which made an election under subparagraph (H) of
section 172(b)(1) and elects the application of this
subsection--
``(i) Election of applicable net operating loss treated as
revoked.--The election under such subparagraph (H) shall
(notwithstanding clause (iii)(II) of such subparagraph) be
treated as having been revoked by the taxpayer.
``(ii) Coordination with provision for expedited refund.--
The amount otherwise treated as a payment of estimated income
tax under the last sentence of paragraph (4) shall be reduced
(but not below zero) by the aggregate increase in unpaid tax
liability determined under this chapter by reason of the
revocation of the election under clause (i).
``(iii) Application of statute of limitations.--With
respect to the revocation of an election under clause (i)--

``(I) the statutory period for the assessment of any
deficiency attributable to such revocation shall not expire
before the end of the 3-year period beginning on the date of
the election to have this subsection apply, and
``(II) such deficiency may be assessed before the
expiration of such 3-year period notwithstanding the
provisions of any other law or rule of law which would
otherwise prevent such assessment.

``(C) Exception for eligible small businesses.--
Subparagraphs (A) and (B) shall not apply to an eligible
small business as defined in section 172(b)(1)(H)(v)(II).
``(8) Regulations.--The Secretary may issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this subsection,
including to prevent fraud and abuse under this
subsection.''.
(b) Conforming Amendments.--
(1) Section 6211(b)(4)(A) is amended by inserting
``53(g),'' after ``53(e),''.
(2) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``53(g),'' after ``53(e),''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 682. REDUCTION IN CORPORATE RATE FOR QUALIFIED TIMBER
GAIN.

(a) In General.--Paragraph (1) of section 1201(b) is
amended by striking `` `ending' '' and all that follows
through `` `such date' ''.
(b) Conforming Amendment.--Paragraph (3) of section 1201(b)
is amended to read as follows:
``(3) Application of subsection.--The qualified timber gain
for any taxable year shall not exceed the qualified timber
gain which would be determined by not taking into account any
portion of such taxable year after December 31, 2011.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after May 22, 2009.

SEC. 683. STUDY OF EXTENDED TAX EXPENDITURES.

(a) Findings.--Congress finds the following:
(1) Currently, the aggregate cost of Federal tax
expenditures rivals, or even exceeds, the amount of total
Federal discretionary spending.
(2) Given the escalating public debt, a critical
examination of this use of taxpayer dollars is essential.
(3) Additionally, tax expenditures can complicate the
Internal Revenue Code of 1986 for

[[Page S8416]]

taxpayers and complicate tax administration for the Internal
Revenue Service.
(4) To facilitate a better understanding of tax
expenditures in the future, it is constructive for
legislation extending these provisions to include a study of
such provisions.
(b) Requirement to Report.--Not later than December 15,
2011, the Chief of Staff of the Joint Committee on Taxation,
in consultation with the Comptroller General of the United
States, shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a report on each tax expenditure (as defined in
section 3(3) of the Congressional Budget Impoundment Control
Act of 1974 (2 U.S.C. 622(3)) extended by this title.
(c) Rolling Submission of Reports.--The Chief of Staff of
the Joint Committee on Taxation shall initially submit the
reports for each such tax expenditure enacted in this
subtitle (relating to business tax relief) and subtitle A
(relating to energy) in order of the tax expenditure
incurring the least aggregate cost to the greatest aggregate
cost (determined by reference to the cost estimate of this
Act by the Joint Committee on Taxation). Thereafter, such
reports may be submitted in such order as the Chief of Staff
determines appropriate.
(d) Contents of Report.--Such reports shall contain the
following:
(1) An explanation of the tax expenditure and any relevant
economic, social, or other context under which it was first
enacted.
(2) A description of the intended purpose of the tax
expenditure.
(3) An analysis of the overall success of the tax
expenditure in achieving such purpose, and evidence
supporting such analysis.
(4) An analysis of the extent to which further extending
the tax expenditure, or making it permanent, would contribute
to achieving such purpose.
(5) A description of the direct and indirect beneficiaries
of the tax expenditure, including identifying any unintended
beneficiaries.
(6) An analysis of whether the tax expenditure is the most
cost-effective method for achieving the purpose for which it
was intended, and a description of any more cost-effective
methods through which such purpose could be accomplished.
(7) A description of any unintended effects of the tax
expenditure that are useful in understanding the tax
expenditure's overall value.
(8) An analysis of how the tax expenditure could be
modified to better achieve its original purpose.
(9) A brief description of any interactions (actual or
potential) with other tax expenditures or direct spending
programs in the same or related budget function worthy of
further study.
(10) A description of any unavailable information the staff
of the Joint Committee on Taxation may need to complete a
more thorough examination and analysis of the tax
expenditure, and what must be done to make such information
available.
(e) Minimum Analysis by Deadline.--In the event the Chief
of Staff of the Joint Committee on Taxation concludes it will
not be feasible to complete all reports by the date specified
in subsection (a), at a minimum, the reports for each tax
expenditure enacted in this subtitle (relating to business
tax relief) and subtitle A (relating to energy) shall be
completed by such date.

Subtitle E--Temporary Disaster Relief Provisions

PART I--NATIONAL DISASTER RELIEF

SEC. 691. WAIVER OF CERTAIN MORTGAGE REVENUE BOND
REQUIREMENTS.

(a) In General.--Paragraph (11) of section 143(k) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Special Rule for Residences Destroyed in Federally
Declared Disasters.--Paragraph (13) of section 143(k), as
redesignated by subsection (c), is amended by striking
``January 1, 2010'' in subparagraphs (A)(i) and (B)(i) and
inserting ``January 1, 2012''.
(c) Technical Amendment.--Subsection (k) of section 143 is
amended by redesignating the second paragraph (12) (relating
to special rules for residences destroyed in federally
declared disasters) as paragraph (13).
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendment made by this section shall apply to
bonds issued after December 31, 2009.
(2) Residences destroyed in federally declared disasters.--
The amendments made by subsection (b) shall apply with
respect to disasters occurring after December 31, 2009.
(3) Technical amendment.--The amendment made by subsection
(c) shall take effect as if included in section 709 of the
Tax Extenders and Alternative Minimum Tax Relief Act of 2008.

SEC. 692. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.

(a) In General.--Subclause (I) of section 165(h)(3)(B)(i)
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) $500 Limitation.--Paragraph (1) of section 165(h) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2011''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to federally declared disasters occurring after
December 31, 2009.
(2) $500 limitation.--The amendment made by subsection (b)
shall apply to taxable years beginning after December 31,
2009.

SEC. 693. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED
DISASTER PROPERTY.

(a) In General.--Subclause (I) of section 168(n)(2)(A)(ii)
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to disasters occurring after December 31, 2009.

SEC. 694. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY
DECLARED DISASTERS.

(a) In General.--Subclause (I) of section 172(j)(1)(A)(i)
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to losses attributable to disasters occurring
after December 31, 2009.

SEC. 695. EXPENSING OF QUALIFIED DISASTER EXPENSES.

(a) In General.--Subparagraph (A) of section 198A(b)(2) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures on account of disasters occurring
after December 31, 2009.

PART II--REGIONAL PROVISIONS

Subpart A--New York Liberty Zone

SEC. 696. SPECIAL DEPRECIATION ALLOWANCE FOR NONRESIDENTIAL
AND RESIDENTIAL REAL PROPERTY.

(a) In General.--Subparagraph (A) of section 1400L(b)(2) is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

SEC. 697. TAX-EXEMPT BOND FINANCING.

(a) In General.--Subparagraph (D) of section 1400L(d)(2) is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to bonds issued after December 31, 2009.

Subpart B--GO Zone

SEC. 698. INCREASE IN REHABILITATION CREDIT.

(a) In General.--Subsection (h) of section 1400N is amended
by striking ``December 31, 2009'' and inserting ``December
31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred after December 31,
2009.

SEC. 699. WORK OPPORTUNITY TAX CREDIT WITH RESPECT TO CERTAIN
INDIVIDUALS AFFECTED BY HURRICANE KATRINA FOR
EMPLOYERS INSIDE DISASTER AREAS.

(a) In General.--Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by
striking ``4-year'' and inserting ``5-year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals hired after August 27, 2009.

SEC. 700. EXTENSION OF LOW-INCOME HOUSING CREDIT RULES FOR
BUILDINGS IN GO ZONES.

Section 1400N(c)(5) is amended by striking ``January 1,
2011'' and inserting ``January 1, 2013''.

TITLE VII--TECHNICAL CORRECTIONS TO PENSION FUNDING LEGISLATION

SEC. 701. DEFINITION OF ELIGIBLE PLAN YEAR.

(a) Amendment to ERISA.--Clause (v) of section 303(c)(2)(D)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1083(c)(2)(D)), as added by section 201(a)(1) of the
Preservation of Access to Care for Medicare Beneficiaries and
Pension Relief Act of 2010, is amended--
(1) by striking ``on or after the date of the enactment of
this subparagraph'' and inserting ``on or after June 25, 2010
(March 10, 2010, in the case of an eligible plan)'', and
(2) by adding at the end the following new sentence: ``For
purposes of the preceding sentence, a plan shall be treated
as an eligible plan only if, as of the date of the election
with respect to the plan under clause (i)--
``(A) the plan sponsor is not a debtor in a case under
title 11, United States Code, or similar Federal or State
law,
``(B) there are no unpaid minimum required contributions
with respect to the plan for purposes of section 4971 of the
Internal Revenue Code of 1986 (imposing an excise tax when
minimum required contributions are not paid by the due date
for the plan year),
``(C) there are no outstanding liens in favor of the plan
under subsection (k), and
``(D) the plan sponsor has not initiated a distress
termination of the plan under section 4041.''.
(b) Amendment to Internal Revenue Code of 1986.--Clause (v)
of section 430(c)(2)(D) of the Internal Revenue Code of 1986,
as added by section 201(b)(1) of the Preservation of Access
to Care for Medicare Beneficiaries and Pension Relief Act of
2010, is amended--
(1) by striking ``on or after the date of the enactment of
this subparagraph'' and inserting ``on or after June 25, 2010
(March 10, 2010, in the case of an eligible plan)'', and
(2) by adding at the end the following new sentence: ``For
purposes of the preceding sentence, a plan shall be treated
as an eligible plan only if, as of the date of the election
with respect to the plan under clause (i)--

[[Page S8417]]

``(A) the plan sponsor is not a debtor in a case under
title 11, United States Code, or similar Federal or State
law,
``(B) there are no unpaid minimum required contributions
with respect to the plan for purposes of section 4971
(imposing an excise tax when minimum required contributions
are not paid by the due date for the plan year),
``(C) there are no outstanding liens in favor of the plan
under subsection (k), and
``(D) the plan sponsor has not initiated a distress
termination of the plan under section 4041 of the Employee
Retirement Income Security Act of 1974.''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the amendments made by
the provisions of the Preservation of Access to Care for
Medicare Beneficiaries and Pension Relief Act of 2010 to
which the amendments relate.

SEC. 702. ELIGIBLE CHARITY PLANS.

(a) Definition of Eligible Charity Plans.--
(1) In general.--Section 104(d) of the Pension Protection
Act of 2006, as added by section 202(b) of the Preservation
of Access to Care for Medicare Beneficiaries and Pension
Relief Act of 2010, is amended to read as follows:
``(d) Eligible Charity Plan Defined.--For purposes of this
section, a plan shall be treated as an eligible charity plan
for a plan year if--
``(1) the plan is maintained by one or more employers
employing employees who are accruing benefits based on
service for the plan year,
``(2) such employees are employed in at least 20 States,
``(3) more than 98 percent of such employees are employed
by an employer described in section 501(c)(3) of such Code
and the primary exempt purpose of each such employer is to
provide services with respect to children, and
``(4) the plan sponsor elects (at such time and in such
form and manner as shall be prescribed by the Secretary of
the Treasury) to be so treated.
Any election under this subsection may be revoked only with
the consent of the Secretary of the Treasury.''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the amendment made by the
provision of the Preservation of Access to Care for Medicare
Beneficiaries and Pension Relief Act of 2010 to which the
amendment relates (determined after application of the
amendment made by subsection (c)), except that a plan sponsor
may elect to apply such amendment to plan years beginning on
or after January 1, 2011.
(b) Regulations.--The Secretary of the Treasury may
prescribe such regulations as may be necessary to carry out
the purposes of the amendments made by section 202(b) of the
Preservation of Access to Care for Medicare Beneficiaries and
Pension Relief Act of 2010 and the amendment made by
subsection (a).
(c) Application of New Rules to Eligible Charity Plans.--
(1) In general.--Paragraph (2) of section 202(c) of the
Preservation of Access to Care for Medicare Beneficiaries and
Pension Relief Act of 2010 is amended to read as follows:
``(2) Eligible charity plans.--The amendments made by
subsection (b) shall apply to plan years beginning after
December 31, 2010, except that a plan sponsor may elect to
apply such amendments to plan years beginning after an
earlier date.''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the amendment made by the
provision of the Preservation of Access to Care for Medicare
Beneficiaries and Pension Relief Act of 2010 to which the
amendment relates.

SEC. 703. SUSPENSION OF CERTAIN FUNDING LEVEL LIMITATIONS.

(a) Limitations on Benefit Accruals.--Section 203 of the
Worker, Retiree, and Employer Recovery Act of 2008 (Public
Law 110-458; 122 Stat. 5118) is amended--
(1) by striking ``the first plan year beginning during the
period beginning on October 1, 2008, and ending on September
30, 2009'' and inserting ``any plan year beginning during the
period beginning on October 1, 2008, and ending on December
31, 2011'';
(2) by striking ``substituting'' and all that follows
through ``for such plan year'' and inserting ``substituting
for such percentage the plan's adjusted funding target
attainment percentage for the last plan year ending before
September 30, 2009,''; and
(3) by striking ``for the preceding plan year is greater''
and inserting ``for such last plan year is greater''.
(b) Social Security Level-income Options.--
(1) ERISA amendment.--Section 206(g)(3)(E) of the Employee
Retirement Income Security Act of 1974 is amended by adding
at the end the following new sentence: ``For purposes of
applying clause (i) in the case of payments the annuity
starting date for which occurs on or before December 31,
2011, payments under a social security leveling option shall
be treated as not in excess of the monthly amount paid under
a single life annuity (plus an amount not in excess of a
social security supplement described in the last sentence of
section 204(b)(1)(G)).''.
(2) IRC amendment.--Section 436(d)(5) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new sentence: ``For purposes of applying
subparagraph (A) in the case of payments the annuity starting
date for which occurs on or before December 31, 2011,
payments under a social security leveling option shall be
treated as not in excess of the monthly amount paid under a
single life annuity (plus an amount not in excess of a social
security supplement described in the last sentence of section
411(a)(9)).''.
(3) Effective date.--
(A) In general.--The amendments made by this subsection
shall apply to annuity payments the annuity starting date for
which occurs on or after January 1, 2011.
(B) Permitted application.--A plan shall not be treated as
failing to meet the requirements of sections 206(g) of the
Employee Retirement Income Security Act of 1974 (as amended
by this subsection) and section 436(d) of the Internal
Revenue Code of 1986 (as so amended) if the plan sponsor
elects to apply the amendments made by this subsection to
payments the annuity starting date for which occurs before
January 1, 2011.
(c) Repeal of Related Provisions.--The provisions of, and
the amendments made by, section 203 of the Preservation of
Access to Care for Medicare Beneficiaries and Pension Relief
Act of 2010 are repealed and the Employee Retirement Income
Security Act of 1974, the Internal Revenue Code of 1986, and
the Worker, Retiree, and Employer Recovery Act of 2008
(Public Law 110-458; 122 Stat. 5118) shall be applied as if
such section had never been enacted.

SEC. 704. OPTIONAL USE OF 30-YEAR AMORTIZATION PERIODS.

(a) Amendment to ERISA.--Paragraph (8) of section 304(b) of
the Employee Retirement Income Security Act of 1974, as
amended by the Preservation of Access to Care for Medicare
Beneficiaries and Pension Relief Act of 2010, is amended by
striking ``after August 31, 2008'' each place it appears in
subparagraphs (A)(i), (B)(i)(I), and (B)(i)(II), and
inserting ``on or after June 30, 2008''.
(b) Amendment to Internal Revenue Code of 1986 .--Paragraph
(8) of section 431(b) of the Internal Revenue Code of 1986,
as amended by the Preservation of Access to Care for Medicare
Beneficiaries and Pension Relief Act of 2010, is amended by
striking ``after August 31, 2008'' each place it appears in
subparagraphs (A)(i) and (B)(i)(I) and inserting ``on or
after June 30, 2008''.
(c) Effective Date and Special Rules.--The amendments made
by this section shall take effect as of the first day of the
first plan year beginning on or after June 30, 2008, except
that any election a plan sponsor makes pursuant to this
section or the amendments made thereby that affects the
plan's funding standard account for any plan year beginning
before October 1, 2009, shall be disregarded for purposes of
applying the provisions of section 305 of the Employee
Retirement Income Security Act of 1974 and section 432 of the
Internal Revenue Code of 1986 to that plan year.

TITLE VIII--TEMPORARY EXTENSION OF CERTAIN PROVISIONS ENDING IN 2010 OR
2011

Subtitle A--Unemployment Benefits

SEC. 801. EXTENSION OF UNEMPLOYMENT INSURANCE PROVISIONS.

(a) In General.--(1) Section 4007 of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note) is amended--
(A) by striking ``November 30, 2010'' each place it appears
and inserting ``January 3, 2012'';
(B) in the heading for subsection (b)(2), by striking
``november 30, 2010'' and inserting ``january 3, 2012''; and
(C) in subsection (b)(3), by striking ``April 30, 2011''
and inserting ``June 9, 2012''.
(2) Section 2005 of the Assistance for Unemployed Workers
and Struggling Families Act, as contained in Public Law 111-5
(26 U.S.C. 3304 note; 123 Stat. 444), is amended--
(A) by striking ``December 1, 2010'' each place it appears
and inserting ``January 4, 2012''; and
(B) in subsection (c), by striking ``May 1, 2011'' and
inserting ``June 11, 2012''.
(3) Section 5 of the Unemployment Compensation Extension
Act of 2008 (Public Law 110-449; 26 U.S.C. 3304 note) is
amended by striking ``April 30, 2011'' and inserting ``June
10, 2012''.
(b) Funding.--Section 4004(e)(1) of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
and
(2) by inserting after subparagraph (F) the following:
``(G) the amendments made by section 2(a)(1) of the ;
and''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of the
Unemployment Compensation Extension Act of 2010 (Public Law
111-205).

SEC. 802. TEMPORARY MODIFICATION OF INDICATORS UNDER THE
EXTENDED BENEFIT PROGRAM.

(a) Indicator.--Section 203(d) of the Federal-State
Extended Unemployment Compensation Act of 1970 (26 U.S.C.
3304 note) is amended, in the flush matter following
paragraph (2), by inserting after the first sentence the
following sentence: ``Effective with respect to compensation
for weeks of unemployment beginning after the date of
enactment of the (or, if later, the date established pursuant
to State law), and ending on or before December 31, 2011, the
State may by law

[[Page S8418]]

provide that the determination of whether there has been a
state `on' or `off' indicator beginning or ending any
extended benefit period shall be made under this subsection
as if the word `two' were `three' in subparagraph (1)(A).''.
(b) Alternative Trigger.--Section 203(f) of the Federal-
State Extended Unemployment Compensation Act of 1970 (26
U.S.C. 3304 note) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following new
paragraph:
``(2) Effective with respect to compensation for weeks of
unemployment beginning after the date of enactment of the
(or, if later, the date established pursuant to State law),
and ending on or before December 31, 2011, the State may by
law provide that the determination of whether there has been
a state `on' or `off' indicator beginning or ending any
extended benefit period shall be made under this subsection
as if the word `either' were `any', the word ``both'' were
`all', and the figure `2' were `3' in clause (1)(A)(ii).''.

Subtitle B--Small Business

SEC. 811. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON
CERTAIN SMALL BUSINESS STOCK.

(a) In General.--Paragraph (4) of section 1202(a) is
amended--
(1) by striking ``January 1, 2011'' and inserting ``January
1, 2012'', and
(2) by inserting ``and 2011'' after ``2010'' in the heading
thereof.
(b) Effective Date.--The amendments made by this section
shall apply to stock acquired after December 31, 2010.

SEC. 812. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL
BUSINESSES CARRIED BACK 5 YEARS.

(a) In General.--Subparagraph (A) of section 39(a)(4) is
amended by inserting ``or 2011'' after ``2010''.
(b) Effective Date.--The amendment made by this section
shall apply to credits determined in taxable years beginning
after December 31, 2010.

SEC. 813. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL
BUSINESSES NOT SUBJECT TO ALTERNATIVE MINIMUM
TAX.

(a) In General.--Paragraph (5) of section 38(c) is
amended--
(1) by inserting ``or 2011'' after ``2010'' in subparagraph
(A), and
(2) by inserting ``or 2011'' after ``2010'' in the heading
thereof.
(b) Effective Date.--The amendments made by this section
shall apply to credits determined in taxable years beginning
after December 31, 2010, and to carrybacks of such credits.

SEC. 814. EXTENSION OF INCREASE IN AMOUNT ALLOWED AS
DEDUCTION FOR START-UP EXPENDITURES.

(a) Start-up Expenditures.--Paragraph (3) of section 195(b)
is amended--
(1) by inserting ``or 2011'' after ``2010'', and
(2) by inserting ``or 2011'' after ``2010'' in the heading
thereof.
(b) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2010.

SEC. 815. EXTENSION OF DEDUCTION FOR HEALTH INSURANCE COSTS
IN COMPUTING SELF-EMPLOYMENT TAXES.

(a) In General.--Paragraph (4) of section 162(l) is amended
by striking ``December 31, 2010'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2010.

Subtitle C--Energy

SEC. 821. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY.

(a) Extension of Credit.--Paragraph (2) of section 30C(g)
is amended by striking ``December 31, 2010'' and inserting
``December 31, 2011.''.
(b) Clarification of Definition of Electric Refueling
Property.--Subparagraph (B) of section 179A(d)(3) is amended
to read as follows:
``(B) exclusively used for the recharging of motor vehicles
propelled by electricity (other than property used for the
generation of electricity).''.
(c) Effective Dates.--
(1) Extension.--The amendment made by subsection (a) shall
apply to property placed in service after December 31, 2010.
(2) Clarification.--The amendment made by subsection (b)
shall apply to property placed in service after the date of
the enactment of this Act.

SEC. 822. ELECTIVE PAYMENT FOR SPECIFIED ENERGY PROPERTY.

(a) In General.--Chapter 65 is amended by adding at the end
the following new subchapter:

``Subchapter C--Direct Payment Provisions

``Sec. 6451. Elective payment for specified energy property.

``SEC. 6451. ELECTIVE PAYMENT FOR SPECIFIED ENERGY PROPERTY.

``(a) Elective Payment.--
``(1) In general.--Any eligible person electing the
application of this section with respect to any specified
energy property originally placed in service by such person
during the taxable year shall be treated as making a payment
against the tax imposed by subtitle A for the taxable year
equal to the applicable percentage of the basis of such
property. Such payment shall be treated as made on the later
of the due date of the return of such tax or the date on
which such return is filed.
``(2) Eligibility.--A person shall not be eligible to elect
the application of this section unless such person has been
certified as eligible by the Secretary, under such rules as
the Secretary, in consultation with the Secretary of Energy,
may prescribe.
``(b) Applicable Percentage.--For purposes of this section,
the term `applicable percentage' means--
``(1) 30 percent in the case of any property described in
paragraph (2)(A)(i) or (5) of section 48(a), and
``(2) 10 percent in the case of any other property.
``(c) Dollar Limitations.--In the case of property
described in paragraph (1), (2), or (3) of section 48(c), the
payment otherwise treated as made under subsection (a) with
respect to such property shall not exceed the limitation
applicable to such property under such paragraph.
``(d) Specified Energy Property.--For purposes of this
section--
``(1) In general.--The term `specified energy property'
means energy property (within the meaning of section 48)
which--
``(A) is originally placed in service before January 1,
2012, or
``(B) is originally placed in service on or after such date
and before the credit termination date with respect to such
property, but only if the construction of such property began
before January 1, 2012.
``(2) Credit termination date.--The term `credit
termination date' means--
``(A) in the case of any energy property which is part of a
facility described in paragraph (1) of section 45(d), January
1, 2013,
``(B) in the case of any energy property which is part of a
facility described in paragraph (2), (3), (4), (6), (7), (9),
or (11) of section 45(d), January 1, 2014, and
``(C) in the case of any energy property described in
section 48(a)(3), January 1, 2017.
In the case of any property which is described in
subparagraph (C) and also in another subparagraph of this
paragraph, subparagraph (C) shall apply with respect to such
property.
``(e) Coordination With Production and Investment
Credits.--In the case of any property with respect to which
an election is made under this section--
``(1) Denial of production and investment credits.--No
credit shall be determined under section 45 or 48 with
respect to such property for the taxable year in which such
property is originally placed in service or any subsequent
taxable year.
``(2) Reduction of payment by progress expenditures already
taken into account.--The amount of the payment treated as
made under subsection (a) with respect to such property shall
be reduced by the aggregate amount of credits determined
under section 48 with respect to such property for all
taxable years preceding the taxable year in which such
property is originally placed in service.
``(f) Special Rules for Certain Non-taxpayers.--
``(1) Denial of payment.--Subsection (a) shall not apply
with respect to any property originally placed in service
by--
``(A) any governmental entity other than a governmental
unit which is a State utility with a service obligation (as
such terms are defined in section 217 of the Federal Power
Act), or
``(B) any organization described in section 501(c) (other
than a mutual or cooperative electric company described in
section 501(c)(12)) or 401(a) and exempt from tax under
section 501(a).
``(2) Exception for property used in unrelated trade or
business.--Paragraph (1) shall not apply with respect to any
property originally placed in service by an entity described
in section 511(a)(2) if substantially all of the income
derived from such property by such entity is unrelated
business taxable income (as defined in section 512).
``(3) Special rules for partnerships and s corporations.--
In the case of property originally placed in service by a
partnership or an S corporation--
``(A) the election under subsection (a) may be made only by
such partnership or S corporation,
``(B) such partnership or S corporation shall be treated as
making the payment referred to in subsection (a) only to the
extent of the proportionate share of such partnership or S
corporation as is owned by persons who would be treated as
making such payment if the property were originally placed in
service by such persons, and
``(C) the return required to be made by such partnership or
S corporation under section 6031 or 6037 (as the case may be)
shall be treated as a return of tax for purposes of
subsection (a).
For purposes of subparagraph (B), rules similar to the rules
of section 168(h)(6) (other than subparagraph (F) thereof)
shall apply. For purposes of applying such rules, the term
`tax-exempt entity' shall not include any entity which is a
governmental unit which is a State utility with a service
obligation (as such terms are defined in section 217 of the
Federal Power Act) or which is a mutual or cooperative
electric company described in section 501(c)(12).
``(g) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Other definitions.--Terms used in this section which
are also used in section 45 or 48 shall have the same
meanings for purposes of this section as when used in such
sections.

[[Page S8419]]

``(2) Application of recapture rules, etc.--Except as
otherwise provided by the Secretary, rules similar to the
rules of section 50 (other than paragraphs (1) and (2) of
subsection (d) thereof), and section 1603 of the American
Recovery and Reinvestment Act of 2009, shall apply.
``(3) Exclusion from gross income.--Any credit or refund
allowed or made by reason of this section shall not be
includible in gross income or alternative minimum taxable
income.
``(4) Exception for certain projects.--Subsection (a) shall
not apply to any governmental unit or cooperative electric
company (as defined in section 54(j)(1)) with respect to any
specified energy property which is described in section
48(a)(5)(D) if such entity has issued any bond--
``(A) which is designated as a clean renewable energy bond
under section 54 of the Internal Revenue Code of 1986 or as a
new clean renewable energy bond under section 54C of such
Code, and
``(B) the proceeds of which are used for expenditures in
connection with the same qualified facility with respect to
which such specified energy property is a part.
``(5) Coordination with grant program.--If a grant under
section 1603 of the American Recovery and Reinvestment Tax
Act of 2009 is made with respect to any specified energy
property--
``(A) no election may be made under subsection (a) with
respect to such property on or after the date of such grant,
and
``(B) if such grant is made after such election, such
property shall be treated as having ceased to be specified
energy property immediately after such property was
originally placed in service.''.
(b) Treatment of Grants for Cooperative Electric
Companies.--Section 501(c)(12) is amended by adding at the
end the following new subparagraph:
``(I) In the case of a mutual or cooperative electric
company described in this paragraph or an organization
described in section 1381(a)(2)(C), subparagraph (A) shall be
applied without taking into account any payment made by
reason of section 6452.''.
(c) Conforming Amendments Related to Direct Payment.--
(1) Subparagraph (A) of section 6211(b)(4)(A) is amended by
inserting ``and subchapter C of chapter 65 (including any
payment treated as made under such subchapter)'' after
``6431''.
(2) Subparagraph (B) of section 6425(c)(1) is amended--
(A) by striking ``the credits'' and inserting ``the sum
of--
``(i) the credits'',
(B) by striking the period at the end of clause (i) thereof
(as amended by this paragraph) and inserting ``, plus'', and
(C) by adding at the end the following new clause:
``(ii) the payments treated as made under subchapter C of
chapter 65.''.
(3) Paragraph (3) of section 6654(f) is amended--
(A) by striking ``the credits'' and inserting ``the sum
of--
``(A) the credits'',
(B) by striking the period at the end of subparagraph (A)
thereof (as amended by this paragraph) and inserting ``,
and'', and
(C) by adding at the end the following new subparagraph:
``(B) the payments treated as made under subchapter C of
chapter 65.''.
(4) Subparagraph (B) of section 6655(g)(1) is amended--
(A) by striking ``the credits'' and inserting ``the sum
of--
``(i) the credits'',
(B) by striking the period at the end of clause (i) thereof
(as amended by this paragraph) and inserting ``, plus'', and
(C) by adding at the end the following new clause:
``(ii) the payments treated as made under subchapter C of
chapter 65.''.
(5) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``, or from the
provisions of subchapter C of chapter 65 of such Code''
before the period at the end.
(6) The table of subchapters for chapter 65 is amended by
adding at the end the following new item:

``subchapter c. direct payment provisions.''.

(d) Clarification of Application of Grants for Specified
Energy Property to Certain Regulated Companies.--The first
sentence of section 1603(f) of the American Recovery and
Reinvestment Tax Act of 2009 is amended by inserting ``(other
than subsection (d)(2) thereof)'' after ``section 50 of the
Internal Revenue Code of 1986''.
(e) Technical Amendments.--
(1) Paragraphs (1) and (2) of section 1603(a) of the
American Recovery and Reinvestment Tax Act of 2009 are each
amended by striking ``is placed in service'' and inserting
``is originally placed in service by such person''.
(2) Paragraph (1) of section 1603(d) of such Act is
amended--
(A) by striking ``(within the meaning of section 45 of such
Code)'', and
(B) by inserting before the period at the end the
following: ``which would (but for section 48(d)(1) of such
Code) be eligible for credit under section 45 of such Code
(determined without regard to subsection (a)(2)(B)
thereof)''.
(3) Subsection (f) of section 1603 of such Act, as amended
by subsection (d), is amended--
(A) by striking the second sentence and inserting the
following: ``In applying such rules, any increase in tax
under chapter 1 of such Code by reason of the property being
disposed of (or otherwise ceasing to be specified energy
property) shall be imposed on the person to whom the grant
was made.'',
(B) by striking ``In making grants under'' and inserting
the following:
``(1) In general.--In making grants under'', and
(C) by adding at the end following new paragraph:
``(2) Special rules.--
``(A) Recapture of excessive grant amounts.--If the amount
of a grant made under this section exceeds the amount
allowable as a grant under this section, such excess shall be
recaptured under paragraph (1) as if the property to which
such grant relates were disposed of immediately after such
grant was made.
``(B) Grant information not treated as return
information.--For purposes of section 6103 of the Internal
Revenue Code of 1986, in no event shall any of the following
be treated as return information:
``(i) The amount of a grant made under subsection (a).
``(ii) The identity of the person to whom the grant was
made.
``(iii) A description of the property with respect to which
the grant was made.
``(iv) The fact and amount of any recapture.
``(v) The content of any report required by the Secretary
of the Treasury to be filed in connection with the grant.''.
(4) Subsection (g) of section 1603 of such Act is amended--
(A) by redesignating paragraphs (1) through (4) as
subparagraphs (A) through (D), respectively,
(B) by moving such subparagraphs (as so redesignated) 2 ems
to the right,
(C) by striking ``paragraph (1), (2), or (3)'' in
subparagraph (D) (as so redesignated) and inserting
``subparagraphs (A), (B), or (C)'',
(D) by striking ``The Secretary'' and inserting the
following:
``(1) In general.--Except as provided in paragraph (2), the
Secretary'', and
(E) by adding at the end the following new paragraph:
``(2) Exception where property used in unrelated trade or
business.--
``(A) In general.--Paragraph (1) shall not apply to any
person or entity described therein to the extent the grant is
with respect to unrelated trade or business property.
``(B) Unrelated trade or business property.--For purposes
of this paragraph, the term `unrelated trade or business
property' means any property with respect to which
substantially all of the income derived therefrom by an
organization described in section 511(a)(2) of the Internal
Revenue Code of 1986 is subject to tax under section 511 of
such Code.
``(C) Information with respect to pass-thrus.--In the case
of a partnership or other pass-thru entity, partners or other
holders of an equity or profits interest must provide to such
partnership or entity such information as the Secretary may
require to carry out the purposes of this subsection.''.
(f) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to property
originally placed in service after the date of the enactment
of this Act.
(2) Clarification and technical amendments.--The amendments
made by subsections (d) and (e) shall take effect as if
included in section 1603 of the American Recovery and
Reinvestment Tax Act of 2009.

SEC. 823. QUALIFYING ADVANCED ENERGY PROJECT CREDIT.

(a) In General.--Section 48C(d)(1)(B) is amended by
striking ``$2,300,000,000'' and inserting ``$4,800,000,000''.
(b) Effective Date.--The amendment made by this section
shall apply to allocations for applications submitted after
December 31, 2010.

SEC. 824. NEW CLEAN RENEWABLE ENERGY BONDS.

(a) In General.--Subsection (c) of section 54C is amended
by adding at the end the following new paragraph:
``(5) Second additional limitation.--Subject to paragraph
(4), the national new clean renewable energy bond limitation
shall be increased by $1,600,000,000. Such increase shall be
allocated by the Secretary consistent with the rules of
paragraphs (2) and (3).''.
(b) Effective Date.--The amendment made by this section
shall apply to allocations after December 31, 2010.

SEC. 825. ALTERNATIVE MOTOR VEHICLE CREDIT FOR NEW QUALIFIED
ALTERNATIVE FUEL VEHICLES.

(a) In General.--Paragraph (4) of section 30B(k) is amended
by striking ``December 31, 2010'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to property purchased after December 31, 2010.

SEC. 826. EXTENSION OF PROVISIONS RELATED TO ALCOHOL USED AS
FUEL.

(a) Extension of Income Tax Credit for Alcohol Used as
Fuel.--
(1) In general.--Paragraph (1) of section 40(e) is
amended--
(A) by striking ``December 31, 2010'' in subparagraph (A)
and inserting ``December 31, 2011'', and

[[Page S8420]]

(B) by striking ``January 1, 2011'' in subparagraph (B) and
inserting ``January 1, 2012''.
(2) Reduced amount for ethanol blenders.--Subsection (h) of
section 40 is amended--
(A) by striking ``2010'' in paragraph (1) and inserting
``2011'', and
(B) by striking the period at the end of the table
contained in paragraph (2) and adding the following new item:

------------------------------------------------------------------------

------------------------------------------------------------------------
``2011..........................  36 cents..........  26.66 cents.''.
------------------------------------------------------------------------

(3) Reduced rate for small ethanol producers.--Section
40(b)(4)(A) is amended by striking ``10 cents'' and inserting
``8 cents''.
(4) Effective date.--
(A) In general.--Except as provided in subparagraph (B),
the amendments made by this subsection shall apply to periods
after December 31, 2010.
(B) Rate for small ethanol producers.--The amendment made
by paragraph (3) shall apply to the sale or use of alcohol
after December 31, 2010.
(b) Extension of Excise Tax Credit for Alcohol Used as
Fuel.--
(1) In general.--Paragraph (6) of section 6426(b) is
amended by striking ``December 31, 2010'' and inserting
``December 31, 2011''.
(2) Reduced applicable amount for ethanol.--Subparagraph
(A) of section 6426(b)(2) is amended--
(A) by striking ``and'' at the end of clause (i),
(B) in clause (ii)--
(i) by inserting ``and before 2011'' after ``after 2008'',
and
(ii) by striking the period and inserting ``, and'', and
(C) by adding at the end the following new clause:
``(iii) in the case of calendar years beginning after 2010,
36 cents.''.
(3) Effective date.--The amendments made by this subsection
shall apply to periods after December 31, 2010.
(c) Extension of Payment for Alcohol Fuel Mixture.--
(1) In general.--Subparagraph (A) of section 6427(e)(6) is
amended by striking ``December 31, 2010'' and inserting
``December 31, 2011''.
(2) Effective date.--The amendment made by this subsection
shall apply to sales and uses after December 31, 2010.
(d) Extension of Additional Duties on Ethanol.--
(1) In general.--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 ``1/1/
2011'' and inserting ``1/1/2012''.
(2) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2011.

SEC. 827. ENERGY EFFICIENT APPLIANCE CREDIT.

(a) Dishwashers.--Paragraph (1) of section 45M(b) is
amended by striking ``and'' at the end of subparagraph (A),
by striking the period at the end of subparagraph (B) and
inserting a comma, and by adding at the end the following new
subparagraphs:
``(C) $25 in the case of a dishwasher which is manufactured
in calendar year 2011 and which uses no more than 307
kilowatt hours per year and 5.0 gallons per cycle (5.5
gallons per cycle for dishwashers designed for greater than
12 place settings),
``(D) $50 in the case of a dishwasher which is manufactured
in calendar year 2011 and which uses no more than 295
kilowatt hours per year and 4.25 gallons per cycle (4.75
gallons per cycle for dishwashers designed for greater than
12 place settings), and
``(E) $75 in the case of a dishwasher which is manufactured
in calendar year 2011 and which uses no more than 280
kilowatt hours per year and 4 gallons per cycle (4.5 gallons
per cycle for dishwashers designed for greater than 12 place
settings).''.
(b) Clothes Washers.--Paragraph (2) of section 45M(b) is
amended by striking ``and'' at the end of subparagraph (C),
by striking the period at the end of subparagraph (D) and
inserting a comma, and by adding at the end the following new
subparagraphs:
``(E) $175 in the case of a top-loading clothes washer
manufactured in calendar year 2011 which meets or exceeds a
2.2 modified energy factor and does not exceed a 4.5 water
consumption factor, and
``(F) $225 in the case of a clothes washer manufactured in
calendar year 2011--
``(i) which is a top-loading clothes washer and which meets
or exceeds a 2.4 modified energy factor and does not exceed a
4.2 water consumption factor, or
``(ii) which is a front-loading clothes washer and which
meets or exceeds a 2.8 modified energy factor and does not
exceed a 3.5 water consumption factor.''.
(c) Refrigerators.--Paragraph (3) of section 45M(b) is
amended by striking ``and'' at the end of subparagraph (C),
by striking the period at the end of subparagraph (D) and
inserting a comma, and by adding at the end the following new
subparagraphs:
``(E) $150 in the case of a refrigerator manufactured in
calendar year 2011 which consumes at least 30 percent less
energy than the 2001 energy conservation standards, and
``(F) $200 in the case of a refrigerator manufactured in
calendar year 2011 which consumes at least 35 percent less
energy than the 2001 energy conservation standards.''.
(d) Rebasing of Limitations.--
(1) In general.--Paragraph (1) of section 45M(e) is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2010''.
(2) Exception for certain refrigerators and clothes
washers.--Paragraph (2) of section 45M(e) is amended--
(A) by striking ``subsection (b)(3)(D)'' and inserting
``subsection (b)(3)(F)'', and
(B) by striking ``subsection (b)(2)(D)'' and inserting
``subsection (b)(2)(F)''.
(3) Gross receipts limitation.--Paragraph (3) of section
45M(e) is amended by striking ``2 percent'' and inserting ``4
percent''.
(e) Direct Payment of Energy Efficient Appliances Tax
Credit.--In the case of any taxable year which includes the
last day of calendar year 2009 or calendar year 2010, a
taxpayer who elects to waive the credit which would otherwise
be determined with respect to the taxpayer under section 45M
of the Internal Revenue Code of 1986 for such taxable year
shall be treated as making a payment against the tax imposed
under subtitle A of such Code for such taxable year in an
amount equal to 85 percent of the amount of the credit which
would otherwise be so determined. Such payment shall be
treated as made on the later of the due date of the return of
such tax or the date on which such return is filed. Elections
under this section may be made separately for 2009 and 2010,
but once made shall be irrevocable. No amount shall be
includible in gross income or alternative minimum taxable
income by reason of this section.
(f) Effective Dates.--
(1) In general.--The amendments made by subsections (a),
(b), and (c) shall apply to appliances produced after
December 31, 2010.
(2) Limitations.--The amendments made by subsection (d)
shall apply to taxable years beginning after December 31,
2010.

SEC. 828. REDUCED DEPRECIATION PERIOD FOR NATURAL GAS
DISTRIBUTION FACILITIES.

(a) In General.--Clause (viii) of section 168(e)(3)(E) is
amended by striking ``January 1, 2011'' and inserting
``January 1, 2012''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2010.

Subtitle D--Education

SEC. 831. QUALIFIED SCHOOL CONSTRUCTION BONDS.

(a) In General.--Subsection (c) of section 54F is amended--
(1) by striking ``and'' at the end of paragraph (2),
(2) by redesignating paragraph (3) as paragraph (4),
(3) by inserting after paragraph (2) the following new
paragraph:
``(3) $11,000,000,000 for 2011, and'', and
(4) by striking ``2010'' in paragraph (4) (as redesignated
by paragraph (2)) and inserting ``2011''.
(b) Effective Date.--The amendments made by this section
shall apply to obligations issued after December 31, 2010.

Subtitle E--Other Employee and Housing Relief

SEC. 841. MAKING WORK PAY CREDIT.

(a) In General.--Section 36A(e) is amended by striking
``December 31, 2010'' and inserting ``December 31, 2011''.
(b) Treatment of Possessions.--Section 1001(b)(1) of the
American Recovery and Reinvestment Tax Act of 2009 is amended
by striking ``2009 and 2010'' both places it appears and
inserting ``2009, 2010, and 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.

SEC. 842. WORK OPPORTUNITY CREDIT.

(a) In General.--Subparagraph (B) of section 51(c)(4) is
amended by striking ``August 31, 2011'' and inserting
``December 31, 2011''.
(b) Unemployed Veterans and Disconnected Youth.--Paragraph
(14) of section 51(d) is amended--
(1) by striking ``2009 or 2010'' in subparagraph (A) and
inserting ``2009, 2010, or 2011'', and
(2) by striking ``2009 or 2010'' in the heading thereof and
inserting ``2009, 2010, or 2011''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to individuals who begin work for the employer after
the date of the enactment of this Act.
(2) Unemployed veterans and disconnected youth.--The
amendments made by subsection (b) shall apply to individuals
who begin work for the employer after December 31, 2010.

SEC. 843. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO
VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL
RESPONDERS.

(a) In General.--Subsection (d) of section 139B is amended
by striking ``December 31, 2010'' and inserting ``December
31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2010.

SEC. 844. PARITY FOR EXCLUSION FROM INCOME FOR EMPLOYER-
PROVIDED MASS TRANSIT AND PARKING BENEFITS.

(a) In General.--Paragraph (2) of section 132(f) is amended
by striking ``January 1, 2011'' and inserting ``January 1,
2012''.
(b) Effective Date.--The amendment made by this section
shall apply to months after December 31, 2010.

[[Page S8421]]

SEC. 845. QUALIFIED MORTGAGE BONDS FOR REFINANCING OF
SUBPRIME LOANS.

(a) In General.--Subparagraph (D) of section 143(k)(12) is
amended by striking ``December 31, 2010'' and inserting
``December 31, 2011''.
(b) Effective Date.--The amendment made by this section
shall apply to bonds issued after December 31, 2010.

TITLE IX--OTHER PROVISIONS

SEC. 901. REPEAL OF EXPANSION OF INFORMATION REPORTING
REQUIREMENTS.

(a) Repeal of Payments for Property and Other Gross
Proceeds.--Subsection (b) of section 9006 of the Patient
Protection and Affordable Care Act, and the amendments made
thereby, are hereby repealed; and the Internal Revenue Code
of 1986 shall be applied as if such subsection, and
amendments, had never been enacted.
(b) Repeal of Application to Corporations; Application of
Regulatory Authority.--
(1) In general.--Section 6041 of the Internal Revenue Code
of 1986, as amended by section 9006(a) of the Patient
Protection and Affordable Care Act and section 2101 of the
Small Business Jobs Act of 2010, is amended by striking
subsections (i) and (j) and inserting the following new
subsection:
``(i) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be appropriate or
necessary to carry out the purposes of this section,
including rules to prevent duplicative reporting of
transactions.''.
(2) Effective date.--The amendments made by this subsection
shall apply to payments made after December 31, 2010.

SEC. 902. REPEAL OF SUNSET ON TAX TREATMENT OF ALASKA NATIVE
SETTLEMENT TRUSTS.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 671 of such Act
(relating to tax treatment and information requirements of
Alaska Native Settlement Trusts).

SEC. 903. REPEAL OF SUNSET ON EXPANSION OF AUTHORITY TO
POSTPONE CERTAIN TAX-RELATED DEADLINES.

Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (relating to sunset of provisions
of such Act) shall not apply to section 802 of such Act
(relating to expansion of authority to postpone certain tax-
related deadlines by reason of Presidentially declared
disaster).

SEC. 904. REFUNDS DISREGARDED IN THE ADMINISTRATION OF
FEDERAL PROGRAMS AND FEDERALLY ASSISTED
PROGRAMS.

(a) In General.--Subchapter A of chapter 65 is amended by
adding at the end the following new section:

``SEC. 6409. REFUNDS DISREGARDED IN THE ADMINISTRATION OF
FEDERAL PROGRAMS AND FEDERALLY ASSISTED
PROGRAMS.

``Notwithstanding any other provision of law, any refund
(or advance payment with respect to a refundable credit) made
to any individual under this title shall not be taken into
account as income, and shall not be taken into account as
resources for a period of 12 months from receipt, for
purposes of determining the eligibility of such individual
(or any other individual) for benefits or assistance (or the
amount or extent of benefits or assistance) under any Federal
program or under any State or local program financed in whole
or in part with Federal funds.''.
(b) Clerical Amendment.--The table of sections for such
subchapter is amended by adding at the end the following new
item:

``Sec. 6409. Refunds disregarded in the administration of Federal
programs and federally assisted programs.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts received after December 31, 2009.

SEC. 905. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION
EXCHANGED FOR ASSETS IN CERTAIN
REORGANIZATIONS.

(a) In General.--Section 361 (relating to nonrecognition of
gain or loss to corporations; treatment of distributions) is
amended by adding at the end the following new subsection:
``(d) Special Rules for Transactions Involving Section 355
Distributions.--In the case of a reorganization described in
section 368(a)(1)(D) with respect to which stock or
securities of the corporation to which the assets are
transferred are distributed in a transaction which qualifies
under section 355--
``(1) this section shall be applied by substituting `stock
other than nonqualified preferred stock (as defined in
section 351(g)(2))' for `stock or securities' in subsections
(a) and (b)(1), and
``(2) the first sentence of subsection (b)(3) shall apply
only to the extent that the sum of the money and the fair
market value of the other property transferred to such
creditors does not exceed the adjusted bases of such assets
transferred (reduced by the amount of the liabilities assumed
(within the meaning of section 357(c))).''.
(b) Conforming Amendment.--Paragraph (3) of section 361(b)
is amended by striking the last sentence.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to exchanges
after December 31, 2010.
(2) Transition rule.--The amendments made by this section
shall not apply to any exchange pursuant to a transaction
which is--
(A) made pursuant to a written agreement which was binding
on December 31, 2010, and at all times thereafter,
(B) described in a ruling request submitted to the Internal
Revenue Service on or before December 2, 2010, or
(C) described on or before December 31, 2010, in a public
announcement or in a filing with the Securities and Exchange
Commission.

TITLE X--BUDGETARY PROVISIONS

SEC. 1001. DETERMINATION OF BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
`Budgetary Effects of PAYGO Legislation' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the Senate Budget Committee, provided that such
statement has been submitted prior to the vote on passage.

SEC. 1002. EMERGENCY DESIGNATIONS.

(a) Statutory Paygo.--The provisions of this Act other than
those that qualify for the current policy adjustments under
section 7 of the Statutory Pay-As-You-Go Act of 2010 (Public
Law 111-139; 2 U.S.C. 933(g)) are designated as an emergency
requirement pursuant to section 4(g) of such Act (Public Law
111-139; 2 U.S.C. 933(g)).
(b) House of Representatives.--In the House of
Representatives, this Act is designated as an emergency for
purposes of pay-as-you-go principles.
(c) Senate.--In the Senate, this Act is designated as an
emergency requirement pursuant to section 403(a) of S. Con.
Res. 13 (111th Congress), the concurrent resolution on the
budget for fiscal year 2010.
______