[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3997 Engrossed Amendment Senate (EAS)]
In the Senate of the United States,
December 19, 2007.
Resolved, That the Senate agree to the amendment of the House of
Representatives to the amendment of the Senate to the bill (H.R. 3997)
entitled ``An Act to amend the Internal Revenue Code of 1986 to provide
earnings assistance and tax relief to members of the uniformed
services, volunteer firefighters, and Peace Corps volunteers, and for
other purposes.'', with the following
SENATE AMENDMENT TO HOUSE AMENDMENT TO SENATE AMENDMENT:
In lieu of the matter proposed to be inserted by the
amendment of the House to the amendment of the Senate, insert the
following:
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Defenders of
Freedom Tax Relief Act of 2007''.
(b) Reference.--Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--BENEFITS FOR MILITARY
Sec. 101. Election to include combat pay as earned income for purposes
of earned income tax credit.
Sec. 102. Modification of mortgage revenue bonds for veterans.
Sec. 103. Survivor and disability payments with respect to qualified
military service.
Sec. 104. Treatment of differential military pay as wages.
Sec. 105. Special period of limitation when uniformed services retired
pay is reduced as a result of award of
disability compensation.
Sec. 106. Distributions from retirement plans to individuals called to
active duty.
Sec. 107. Disclosure of return information relating to veterans
programs made permanent.
Sec. 108. Contributions of military death gratuities to Roth IRAs and
Education Savings Accounts.
Sec. 109. Suspension of 5-year period during service with the Peace
Corps.
Sec. 110. Credit for employer differential wage payments to employees
who are active duty members of the
uniformed services.
Sec. 111. State payments to service members treated as qualified
military benefits.
Sec. 112. Permanent exclusion of gain from sale of a principal
residence by certain employees of the
intelligence community.
Sec. 113. Special disposition rules for unused benefits in health
flexible spending arrangements of
individuals called to active duty.
Sec. 114. Option to exclude military basic housing allowance for
purposes of determining income eligibility
under low-income housing credit and bond-
financed residential rental projects.
TITLE II--REVENUE PROVISIONS
Sec. 201. Increase in penalty for failure to file partnership returns.
Sec. 202. Increase in penalty for failure to file S corporation
returns.
Sec. 203. Increase in minimum penalty on failure to file a return of
tax.
Sec. 204. Revision of tax rules on expatriation.
Sec. 205. Special enrollment option by employer health plans for
members of uniform services who lose health
care coverage.
TITLE III--TAX TECHNICAL CORRECTIONS
Sec. 301. Short title.
Sec. 302. Amendment related to the Tax Relief and Health Care Act of
2006.
Sec. 303. Amendments related to title XII of the Pension Protection Act
of 2006.
Sec. 304. Amendments related to the Tax Increase Prevention and
Reconciliation Act of 2005.
Sec. 305. Amendments related to the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A
Legacy for Users.
Sec. 306. Amendments related to the Energy Policy Act of 2005.
Sec. 307. Amendments related to the American Jobs Creation Act of 2004.
Sec. 308. Amendments related to the Economic Growth and Tax Relief
Reconciliation Act of 2001.
Sec. 309. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 310. Amendment related to the Internal Revenue Service
Restructuring and Reform Act of 1998.
Sec. 311. Clerical corrections.
TITLE IV--PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH
BENEFITS
Sec. 401. Parity in application of certain limits to mental health
benefits.
TITLE I--BENEFITS FOR MILITARY
SEC. 101. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR PURPOSES
OF EARNED INCOME TAX CREDIT.
(a) In General.--Clause (vi) of section 32(c)(2)(B) (defining
earned income) is amended to read as follows:
``(vi) a taxpayer may elect to treat
amounts excluded from gross income by reason of
section 112 as earned income.''.
(b) Sunset Not Applicable.--Section 105 of the Working Families Tax
Relief Act of 2004 (relating to application of EGTRRA sunset to this
title) shall not apply to section 104(b) of such Act.
(c) Effective Date.--The amendment made by this section shall apply
to taxable years ending after December 31, 2007.
SEC. 102. MODIFICATION OF MORTGAGE REVENUE BONDS FOR VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer Requirement.--
Subparagraph (D) of section 143(d)(2) (relating to exceptions) is
amended by striking ``and before January 1, 2008''.
(b) Increase in Bond Limitation for Alaska, Oregon, and
Wisconsin.--Clause (ii) of section 143(l)(3)(B) (relating to State
veterans limit) is amended by striking ``$25,000,000'' each place it
appears and inserting ``$100,000,000''.
(c) Definition of Qualified Veteran.--Paragraph (4) of section
143(l) (defining qualified veteran) is amended to read as follows:
``(4) Qualified veteran.--For purposes of this subsection,
the term `qualified veteran' means any veteran who--
``(A) served on active duty, and
``(B) applied for the financing before the date 25
years after the last date on which such veteran left
active service.''.
(d) Effective Date.--The amendments made by this section shall
apply to bonds issued after December 31, 2007.
SEC. 103. SURVIVOR AND DISABILITY PAYMENTS WITH RESPECT TO QUALIFIED
MILITARY SERVICE.
(a) Plan Qualification Requirement for Death Benefits Under USERRA-
Qualified Active Military Service.--Subsection (a) of section 401
(relating to requirements for qualification) is amended by inserting
after paragraph (36) the following new paragraph:
``(37) Death benefits under userra-qualified active
military service.--A trust shall not constitute a qualified
trust unless the plan provides that, in the case of a
participant who dies while performing qualified military
service (as defined in section 414(u)), the survivors of the
participant are entitled to any additional benefits (other than
benefit accruals relating to the period of qualified military
service) provided under the plan had the participant resumed
and then terminated employment on account of death.''.
(b) Treatment in the Case of Death or Disability Resulting From
Active Military Service for Benefit Accrual Purposes.--Subsection (u)
of section 414 (relating to special rules relating to veterans'
reemployment rights under USERRA) is amended by redesignating
paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and
by inserting after paragraph (8) the following new paragraph:
``(9) Treatment in the case of death or disability
resulting from active military service.--
``(A) In general.--For benefit accrual purposes, an
employer sponsoring a retirement plan may treat an
individual who dies or becomes disabled (as defined
under the terms of the plan) while performing qualified
military service with respect to the employer
maintaining the plan as if the individual has resumed
employment in accordance with the individual's
reemployment rights under chapter 43 of title 38,
United States Code, on the day preceding death or
disability (as the case may be) and terminated
employment on the actual date of death or disability.
In the case of any such treatment, and subject to
subparagraphs (B) and (C), any full or partial
compliance by such plan with respect to the benefit
accrual requirements of paragraph (8) with respect to
such individual shall be treated for purposes of
paragraph (1) as if such compliance were required under
such chapter 43.
``(B) Nondiscrimination requirement.--Subparagraph
(A) shall apply only if all individuals performing
qualified military service with respect to the employer
maintaining the plan (as determined under subsections
(b), (c), (m), and (o)) who die or became disabled as a
result of performing qualified military service prior
to reemployment by the employer are credited with
service and benefits on reasonably equivalent terms.
``(C) Determination of benefits.--The amount of
employee contributions and the amount of elective
deferrals of an individual treated as reemployed under
subparagraph (A) for purposes of applying paragraph
(8)(C) shall be determined on the basis of the
individual's average actual employee contributions or
elective deferrals for the lesser of--
``(i) the 12-month period of service with
the employer immediately prior to qualified
military service, or
``(ii) if service with the employer is less
than such 12-month period, the actual length of
continuous service with the employer.''.
(c) Conforming Amendments.--
(1) Section 404(a)(2) is amended by striking ``and (31)''
and inserting ``(31), and (37)''.
(2) Section 403(b) is amended by adding at the end the
following new paragraph:
``(14) Death benefits under userra-qualified active
military service.--This subsection shall not apply to an
annuity contract unless such contract meets the requirements of
section 401(a)(37).''.
(3) Section 457(g) is amended by adding at the end the
following new paragraph:
``(4) Death benefits under userra-qualified active military
service.--A plan described in paragraph (1) shall not be
treated as an eligible deferred compensation plan unless such
plan meets the requirements of section 401(a)(37).''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to deaths and disabilities occurring on or
after January 1, 2007.
(2) Provisions relating to plan amendments.--
(A) In general.--If this subparagraph applies to
any plan or contract amendment, such plan or contract
shall be treated as being operated in accordance with
the terms of the plan during the period described in
subparagraph (B)(iii).
(B) Amendments to which subparagraph (A) applies.--
(i) In general.--Subparagraph (A) shall
apply to any amendment to any plan or annuity
contract which is made--
(I) pursuant to the amendments made
by subsection (a) or pursuant to any
regulation issued by the Secretary of
the Treasury under subsection (a), and
(II) on or before the last day of
the first plan year beginning on or
after January 1, 2009.
In the case of a governmental plan (as defined
in section 414(d) of the Internal Revenue Code
of 1986), this clause shall be applied by
substituting ``2011'' for ``2009'' in subclause
(II).
(ii) Conditions.--This paragraph shall not
apply to any amendment unless--
(I) the plan or contract is
operated as if such plan or contract
amendment were in effect for the period
described in clause (iii), and
(II) such plan or contract
amendment applies retroactively for
such period.
(iii) Period described.--The period
described in this clause is the period--
(I) beginning on the effective date
specified by the plan, and
(II) ending on the date described
in clause (i)(II) (or, if earlier, the
date the plan or contract amendment is
adopted).
SEC. 104. TREATMENT OF DIFFERENTIAL MILITARY PAY AS WAGES.
(a) Income Tax Withholding on Differential Wage Payments.--
(1) In general.--Section 3401 (relating to definitions) is
amended by adding at the end the following new subsection:
``(h) Differential Wage Payments to Active Duty Members of the
Uniformed Services.--
``(1) In general.--For purposes of subsection (a), any
differential wage payment shall be treated as a payment of
wages by the employer to the employee.
``(2) Differential wage payment.--For purposes of paragraph
(1), the term `differential wage payment' means any payment
which--
``(A) is made by an employer to an individual with
respect to any period during which the individual is
performing service in the uniformed services (as
defined in chapter 43 of title 38, United States Code)
while on active duty for a period of more than 30 days,
and
``(B) represents all or a portion of the wages the
individual would have received from the employer if the
individual were performing service for the employer.''.
(2) Effective date.--The amendment made by this subsection
shall apply to remuneration paid after December 31, 2007.
(b) Treatment of Differential Wage Payments for Retirement Plan
Purposes.--
(1) Pension plans.--
(A) In general.--Section 414(u) (relating to
special rules relating to veterans' reemployment rights
under USERRA), as amended by section 103(b), is amended
by adding at the end the following new paragraph:
``(12) Treatment of differential wage payments.--
``(A) In general.--Except as provided in this
paragraph, for purposes of applying this title to a
retirement plan to which this subsection applies--
``(i) an individual receiving a
differential wage payment shall be treated as
an employee of the employer making the payment,
``(ii) the differential wage payment shall
be treated as compensation, and
``(iii) the plan shall not be treated as
failing to meet the requirements of any
provision described in paragraph (1)(C) by
reason of any contribution or benefit which is
based on the differential wage payment.
``(B) Special rule for distributions.--
``(i) In general.--Notwithstanding
subparagraph (A)(i), for purposes of section
401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii),
403(b)(11)(A), or 457(d)(1)(A)(ii), an
individual shall be treated as having been
severed from employment during any period the
individual is performing service in the
uniformed services described in section
3401(h)(2)(A).
``(ii) Limitation.--If an individual elects
to receive a distribution by reason of clause
(i), the plan shall provide that the individual
may not make an elective deferral or employee
contribution during the 6-month period
beginning on the date of the distribution.
``(C) Nondiscrimination requirement.--Subparagraph
(A)(iii) shall apply only if all employees of an
employer (as determined under subsections (b), (c),
(m), and (o)) performing service in the uniformed
services described in section 3401(h)(2)(A) are
entitled to receive differential wage payments on
reasonably equivalent terms and, if eligible to
participate in a retirement plan maintained by the
employer, to make contributions based on the payments
on reasonably equivalent terms. For purposes of
applying this subparagraph, the provisions of
paragraphs (3), (4), and (5) of section 410(b) shall
apply.
``(D) Differential wage payment.--For purposes of
this paragraph, the term `differential wage payment'
has the meaning given such term by section
3401(h)(2).''.
(B) Conforming amendment.--The heading for section
414(u) is amended by inserting ``and to Differential
Wage Payments to Members on Active Duty'' after
``USERRA''.
(2) Differential wage payments treated as compensation for
individual retirement plans.--Section 219(f)(1) (defining
compensation) is amended by adding at the end the following new
sentence: ``The term compensation includes any differential
wage payment (as defined in section 3401(h)(2)).''.
(3) Effective date.--The amendments made by this subsection
shall apply to years beginning after December 31, 2007.
(c) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any plan or
annuity contract amendment, such plan or contract shall be
treated as being operated in accordance with the terms of the
plan or contract during the period described in paragraph
(2)(B)(i).
(2) Amendments to which section applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is
made--
(i) pursuant to any amendment made by
subsection (b)(1), and
(ii) on or before the last day of the first
plan year beginning on or after January 1,
2009.
In the case of a governmental plan (as defined in
section 414(d) of the Internal Revenue Code of 1986),
this subparagraph shall be applied by substituting
``2011'' for ``2009'' in clause (ii).
(B) Conditions.--This subsection shall not apply to
any plan or annuity contract amendment unless--
(i) during the period beginning on the date
the amendment described in subparagraph (A)(i)
takes effect and ending on the date described
in subparagraph (A)(ii) (or, if earlier, the
date the plan or contract amendment is
adopted), the plan or contract is operated as
if such plan or contract amendment were in
effect, and
(ii) such plan or contract amendment
applies retroactively for such period.
SEC. 105. SPECIAL PERIOD OF LIMITATION WHEN UNIFORMED SERVICES RETIRED
PAY IS REDUCED AS A RESULT OF AWARD OF DISABILITY
COMPENSATION.
(a) In General.--Subsection (d) of section 6511 (relating to
special rules applicable to income taxes) is amended by adding at the
end the following new paragraph:
``(8) Special rules when uniformed services retired pay is
reduced as a result of award of disability compensation.--
``(A) Period of limitation on filing claim.--If the
claim for credit or refund relates to an overpayment of
tax imposed by subtitle A on account of--
``(i) the reduction of uniformed services
retired pay computed under section 1406 or 1407
of title 10, United States Code, or
``(ii) the waiver of such pay under section
5305 of title 38 of such Code,
as a result of an award of compensation under title 38
of such Code pursuant to a determination by the
Secretary of Veterans Affairs, the 3-year period of
limitation prescribed in subsection (a) shall be
extended, for purposes of permitting a credit or refund
based upon the amount of such reduction or waiver,
until the end of the 1-year period beginning on the
date of such determination.
``(B) Limitation to 5 taxable years.--Subparagraph
(A) shall not apply with respect to any taxable year
which began more than 5 years before the date of such
determination.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to claims for credit or refund filed after the date of the
enactment of this Act.
(c) Transition Rules.--In the case of a determination described in
paragraph (8) of section 6511(d) of the Internal Revenue Code of 1986
(as added by this section) which is made by the Secretary of Veterans
Affairs after December 31, 2000, and before the date of the enactment
of this Act, such paragraph--
(1) shall not apply with respect to any taxable year which
began before January 1, 2001, and
(2) shall be applied by substituting ``the date of the
enactment of the Defenders of Freedom Tax Relief Act of 2007''
for ``the date of such determination'' in subparagraph (A)
thereof.
SEC. 106. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS CALLED TO
ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is amended by
striking ``, and before December 31, 2007''.
(b) Effective Date.--The amendment made by this section shall apply
to individuals ordered or called to active duty on or after December
31, 2007.
SEC. 107. DISCLOSURE OF RETURN INFORMATION RELATING TO VETERANS
PROGRAMS MADE PERMANENT.
(a) In General.--Subparagraph (D) of section 6103(l)(7) (relating
to disclosure of return information to Federal, State, and local
agencies administering certain programs under the Social Security Act,
the Food Stamp Act of 1977, or title 38, United States Code or certain
housing assistance programs) is amended by striking the last sentence.
(b) Technical Amendment.--Section 6103(l)(7)(D)(viii)(III) is
amended by striking ``sections 1710(a)(1)(I), 1710(a)(2), 1710(b), and
1712(a)(2)(B)'' and inserting ``sections 1710(a)(2)(G), 1710(a)(3), and
1710(b)''.
SEC. 108. CONTRIBUTIONS OF MILITARY DEATH GRATUITIES TO ROTH IRAS AND
EDUCATION SAVINGS ACCOUNTS.
(a) Provision in Effect Before Pension Protection Act.--Subsection
(e) of section 408A (relating to qualified rollover contribution), as
in effect before the amendments made by section 824 of the Pension
Protection Act of 2006, is amended to read as follows:
``(e) Qualified Rollover Contribution.--For purposes of this
section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution to a Roth IRA from
another such account, or from an individual retirement plan,
but only if such rollover contribution meets the requirements
of section 408(d)(3). Such term includes a rollover
contribution described in section 402A(c)(3)(A). For purposes
of section 408(d)(3)(B), there shall be disregarded any
qualified rollover contribution from an individual retirement
plan (other than a Roth IRA) to a Roth IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before
the end of the 1-year period beginning on the date on
which such individual receives an amount under section
1477 of title 10, United States Code, or section 1967
of title 38 of such Code, with respect to a person, to
the extent that such contribution does not exceed--
``(i) the sum of the amounts received
during such period by such individual under
such sections with respect to such person,
reduced by
``(ii) the amounts so received which were
contributed to a Coverdell education savings
account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to
apply.--Section 408(d)(3)(B) shall not apply with
respect to amounts treated as a rollover by
subparagraph (A).
``(C) Application of section 72.--For purposes of
applying section 72 in the case of a distribution which
is not a qualified distribution, the amount treated as
a rollover by reason of subparagraph (A) shall be
treated as investment in the contract.''.
(b) Provision in Effect After Pension Protection Act.--Subsection
(e) of section 408A, as in effect after the amendments made by section
824 of the Pension Protection Act of 2006, is amended to read as
follows:
``(e) Qualified Rollover Contribution.--For purposes of this
section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution--
``(A) to a Roth IRA from another such account,
``(B) from an eligible retirement plan, but only
if--
``(i) in the case of an individual
retirement plan, such rollover contribution
meets the requirements of section 408(d)(3),
and
``(ii) in the case of any eligible
retirement plan (as defined in section
402(c)(8)(B) other than clauses (i) and (ii)
thereof), such rollover contribution meets the
requirements of section 402(c), 403(b)(8), or
457(e)(16), as applicable.
For purposes of section 408(d)(3)(B), there shall be
disregarded any qualified rollover contribution from an
individual retirement plan (other than a Roth IRA) to a
Roth IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before
the end of the 1-year period beginning on the date on
which such individual receives an amount under section
1477 of title 10, United States Code, or section 1967
of title 38 of such Code, with respect to a person, to
the extent that such contribution does not exceed--
``(i) the sum of the amounts received
during such period by such individual under
such sections with respect to such person,
reduced by
``(ii) the amounts so received which were
contributed to a Coverdell education savings
account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to
apply.--Section 408(d)(3)(B) shall not apply with
respect to amounts treated as a rollover by the
subparagraph (A).
``(C) Application of section 72.--For purposes of
applying section 72 in the case of a distribution which
is not a qualified distribution, the amount treated as
a rollover by reason of subparagraph (A) shall be
treated as investment in the contract.''.
(c) Education Savings Accounts.--Subsection (d) of section 530 is
amended by adding at the end the following new paragraph:
``(9) Military death gratuity.--
``(A) In general.--For purposes of this section,
the term `rollover contribution' includes a
contribution to a Coverdell education savings account
made before the end of the 1-year period beginning on
the date on which the contributor receives an amount
under section 1477 of title 10, United States Code, or
section 1967 of title 38 of such Code, with respect to
a person, to the extent that such contribution does not
exceed--
``(i) the sum of the amounts received
during such period by such contributor under
such sections with respect to such person,
reduced by
``(ii) the amounts so received which were
contributed to a Roth IRA under section
408A(e)(2) or to another Coverdell education
savings account.
``(B) Annual limit on number of rollovers not to
apply.--The last sentence of paragraph (5) shall not
apply with respect to amounts treated as a rollover by
the subparagraph (A).
``(C) Application of section 72.--For purposes of
applying section 72 in the case of a distribution which
is includible in gross income under paragraph (1), the
amount treated as a rollover by reason of subparagraph
(A) shall be treated as investment in the contract.''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraphs (2) and
(3), the amendments made by this section shall apply with
respect to deaths from injuries occurring on or after the date
of the enactment of this Act.
(2) Application of amendments to deaths from injuries
occurring on or after october 7, 2001, and before enactment.--
The amendments made by this section shall apply to any
contribution made pursuant to section 408A(e)(2) or 530(d)(5)
of the Internal Revenue Code of 1986, as amended by this Act,
with respect to amounts received under section 1477 of title
10, United States Code, or under section 1967 of title 38 of
such Code, for deaths from injuries occurring on or after
October 7, 2001, and before the date of the enactment of this
Act if such contribution is made not later than 1 year after
the date of the enactment of this Act.
(3) Pension protection act changes.--Section 408A(e)(1) of
the Internal Revenue Code of 1986 (as in effect after the
amendments made by subsection (b)) shall apply to taxable years
beginning after December 31, 2007.
SEC. 109. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE WITH THE PEACE
CORPS.
(a) In General.--Subsection (d) of section 121 (relating to special
rules) is amended by adding at the end the following new paragraph:
``(12) Peace corps.--
``(A) In general.--At the election of an individual
with respect to a property, the running of the 5-year
period described in subsections (a) and (c)(1)(B) and
paragraph (7) of this subsection with respect to such
property shall be suspended during any period that such
individual or such individual's spouse is serving
outside the United States--
``(i) on qualified official extended duty
(as defined in paragraph (9)(C)) as an employee
of the Peace Corps, or
``(ii) as an enrolled volunteer or
volunteer leader under section 5 or 6 (as the
case may be) of the Peace Corps Act (22 U.S.C.
2504, 2505).
``(B) Applicable rules.--For purposes of
subparagraph (A), rules similar to the rules of
subparagraphs (B) and (D) shall apply.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2007.
SEC. 110. CREDIT FOR EMPLOYER DIFFERENTIAL WAGE PAYMENTS TO EMPLOYEES
WHO ARE ACTIVE DUTY MEMBERS OF THE UNIFORMED SERVICES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business credits) is amended by adding at the end the
following new section:
``SEC. 45O. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE DUTY
MEMBERS OF THE UNIFORMED SERVICES.
``(a) General Rule.--For purposes of section 38, in the case of an
eligible small business employer, the differential wage payment credit
for any taxable year is an amount equal to 20 percent of the sum of the
eligible differential wage payments for each of the qualified employees
of the taxpayer during such taxable year.
``(b) Definitions.--For purposes of this section--
``(1) Eligible differential wage payments.--The term
`eligible differential wage payments' means, with respect to
each qualified employee, so much of the differential wage
payments (as defined in section 3401(h)(2)) paid to such
employee for the taxable year as does not exceed $20,000.
``(2) Qualified employee.--The term `qualified employee'
means a person who has been an employee of the taxpayer for the
91-day period immediately preceding the period for which any
differential wage payment is made.
``(3) Eligible small business employer.--
``(A) In general.--The term `eligible small
business employer' means, with respect to any taxable
year, any employer which--
``(i) employed an average of less than 50
employees on business days during such taxable
year, and
``(ii) under a written plan of the
employer, provides eligible differential wage
payments to every qualified employee of the
employer.
``(B) Controlled groups.--For purposes of
subparagraph (A), all persons treated as a single
employer under subsection (b), (c), (m), or (o) of
section 414 shall be treated as a single employer.
``(c) Coordination With Other Credits.--The amount of credit
otherwise allowable under this chapter with respect to compensation
paid to any employee shall be reduced by the credit determined under
this section with respect to such employee.
``(d) Disallowance for Failure To Comply With Employment or
Reemployment Rights of Members of the Reserve Components of the Armed
Forces of the United States.--No credit shall be allowed under
subsection (a) to a taxpayer for--
``(1) any taxable year, beginning after the date of the
enactment of this section, in which the taxpayer is under a
final order, judgment, or other process issued or required by a
district court of the United States under section 4323 of title
38 of the United States Code with respect to a violation of
chapter 43 of such title, and
``(2) the 2 succeeding taxable years.
``(e) Certain Rules to Apply.--For purposes of this section, rules
similar to the rules of subsections (c), (d), and (e) of section 52
shall apply.
``(f) Termination.--This section shall not apply to any payments
made after December 31, 2009.''.
(b) Credit Treated as Part of General Business Credit.--Section
38(b) (relating to general business credit) is amended by striking
``plus'' at the end of paragraph (30), by striking the period at the
end of paragraph (31) and inserting ``, plus'', and by adding at the
end of following new paragraph:
``(32) the differential wage payment credit determined
under section 45O(a).''.
(c) No Deduction for Compensation Taken Into Account for Credit.--
Section 280C(a) (relating to rule for employment credits) is amended by
inserting ``45O(a),'' after ``45A(a),''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following new item:
``Sec. 45O. Employer wage credit for employees who are active duty
members of the uniformed services.''.
(e) Effective Date.--The amendments made by this section shall
apply to amounts paid after the date of the enactment of this Act.
SEC. 111. STATE PAYMENTS TO SERVICE MEMBERS TREATED AS QUALIFIED
MILITARY BENEFITS.
(a) In General.--Section 134(b) (defining qualified military
benefit) is amended by adding at the end the following new paragraph:
``(6) Certain state payments.--The term `qualified military
benefit' includes any bonus payment by a State or political
subdivision thereof to any member or former member of the
uniformed services of the United States or any dependent of
such member only by reason of such member's service in an
combat zone (as defined in section 112(c)(2), determined
without regard to the parenthetical).''.
(b) Effective Date.--The amendment made by this section shall apply
to payments made before, on, or after the date of the enactment of this
Act.
SEC. 112. PERMANENT EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL
RESIDENCE BY CERTAIN EMPLOYEES OF THE INTELLIGENCE
COMMUNITY.
(a) Permanent Exclusion.--
(1) In general.--Section 417(e) of division A of the Tax
Relief and Health Care Act of 2006 is amended by striking ``and
before January 1, 2011''.
(2) Effective date.--The amendment made by this subsection
shall apply to sales or exchanges after December 31, 2010.
(b) Duty Station May Be Inside United States.--
(1) In general.--Section 121(d)(9)(C) (defining qualified
official extended duty) is amended by striking clause (vi).
(2) Effective date.--The amendment made by this subsection
shall apply to sales or exchanges after the date of the
enactment of this Act.
SEC. 113. SPECIAL DISPOSITION RULES FOR UNUSED BENEFITS IN HEALTH
FLEXIBLE SPENDING ARRANGEMENTS OF INDIVIDUALS CALLED TO
ACTIVE DUTY.
(a) In General.--Section 125 (relating to cafeteria plans) is
amended by redesignating subsections (h) and (i) as subsection (i) and
(j), respectively, and by inserting after subsection (g) the following
new subsection:
``(h) Special Rule for Unused Benefits in Health Flexible Spending
Arrangements of Individuals Called to Active Duty.--
``(1) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan or health flexible spending arrangement merely because
such arrangement provides for qualified reservist
distributions.
``(2) Qualified reservist distribution.--For purposes of
this subsection, the term `qualified reservist distribution'
means, any distribution to an individual of all or a portion of
the balance in the employee's account under such arrangement
if--
``(A) such individual was (by reason of being a
member of a reserve component (as defined in section
101 of title 37, United States Code)) ordered or called
to active duty for a period in excess of 179 days or
for an indefinite period, and
``(B) such distribution is made during the period
beginning on the date of such order or call and ending
on the last date that reimbursements could otherwise be
made under such arrangement for the plan year which
includes the date of such order or call.''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions made after the date of the enactment of this Act.
SEC. 114. OPTION TO EXCLUDE MILITARY BASIC HOUSING ALLOWANCE FOR
PURPOSES OF DETERMINING INCOME ELIGIBILITY UNDER LOW-
INCOME HOUSING CREDIT AND BOND-FINANCED RESIDENTIAL
RENTAL PROJECTS.
(a) In General.--The last sentence of 142(d)(2)(B) (relating to
income of individuals; area median gross income) is amended to read as
follows: ``For purposes of determining income under this subparagraph--
``(i) subsections (g) and (h) of section
7872 shall not apply, and
``(ii) in the case of determinations made
before January 1, 2015, payments under section
403 of title 37, United States Code, as a basic
pay allowance for housing shall be disregarded
if the project is located in a census tract
which is designated by the Governor (of the
State in which such tract is located) as being
in need of housing for members of the Armed
Forces of the United States.''.
(b) Effective Date.--The amendment made by this section shall take
effect with respect to determinations made after the date of the
enactment of this Act.
TITLE II--REVENUE PROVISIONS
SEC. 201. INCREASE IN PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS.
(a) Increase in Penalty Amount.--Paragraph (1) of section 6698(b)
(relating to amount per month), as amended by section 8 of the Mortgage
Forgiveness Debt Relief Act of 2007, is amended by striking ``$85'' and
inserting ``$100''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect as if included in the amendments made by section 8 of the
Mortgage Forgiveness Debt Relief Act of 2007.
SEC. 202. INCREASE IN PENALTY FOR FAILURE TO FILE S CORPORATION
RETURNS.
(a) In General.--Paragraph (1) of section 6699(b) (relating to
amount per month), as added to the Internal Revenue Code of 1986 by
section 9 of the Mortgage Forgiveness Debt Relief Act of 2007, is
amended by striking ``$85'' and inserting ``$100''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect as if included in the amendments made by section 9 of the
Mortgage Forgiveness Debt Relief Act of 2007.
SEC. 203. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A RETURN OF
TAX.
(a) In General.--Subsection (a) of section 6651 is amended by
striking ``$100'' in the last sentence and inserting ``$225''.
(b) Effective Date.--The amendment made by this section shall apply
to returns the due date for the filing of which (including extensions)
is after December 31, 2007.
SEC. 204. REVISION OF TAX RULES ON EXPATRIATION.
(a) In General.--Subpart A of part II of subchapter N of chapter 1
is amended by inserting after section 877 the following new section:
``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.
``(a) General Rules.--For purposes of this subtitle--
``(1) Mark to market.--All property of a covered expatriate
shall be treated as sold on the day before the expatriation
date for its fair market value.
``(2) Recognition of gain or loss.--In the case of any sale
under paragraph (1)--
``(A) notwithstanding any other provision of this
title, any gain arising from such sale shall be taken
into account for the taxable year of the sale, and
``(B) any loss arising from such sale shall be
taken into account for the taxable year of the sale to
the extent otherwise provided by this title, except
that section 1091 shall not apply to any such loss.
Proper adjustment shall be made in the amount of any gain or
loss subsequently realized for gain or loss taken into account
under the preceding sentence, determined without regard to
paragraph (3).
``(3) Exclusion for certain gain.--
``(A) In general.--The amount which would (but for
this paragraph) be includible in the gross income of
any individual by reason of paragraph (1) shall be
reduced (but not below zero) by $600,000.
``(B) Adjustment for inflation.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
2008, 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 the calendar year in which
the taxable year begins, by
substituting `calendar year 2007' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--If any amount as adjusted
under clause (i) is not a multiple of $1,000,
such amount shall be rounded to the nearest
multiple of $1,000.
``(b) Election To Defer Tax.--
``(1) In general.--If the taxpayer elects the application
of this subsection with respect to any property treated as sold
by reason of subsection (a), the time for payment of the
additional tax attributable to such property shall be extended
until the due date of the return for the taxable year in which
such property is disposed of (or, in the case of property
disposed of in a transaction in which gain is not recognized in
whole or in part, until such other date as the Secretary may
prescribe).
``(2) Determination of tax with respect to property.--For
purposes of paragraph (1), the additional tax attributable to
any property is an amount which bears the same ratio to the
additional tax imposed by this chapter for the taxable year
solely by reason of subsection (a) as the gain taken into
account under subsection (a) with respect to such property
bears to the total gain taken into account under subsection (a)
with respect to all property to which subsection (a) applies.
``(3) Termination of extension.--The due date for payment
of tax may not be extended under this subsection later than the
due date for the return of tax imposed by this chapter for the
taxable year which includes the date of death of the expatriate
(or, if earlier, the time that the security provided with
respect to the property fails to meet the requirements of
paragraph (4), unless the taxpayer corrects such failure within
the time specified by the Secretary).
``(4) Security.--
``(A) In general.--No election may be made under
paragraph (1) with respect to any property unless
adequate security is provided with respect to such
property.
``(B) Adequate security.--For purposes of
subparagraph (A), security with respect to any property
shall be treated as adequate security if--
``(i) it is a bond which is furnished to,
and accepted by, the Secretary, which is
conditioned on the payment of tax (and interest
thereon), and which meets the requirements of
section 6325, or
``(ii) it is another form of security for
such payment (including letters of credit) that
meets such requirements as the Secretary may
prescribe.
``(5) Waiver of certain rights.--No election may be made
under paragraph (1) unless the taxpayer makes an irrevocable
waiver of any right under any treaty of the United States which
would preclude assessment or collection of any tax imposed by
reason of this section.
``(6) Elections.--An election under paragraph (1) shall
only apply to property described in the election and, once
made, is irrevocable.
``(7) Interest.--For purposes of section 6601, the last
date for the payment of tax shall be determined without regard
to the election under this subsection.
``(c) Exception for Certain Property.--Subsection (a) shall not
apply to--
``(1) any deferred compensation item (as defined in
subsection (d)(4)),
``(2) any specified tax deferred account (as defined in
subsection (e)(2)), and
``(3) any interest in a nongrantor trust (as defined in
subsection (f)(3)).
``(d) Treatment of Deferred Compensation Items.--
``(1) Withholding on eligible deferred compensation
items.--
``(A) In general.--In the case of any eligible
deferred compensation item, the payor shall deduct and
withhold from any taxable payment to a covered
expatriate with respect to such item a tax equal to 30
percent thereof.
``(B) Taxable payment.--For purposes of
subparagraph (A), the term `taxable payment' means with
respect to a covered expatriate any payment to the
extent it would be includible in the gross income of
the covered expatriate if such expatriate continued to
be subject to tax as a citizen or resident of the
United States. A deferred compensation item shall be
taken into account as a payment under the preceding
sentence when such item would be so includible.
``(2) Other deferred compensation items.--In the case of
any deferred compensation item which is not an eligible
deferred compensation item--
``(A)(i) with respect to any deferred compensation
item to which clause (ii) does not apply, an amount
equal to the present value of the covered expatriate's
accrued benefit shall be treated as having been
received by such individual on the day before the
expatriation date as a distribution under the plan, and
``(ii) with respect to any deferred compensation
item referred to in paragraph (4)(D), the rights of the
covered expatriate to such item shall be treated as
becoming transferable and not subject to a substantial
risk of forfeiture on the day before the expatriation
date,
``(B) no early distribution tax shall apply by
reason of such treatment, and
``(C) appropriate adjustments shall be made to
subsequent distributions from the plan to reflect such
treatment.
``(3) Eligible deferred compensation items.--For purposes
of this subsection, the term `eligible deferred compensation
item' means any deferred compensation item with respect to
which--
``(A) the payor of such item is--
``(i) a United States person, or
``(ii) a person who is not a United States
person but who elects to be treated as a United
States person for purposes of paragraph (1) and
meets such requirements as the Secretary may
provide to ensure that the payor will meet the
requirements of paragraph (1), and
``(B) the covered expatriate--
``(i) notifies the payor of his status as a
covered expatriate, and
``(ii) makes an irrevocable waiver of any
right to claim any reduction under any treaty
with the United States in withholding on such
item.
``(4) Deferred compensation item.--For purposes of this
subsection, the term `deferred compensation item' means--
``(A) any interest in a plan or arrangement
described in section 219(g)(5),
``(B) any interest in a foreign pension plan or
similar retirement arrangement or program,
``(C) any item of deferred compensation, and
``(D) any property, or right to property, which the
individual is entitled to receive in connection with
the performance of services to the extent not
previously taken into account under section 83 or in
accordance with section 83.
``(5) Exception.--Paragraphs (1) and (2) shall not apply to
any deferred compensation item which is attributable to
services performed outside the United States while the covered
expatriate was not a citizen or resident of the United States.
``(6) Special rules.--
``(A) Application of withholding rules.--Rules
similar to the rules of subchapter B of chapter 3 shall
apply for purposes of this subsection.
``(B) Application of tax.--Any item subject to the
withholding tax imposed under paragraph (1) shall be
subject to tax under section 871.
``(C) Coordination with other withholding
requirements.--Any item subject to withholding under
paragraph (1) shall not be subject to withholding under
section 1441 or chapter 24.
``(e) Treatment of Specified Tax Deferred Accounts.--
``(1) Account treated as distributed.--In the case of any
interest in a specified tax deferred account held by a covered
expatriate on the day before the expatriation date--
``(A) the covered expatriate shall be treated as
receiving a distribution of his entire interest in such
account on the day before the expatriation date,
``(B) no early distribution tax shall apply by
reason of such treatment, and
``(C) appropriate adjustments shall be made to
subsequent distributions from the account to reflect
such treatment.
``(2) Specified tax deferred account.--For purposes of
paragraph (1), the term `specified tax deferred account' means
an individual retirement plan (as defined in section
7701(a)(37)) other than any arrangement described in subsection
(k) or (p) of section 408, a qualified tuition program (as
defined in section 529), a Coverdell education savings account
(as defined in section 530), a health savings account (as
defined in section 223), and an Archer MSA (as defined in
section 220).
``(f) Special Rules for Nongrantor Trusts.--
``(1) In general.--In the case of a distribution (directly
or indirectly) of any property from a nongrantor trust to a
covered expatriate--
``(A) the trustee shall deduct and withhold from
such distribution an amount equal to 30 percent of the
taxable portion of the distribution, and
``(B) if the fair market value of such property
exceeds its adjusted basis in the hands of the trust,
gain shall be recognized to the trust as if such
property were sold to the expatriate at its fair market
value.
``(2) Taxable portion.--For purposes of this subsection,
the term `taxable portion' means, with respect to any
distribution, that portion of the distribution which would be
includible in the gross income of the covered expatriate if
such expatriate continued to be subject to tax as a citizen or
resident of the United States.
``(3) Nongrantor trust.--For purposes of this subsection,
the term `nongrantor trust' means the portion of any trust that
the individual is not considered the owner of under subpart E
of part I of subchapter J. The determination under the
preceding sentence shall be made immediately before the
expatriation date.
``(4) Special rules relating to withholding.--For purposes
of this subsection--
``(A) rules similar to the rules of subsection
(d)(6) shall apply, and
``(B) the covered expatriate shall be treated as
having waived any right to claim any reduction under
any treaty with the United States in withholding on any
distribution to which paragraph (1)(A) applies unless
the covered expatriate agrees to such other treatment
as the Secretary determines appropriate.
``(5) Application.--This subsection shall apply to a
nongrantor trust only if the covered expatriate was a
beneficiary of the trust on the day before the expatriation
date.
``(g) Definitions and Special Rules Relating to Expatriation.--For
purposes of this section--
``(1) Covered expatriate.--
``(A) In general.--The term `covered expatriate'
means an expatriate who meets the requirements of
subparagraph (A), (B), or (C) of section 877(a)(2).
``(B) Exceptions.--An individual shall not be
treated as meeting the requirements of subparagraph (A)
or (B) of section 877(a)(2) if--
``(i) the individual--
``(I) became at birth a citizen of
the United States and a citizen of
another country and, as of the
expatriation date, continues to be a
citizen of, and is taxed as a resident
of, such other country, and
``(II) has been a resident of the
United States (as defined in section
7701(b)(1)(A)(ii)) for not more than 10
taxable years during the 15-taxable
year period ending with the taxable
year during which the expatriation date
occurs, or
``(ii)(I) the individual's relinquishment
of United States citizenship occurs before such
individual attains age 18\1/2\, and
``(II) the individual has been a resident
of the United States (as so defined) for not
more than 10 taxable years before the date of
relinquishment.
``(C) Covered expatriates also subject to tax as
citizens or residents.--In the case of any covered
expatriate who is subject to tax as a citizen or
resident of the United States for any period beginning
after the expatriation date, such individual shall not
be treated as a covered expatriate during such period
for purposes of subsections (d)(1) and (f) and section
2801.
``(2) Expatriate.--The term `expatriate' means--
``(A) any United States citizen who relinquishes
his citizenship, and
``(B) any long-term resident of the United States
who ceases to be a lawful permanent resident of the
United States (within the meaning of section
7701(b)(6)).
``(3) Expatriation date.--The term `expatriation date'
means--
``(A) the date an individual relinquishes United
States citizenship, or
``(B) in the case of a long-term resident of the
United States, the date on which the individual ceases
to be a lawful permanent resident of the United States
(within the meaning of section 7701(b)(6)).
``(4) Relinquishment of citizenship.--A citizen shall be
treated as relinquishing his United States citizenship on the
earliest of--
``(A) the date the individual renounces his United
States nationality before a diplomatic or consular
officer of the United States pursuant to paragraph (5)
of section 349(a) of the Immigration and Nationality
Act (8 U.S.C. 1481(a)(5)),
``(B) the date the individual furnishes to the
United States Department of State a signed statement of
voluntary relinquishment of United States nationality
confirming the performance of an act of expatriation
specified in paragraph (1), (2), (3), or (4) of section
349(a) of the Immigration and Nationality Act (8 U.S.C.
1481(a)(1)-(4)),
``(C) the date the United States Department of
State issues to the individual a certificate of loss of
nationality, or
``(D) the date a court of the United States cancels
a naturalized citizen's certificate of naturalization.
Subparagraph (A) or (B) shall not apply to any individual
unless the renunciation or voluntary relinquishment is
subsequently approved by the issuance to the individual of a
certificate of loss of nationality by the United States
Department of State.
``(5) Long-term resident.--The term `long-term resident'
has the meaning given to such term by section 877(e)(2).
``(6) Early distribution tax.--The term `early distribution
tax' means any increase in tax imposed under section 72(t),
220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).
``(h) Other Rules.--
``(1) Termination of deferrals, etc.--In the case of any
covered expatriate, notwithstanding any other provision of this
title--
``(A) any time period for acquiring property which
would result in the reduction in the amount of gain
recognized with respect to property disposed of by the
taxpayer shall terminate on the day before the
expatriation date, and
``(B) any extension of time for payment of tax
shall cease to apply on the day before the expatriation
date and the unpaid portion of such tax shall be due
and payable at the time and in the manner prescribed by
the Secretary.
``(2) Step-up in basis.--Solely for purposes of determining
any tax imposed by reason of subsection (a), property which was
held by an individual on the date the individual first became a
resident of the United States (within the meaning of section
7701(b)) shall be treated as having a basis on such date of not
less than the fair market value of such property on such date.
The preceding sentence shall not apply if the individual elects
not to have such sentence apply. Such an election, once made,
shall be irrevocable.
``(3) Coordination with section 684.--If the expatriation
of any individual would result in the recognition of gain under
section 684, this section shall be applied after the
application of section 684.
``(i) Regulations.--The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out the purposes of this
section.''.
(b) Tax on Gifts and Bequests Received by United States Citizens
and Residents From Expatriates.--
(1) In general.--Subtitle B (relating to estate and gift
taxes) is amended by inserting after chapter 14 the following
new chapter:
``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES
``Sec. 2801. Imposition of tax.
``SEC. 2801. IMPOSITION OF TAX.
``(a) In General.--If, during any calendar year, any United States
citizen or resident receives any covered gift or bequest, there is
hereby imposed a tax equal to the product of--
``(1) the highest rate of tax specified in the table
contained in section 2001(c) as in effect on the date of such
receipt (or, if greater, the highest rate of tax specified in
the table applicable under section 2502(a) as in effect on the
date), and
``(2) the value of such covered gift or bequest.
``(b) Tax To Be Paid by Recipient.--The tax imposed by subsection
(a) on any covered gift or bequest shall be paid by the person
receiving such gift or bequest.
``(c) Exception for Certain Gifts.--Subsection (a) shall apply only
to the extent that the value of covered gifts and bequests received by
any person during the calendar year exceeds the dollar amount in effect
under section 2503(b) for such calendar year.
``(d) Tax Reduced by Foreign Gift or Estate Tax.--The tax imposed
by subsection (a) on any covered gift or bequest shall be reduced by
the amount of any gift or estate tax paid to a foreign country with
respect to such covered gift or bequest.
``(e) Covered Gift or Bequest.--
``(1) In general.--For purposes of this chapter, the term
`covered gift or bequest' means--
``(A) any property acquired by gift directly or
indirectly from an individual who, at the time of such
acquisition, is a covered expatriate, and
``(B) any property acquired directly or indirectly
by reason of the death of an individual who,
immediately before such death, was a covered
expatriate.
``(2) Exceptions for transfers otherwise subject to estate
or gift tax.--Such term shall not include--
``(A) any property shown on a timely filed return
of tax imposed by chapter 12 which is a taxable gift by
the covered expatriate, and
``(B) any property included in the gross estate of
the covered expatriate for purposes of chapter 11 and
shown on a timely filed return of tax imposed by
chapter 11 of the estate of the covered expatriate.
``(3) Exceptions for transfers to spouse or charity.--Such
term shall not include any property with respect to which a
deduction would be allowed under section 2055, 2056, 2522, or
2523, whichever is appropriate, if the decedent or donor were a
United States person.
``(4) Transfers in trust.--
``(A) Domestic trusts.--In the case of a covered
gift or bequest made to a domestic trust--
``(i) subsection (a) shall apply in the
same manner as if such trust were a United
States citizen, and
``(ii) the tax imposed by subsection (a) on
such gift or bequest shall be paid by such
trust.
``(B) Foreign trusts.--
``(i) In general.--In the case of a covered
gift or bequest made to a foreign trust,
subsection (a) shall apply to any distribution
attributable to such gift or bequest from such
trust (whether from income or corpus) to a
United States citizen or resident in the same
manner as if such distribution were a covered
gift or bequest.
``(ii) Deduction for tax paid by
recipient.--There shall be allowed as a
deduction under section 164 the amount of tax
imposed by this section which is paid or
accrued by a United States citizen or resident
by reason of a distribution from a foreign
trust, but only to the extent such tax is
imposed on the portion of such distribution
which is included in the gross income of such
citizen or resident.
``(iii) Election to be treated as domestic
trust.--Solely for purposes of this section, a
foreign trust may elect to be treated as a
domestic trust. Such an election may be revoked
with the consent of the Secretary.
``(f) Covered Expatriate.--For purposes of this section, the term
`covered expatriate' has the meaning given to such term by section
877A(g)(1).''.
(2) Clerical amendment.--The table of chapters for subtitle
B is amended by inserting after the item relating to chapter 14
the following new item:
``Chapter 15. Gifts and Bequests From Expatriates.''.
(c) Definition of Termination of United States Citizenship.--
(1) In general.--Section 7701(a) is amended by adding at
the end the following new paragraph:
``(50) Termination of united states citizenship.--
``(A) In general.--An individual shall not cease to
be treated as a United States citizen before the date
on which the individual's citizenship is treated as
relinquished under section 877A(g)(4).
``(B) Dual citizens.--Under regulations prescribed
by the Secretary, subparagraph (A) shall not apply to
an individual who became at birth a citizen of the
United States and a citizen of another country.''.
(2) Conforming amendments.--
(A) Paragraph (1) of section 877(e) is amended to
read as follows:
``(1) In general.--Any long-term resident of the United
States who ceases to be a lawful permanent resident of the
United States (within the meaning of section 7701(b)(6)) shall
be treated for purposes of this section and sections 2107,
2501, and 6039G in the same manner as if such resident were a
citizen of the United States who lost United States citizenship
on the date of such cessation or commencement.''.
(B) Paragraph (6) of section 7701(b) is amended by
adding at the end the following flush sentence:
``An individual shall cease to be treated as a lawful permanent
resident of the United States if such individual commences to
be treated as a resident of a foreign country under the
provisions of a tax treaty between the United States and the
foreign country, does not waive the benefits of such treaty
applicable to residents of the foreign country, and notifies
the Secretary of the commencement of such treatment.''.
(C) Section 7701 is amended by striking subsection
(n) and by redesignating subsections (o) and (p) as
subsections (n) and (o), respectively.
(d) Information Returns.--Section 6039G is amended--
(1) by inserting ``or 877A'' after ``section 877(b)'' in
subsection (a), and
(2) by inserting ``or 877A'' after ``section 877(a)'' in
subsection (d).
(e) Clerical Amendment.--The table of sections for subpart A of
part II of subchapter N of chapter 1 is amended by inserting after the
item relating to section 877 the following new item:
``Sec. 877A. Tax responsibilities of expatriation.''.
(f) Effective Date.--
(1) In general.--Except as provided in this subsection, the
amendments made by this section shall apply to expatriates (as
defined in section 877A(g) of the Internal Revenue Code of
1986, as added by this section) whose expatriation date (as so
defined) is on or after the date of the enactment of this Act.
(2) Gifts and bequests.--Chapter 15 of the Internal Revenue
Code of 1986 (as added by subsection (b)) shall apply to
covered gifts and bequests (as defined in section 2801 of such
Code, as so added) received on or after the date of the
enactment of this Act from transferors whose expatriation date
is on or after such date of enactment.
SEC. 205. SPECIAL ENROLLMENT OPTION BY EMPLOYER HEALTH PLANS FOR
MEMBERS OF UNIFORM SERVICES WHO LOSE HEALTH CARE
COVERAGE.
(a) In General.--Section 9801(f) (relating to special enrollment
periods) is amended by adding at the end the following new paragraph:
``(3) Loss of military health coverage.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), a group health plan shall permit an employee
who is eligible, but not enrolled, for coverage under
the terms of the plan (or a dependent of such an
employee if the dependent is eligible, but not
enrolled, for coverage under such terms) to enroll for
coverage under the terms of the plan if each of the
following conditions is met:
``(i) The employee or dependent, by reason
of service in the uniformed services (within
the meaning of section 4303 of title 38, United
States Code), was covered under a Federal
health care benefit program (including coverage
under the TRICARE program (as that term is
defined in section 1072 of title 10, United
States Code) or by reason of entitlement to
health care benefits under the laws
administered by the Secretary of Veterans
Affairs or as a member of the uniformed
services on active duty), and the employee or
dependent loses eligibility for such coverage.
``(ii) The employee or dependent is
otherwise eligible to enroll for coverage under
the terms of the plan.
``(iii) The employee requests such coverage
not later than 90 days after the date on which
the coverage described in clause (i)
terminated.
``(B) Effective date of coverage.--Coverage
requested under subparagraph (A)(iii) shall become
effective not later than the first day of the first
month after the date of such request.''.
(b) Employee Retirement Income Security Act of 1974.--Section
701(f) of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1181(f)) is amended by adding at the end the following:
``(3) Loss of military health coverage.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), a group health plan, and a health insurance
issuer offering group health insurance coverage in
connection with a group health plan, shall permit an
employee who is eligible, but not enrolled, for
coverage under the terms of the plan (or a dependent of
such an employee if the dependent is eligible, but not
enrolled, for coverage under such terms) to enroll for
coverage under the terms of the plan if each of the
following conditions is met:
``(i) The employee or dependent, by reason
of service in the uniformed services (within
the meaning of section 4303 of title 38, United
States Code), was covered under a Federal
health care benefit program (including coverage
under the TRICARE program (as that term is
defined in section 1072 of title 10, United
States Code) or by reason of entitlement to
health care benefits under the laws
administered by the Secretary of Veterans
Affairs or as a member of the uniformed
services on active duty), and the employee or
dependent loses eligibility for such coverage.
``(ii) The employee or dependent is
otherwise eligible to enroll for coverage under
the terms of the plan.
``(iii) The employee requests such coverage
not later than 90 days after the date on which
the coverage described in clause (i)
terminated.
``(B) Effective date of coverage.--Coverage
requested under subparagraph (A)(iii) shall become
effective not later than the first day of the first
month after the date of such request.''.
(c) Public Health Service Act.--Section 2701(f) of the Public
Health Service Act (42 U.S.C. 300gg(f)) is amended by adding at the end
the following:
``(3) Loss of military health coverage.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), a group health plan, and a health insurance
issuer offering group health insurance coverage in
connection with a group health plan, shall permit an
employee who is eligible, but not enrolled, for
coverage under the terms of the plan (or a dependent of
such an employee if the dependent is eligible, but not
enrolled, for coverage under such terms) to enroll for
coverage under the terms of the plan if each of the
following conditions is met:
``(i) The employee or dependent, by reason
of service in the uniformed services (within
the meaning of section 4303 of title 38, United
States Code), was covered under a Federal
health care benefit program (including coverage
under the TRICARE program (as that term is
defined in section 1072 of title 10, United
States Code) or by reason of entitlement to
health care benefits under the laws
administered by the Secretary of Veterans
Affairs or as a member of the uniformed
services on active duty), and the employee or
dependent loses eligibility for such coverage.
``(ii) The employee or dependent is
otherwise eligible to enroll for coverage under
the terms of the plan.
``(iii) The employee requests such coverage
not later than 90 days after the date on which
the coverage described in clause (i)
terminated.
``(B) Effective date of coverage.--Coverage
requested under subparagraph (A)(iii) shall become
effective not later than the first day of the first
month after the date of such request.''.
(d) Regulations.--The Secretary of the Treasury, the Secretary of
Labor, and the Secretary of Health and Human Services, consistent with
section 104 of the Health Insurance Portability and Accountability Act
of 1996 (42 U.S.C. 300gg-92 note), may promulgate such regulations as
may be necessary or appropriate to require the notification of
individuals (or their dependents) of their rights under the amendment
made by this Act.
(e) Effective Date.--The amendments made by this section shall take
effect 90 days after the date of the enactment of this Act.
TITLE III--TAX TECHNICAL CORRECTIONS
SEC. 301. SHORT TITLE.
This title may be cited as the ``''.
SEC. 302. AMENDMENT RELATED TO THE TAX RELIEF AND HEALTH CARE ACT OF
2006.
(a) Amendment Related to Section 402 of Division A of the Act.--
Subparagraph (A) of section 53(e)(2) is amended to read as follows:
``(A) In general.--The term `AMT refundable credit
amount' means, with respect to any taxable year, the
amount (not in excess of the long-term unused minimum
tax credit for such taxable year) equal to the greater
of--
``(i) $5,000,
``(ii) 20 percent of the long-term unused
minimum tax credit for such taxable year, or
``(iii) the amount (if any) of the AMT
refundable credit amount determined under this
paragraph for the taxpayer's preceding taxable
year (as determined before any reduction under
subparagraph (B)).''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in the provision of the Tax Relief and Health
Care Act of 2006 to which it relates.
SEC. 303. AMENDMENTS RELATED TO TITLE XII OF THE PENSION PROTECTION ACT
OF 2006.
(a) Amendment Related to Section 1201 of the Act.--Subparagraph (D)
of section 408(d)(8) is amended by striking ``all amounts distributed
from all individual retirement plans were treated as 1 contract under
paragraph (2)(A) for purposes of determining the inclusion of such
distribution under section 72'' and inserting ``all amounts in all
individual retirement plans of the individual were distributed during
such taxable year and all such plans were treated as 1 contract for
purposes of determining under section 72 the aggregate amount which
would have been so includible''.
(b) Amendment Related to Section 1203 of the Act.--Subsection (d)
of section 1366 is amended by adding at the end the following new
paragraph:
``(4) Application of limitation on charitable
contributions.--In the case of any charitable contribution of
property to which the second sentence of section 1367(a)(2)
applies, paragraph (1) shall not apply to the extent of the
excess (if any) of--
``(A) the shareholder's pro rata share of such
contribution, over
``(B) the shareholder's pro rata share of the
adjusted basis of such property.''.
(c) Amendment Related to Section 1215 of the Act.--Subclause (I) of
section 170(e)(7)(D)(i) is amended by striking ``related'' and
inserting ``substantial and related''.
(d) Amendments Related to Section 1218 of the Act.--
(1) Section 2055 is amended by striking subsection (g) and
by redesignating subsection (h) as subsection (g).
(2) Subsection (e) of section 2522 is amended--
(A) by striking paragraphs (2) and (4),
(B) by redesignating paragraph (3) as paragraph
(2), and
(C) by adding at the end of paragraph (2), as so
redesignated, the following new subparagraph:
``(C) Initial fractional contribution.--For
purposes of this paragraph, the term `initial
fractional contribution' means, with respect to any
donor, the first gift of an undivided portion of the
donor's entire interest in any tangible personal
property for which a deduction is allowed under
subsection (a) or (b).''.
(e) Amendments Related to Section 1219 of the Act.--
(1) Paragraph (2) of section 6695A(a) is amended by
inserting ``a substantial estate or gift tax valuation
understatement (within the meaning of section 6662(g)),''
before ``or a gross valuation misstatement''.
(2) Paragraph (1) of section 6696(d) is amended by striking
``or under section 6695'' and inserting ``, section 6695, or
6695A''.
(f) Amendment Related to Section 1221 of the Act.--Subparagraph (A)
of section 4940(c)(4) is amended to read as follows:
``(A) There shall not be taken into account any
gain or loss from the sale or other disposition of
property to the extent that such gain or loss is taken
into account for purposes of computing the tax imposed
by section 511.''.
(g) Amendment Related to Section 1225 of the Act.--
(1) Subsection (b) of section 6104 is amended--
(A) by striking ``Information'' in the heading, and
(B) by adding at the end the following: ``Any
annual return which is filed under section 6011 by an
organization described in section 501(c)(3) and which
relates to any tax imposed by section 511 (relating to
imposition of tax on unrelated business income of
charitable, etc., organizations) shall be treated for
purposes of this subsection in the same manner as if
furnished under section 6033.''.
(2) Clause (ii) of section 6104(d)(1)(A) is amended to read
as follows:
``(ii) any annual return which is filed
under section 6011 by an organization described
in section 501(c)(3) and which relates to any
tax imposed by section 511 (relating to
imposition of tax on unrelated business income
of charitable, etc., organizations),''.
(3) Paragraph (2) of section 6104(d) is amended by striking
``section 6033'' and inserting ``section 6011 or 6033''.
(h) Amendment Related to Section 1231 of the Act.--Subsection (b)
of section 4962 is amended by striking ``or D'' and inserting ``D, or
G''.
(i) Amendment Related to Section 1242 of the Act.--
(1) Subclause (II) of section 4958(c)(3)(A)(i) is amended
by striking ``paragraph (1), (2), or (4) of section 509(a)''
and inserting ``subparagraph (C)(ii)''.
(2) Clause (ii) of section 4958(c)(3)(C) is amended to read
as follows:
``(ii) Exception.--Such term shall not
include--
``(I) any organization described in
paragraph (1), (2), or (4) of section
509(a), and
``(II) any organization which is
treated as described in such paragraph
(2) by reason of the last sentence of
section 509(a) and which is a supported
organization (as defined in section
509(f)(3)) of the organization to which
subparagraph (A) applies.''.
(j) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Pension Protection Act
of 2006 to which they relate.
SEC. 304. AMENDMENTS RELATED TO THE TAX INCREASE PREVENTION AND
RECONCILIATION ACT OF 2005.
(a) Amendments Related to Section 103 of the Act.--Paragraph (6) of
section 954(c) is amended by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A) the following new
subparagraph:
``(B) Exception.--Subparagraph (A) shall not apply
in the case of any interest, rent, or royalty to the
extent such interest, rent, or royalty creates (or
increases) a deficit which under section 952(c) may
reduce the subpart F income of the payor or another
controlled foreign corporation.''.
(b) Amendments Related to Section 202 of the Act.--
(1) Subparagraph (A) of section 355(b)(2) is amended to
read as follows:
``(A) it is engaged in the active conduct of a
trade or business,''.
(2) Paragraph (3) of section 355(b) is amended to read as
follows:
``(3) Special rules for determining active conduct in the
case of affiliated groups.--
``(A) In general.--For purposes of determining
whether a corporation meets the requirements of
paragraph (2)(A), all members of such corporation's
separate affiliated group shall be treated as one
corporation.
``(B) Separate affiliated group.--For purposes of
this paragraph, the term `separate affiliated group'
means, with respect to any corporation, the affiliated
group which would be determined under section 1504(a)
if such corporation were the common parent and section
1504(b) did not apply.
``(C) Treatment of trade or business conducted by
acquired member.--If a corporation became a member of a
separate affiliated group as a result of one or more
transactions in which gain or loss was recognized in
whole or in part, any trade or business conducted by
such corporation (at the time that such corporation
became such a member) shall be treated for purposes of
paragraph (2) as acquired in a transaction in which
gain or loss was recognized in whole or in part.
``(D) Regulations.--The Secretary shall prescribe
such regulations as are necessary or appropriate to
carry out the purposes of this paragraph, including
regulations which provide for the proper application of
subparagraphs (B), (C), and (D) of paragraph (2), and
modify the application of subsection (a)(3)(B), in
connection with the application of this paragraph.''.
(3) The Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by section 202 of the
Tax Increase Prevention and Reconciliation Act of 2005 and by
section 410 of division A of the Tax Relief and Health Care Act
of 2006 had never been enacted.
(c) Amendment Related to Section 515 of the Act.--Subsection (f) of
section 911 is amended to read as follows:
``(f) Determination of Tax Liability.--
``(1) In general.--If, for any taxable year, any amount is
excluded from gross income of a taxpayer under subsection (a),
then, notwithstanding sections 1 and 55--
``(A) if such taxpayer has taxable income for such
taxable year, the tax imposed by section 1 for such
taxable year shall be equal to the excess (if any) of--
``(i) the tax which would be imposed by
section 1 for such taxable year if the
taxpayer's taxable income were increased by the
amount excluded under subsection (a) for such
taxable year, over
``(ii) the tax which would be imposed by
section 1 for such taxable year if the
taxpayer's taxable income were equal to the
amount excluded under subsection (a) for such
taxable year, and
``(B) if such taxpayer has a taxable excess (as
defined in section 55(b)(1)(A)(ii)) for such taxable
year, the amount determined under the first sentence of
section 55(b)(1)(A)(i) for such taxable year shall be
equal to the excess (if any) of--
``(i) the amount which would be determined
under such sentence for such taxable year
(subject to the limitation of section 55(b)(3))
if the taxpayer's taxable excess (as so
defined) were increased by the amount excluded
under subsection (a) for such taxable year,
over
``(ii) the amount which would be determined
under such sentence for such taxable year if
the taxpayer's taxable excess (as so defined)
were equal to the amount excluded under
subsection (a) for such taxable year.
``(2) Special rules.--
``(A) Regular tax.--In applying section 1(h) for
purposes of determining the tax under paragraph
(1)(A)(i) for any taxable year in which, without regard
to this subsection, the taxpayer's net capital gain
exceeds taxable income (hereafter in this subparagraph
referred to as the capital gain excess)--
``(i) the taxpayer's net capital gain
(determined without regard to section 1(h)(11))
shall be reduced (but not below zero) by such
capital gain excess,
``(ii) the taxpayer's qualified dividend
income shall be reduced by so much of such
capital gain excess as exceeds the taxpayer's
net capital gain (determined without regard to
section 1(h)(11) and the reduction under clause
(i)), and
``(iii) adjusted net capital gain,
unrecaptured section 1250 gain, and 28-percent
rate gain shall each be determined after
increasing the amount described in section
1(h)(4)(B) by such capital gain excess.
``(B) Alternative minimum tax.--In applying section
55(b)(3) for purposes of determining the tax under
paragraph (1)(B)(i) for any taxable year in which,
without regard to this subsection, the taxpayer's net
capital gain exceeds the taxable excess (as defined in
section 55(b)(1)(A)(ii))--
``(i) the rules of subparagraph (A) shall
apply, except that such subparagraph shall be
applied by substituting `the taxable excess (as
defined in section 55(b)(1)(A)(ii))' for
`taxable income', and
``(ii) the reference in section 55(b)(3)(B)
to the excess described in section 1(h)(1)(B)
shall be treated as a reference to such excess
as determined under the rules of subparagraph
(A) for purposes of determining the tax under
paragraph (1)(A)(i).
``(C) Definitions.--Terms used in this paragraph
which are also used in section 1(h) shall have the
respective meanings given such terms by section 1(h),
except that in applying subparagraph (B) the
adjustments under part VI of subchapter A shall be
taken into account.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect as if included in the provisions of the Tax Increase
Prevention and Reconciliation Act of 2005 to which they relate.
(2) Modification of active business definition under
section 355.--
(A) In general.--Except as otherwise provided in
this paragraph, the amendments made by subsection (b)
shall apply to distributions made after May 17, 2006.
(B) Transition rule.--The amendments made by
subsection (b) shall not apply to any distribution
pursuant to a transaction which is--
(i) made pursuant to an agreement which was
binding on May 17, 2006, and at all times
thereafter,
(ii) described in a ruling request
submitted to the Internal Revenue Service on or
before such date, or
(iii) described on or before such date in a
public announcement or in a filing with the
Securities and Exchange Commission.
(C) Election out of transition rule.--Subparagraph
(B) shall not apply if the distributing corporation
elects not to have such subparagraph apply to
distributions of such corporation. Any such election,
once made, shall be irrevocable.
(D) Special rule for certain pre-enactment
distributions.--For purposes of determining the
continued qualification under section 355(b)(2)(A) of
the Internal Revenue Code of 1986 of distributions made
on or before May 17, 2006, as a result of an
acquisition, disposition, or other restructuring after
such date, such distribution shall be treated as made
on the date of such acquisition, disposition, or
restructuring for purposes of applying subparagraphs
(A) through (C) of this paragraph. The preceding
sentence shall only apply with respect to the
corporation that undertakes such acquisition,
disposition, or other restructuring, and only if such
application results in continued qualification under
section 355(b)(2)(A) of such Code.
(3) Amendment related to section 515 of the act.--The
amendment made by subsection (c) shall apply to taxable years
beginning after December 31, 2006.
SEC. 305. AMENDMENTS RELATED TO THE SAFE, ACCOUNTABLE, FLEXIBLE,
EFFICIENT TRANSPORTATION EQUITY ACT: A LEGACY FOR USERS.
(a) Amendments Related to Section 11113 of the Act.--
(1) Paragraph (3) of section 6427(i) is amended--
(A) by inserting ``or under subsection (e)(2) by
any person with respect to an alternative fuel (as
defined in section 6426(d)(2))'' after ``section 6426''
in subparagraph (A),
(B) by inserting ``or (e)(2)'' after ``subsection
(e)(1)'' in subparagraphs (A)(i) and (B), and
(C) by striking ``alcohol fuel and biodiesel
mixture credit'' and inserting ``mixture credits and
the alternative fuel credit'' in the heading thereof.
(2) Subparagraph (F) of section 6426(d)(2) is amended by
striking ``hydrocarbons'' and inserting ``fuel''.
(3) Section 6426 is amended by adding at the end the
following new subsection:
``(h) Denial of Double Benefit.--No credit shall be determined
under subsection (d) or (e) with respect to any fuel with respect to
which credit may be determined under subsection (b) or (c) or under
section 40 or 40A.''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the SAFETEA-LU to which they
relate.
SEC. 306. AMENDMENTS RELATED TO THE ENERGY POLICY ACT OF 2005.
(a) Amendment Related to Section 1306 of the Act.--Paragraph (2) of
section 45J(b) is amended to read as follows:
``(2) Amount of national limitation.--The aggregate amount
of national megawatt capacity limitation allocated by the
Secretary under paragraph (3) shall not exceed 6,000
megawatts.''.
(b) Amendments Related to Section 1342 of the Act.--
(1) So much of subsection (b) of section 30C as precedes
paragraph (1) thereof is amended to read as follows:
``(b) Limitation.--The credit allowed under subsection (a) with
respect to all qualified alternative fuel vehicle refueling property
placed in service by the taxpayer during the taxable year at a location
shall not
exceed--''.
(2) Subsection (c) of section 30C is amended to read as
follows:
``(c) Qualified Alternative Fuel Vehicle Refueling Property.--For
purposes of this section, the term `qualified alternative fuel vehicle
refueling property' has the same meaning as the term `qualified clean-
fuel vehicle refueling property' would have under section 179A if--
``(1) paragraph (1) of section 179A(d) did not apply to
property installed on property which is used as the principal
residence (within the meaning of section 121) of the taxpayer,
and
``(2) only the following were treated as clean-burning
fuels for purposes of section 179A(d):
``(A) Any fuel at least 85 percent of the volume of
which consists of one or more of the following:
ethanol, natural gas, compressed natural gas, liquified
natural gas, liquefied petroleum gas, or hydrogen.
``(B) Any mixture--
``(i) which consists of two or more of the
following: biodiesel (as defined in section
40A(d)(1)), diesel fuel (as defined in section
4083(a)(3)), or kerosene, and
``(ii) at least 20 percent of the volume of
which consists of biodiesel (as so defined)
determined without regard to any kerosene in
such mixture.''.
(c) Amendments Related to Section 1351 of the Act.--
(1) Paragraph (3) of section 41(a) is amended by inserting
``for energy research'' before the period at the end.
(2) Paragraph (6) of section 41(f) is amended by adding at
the end the following new subparagraph:
``(E) Energy research.--The term `energy research'
does not include any research which is not qualified
research.''.
(d) Amendments Related to Section 1362 of the Act.--
(1)(A) Paragraph (1) of section 4041(d) is amended by
adding at the end the following new sentence: ``No tax shall be
imposed under the preceding sentence on the sale or use of any
liquid if tax was imposed with respect to such liquid under
section 4081 at the Leaking Underground Storage Tank Trust Fund
financing rate.''.
(B) Paragraph (3) of section 4042(b) is amended to read as
follows:
``(3) Exception for fuel on which leaking underground
storage tank trust fund financing rate separately imposed.--The
Leaking Underground Storage Tank Trust Fund financing rate
under paragraph (2)(B) shall not apply to the use of any fuel
if tax was imposed with respect to such fuel under section
4041(d) or 4081 at the Leaking Underground Storage Tank Trust
Fund financing rate.''.
(C) Notwithstanding section 6430 of the Internal Revenue
Code of 1986, a refund, credit, or payment may be made under
subchapter B of chapter 65 of such Code for taxes imposed with
respect to any liquid after September 30, 2005, and before the
date of the enactment of this Act under section 4041(d)(1) or
4042 of such Code at the Leaking Underground Storage Tank Trust
Fund financing rate to the extent that tax was imposed with
respect to such liquid under section 4081 at the Leaking
Underground Storage Tank Trust Fund financing rate.
(2)(A) Paragraph (5) of section 4041(d) is amended--
(i) by striking ``(other than with respect to any
sale for export under paragraph (3) thereof)'', and
(ii) by adding at the end the following new
sentence: ``The preceding sentence shall not apply with
respect to subsection (g)(3) and so much of subsection
(g)(1) as relates to vessels (within the meaning of
section 4221(d)(3)) employed in foreign trade or trade
between the United States and any of its
possessions.''.
(B) Section 4082 is amended--
(i) by striking ``(other than such tax at the
Leaking Underground Storage Tank Trust Fund financing
rate imposed in all cases other than for export)'' in
subsection (a), and
(ii) by redesignating subsections (f) and (g) as
subsections (g) and (h), respectively, and by inserting
after subsection (e) the following new subsection:
``(f) Exception for Leaking Underground Storage Tank Trust Fund
Financing Rate.--
``(1) In general.--Subsection (a) shall not apply to the
tax imposed under section 4081 at the Leaking Underground
Storage Tank Trust Fund financing rate.
``(2) Exception for export, etc.--Paragraph (1) shall not
apply with respect to any fuel if the Secretary determines that
such fuel is destined for export or for use by the purchaser as
supplies for vessels (within the meaning of section 4221(d)(3))
employed in foreign trade or trade between the United States
and any of its possessions.''.
(C) Subsection (e) of section 4082 is amended--
(i) by striking ``an aircraft, the rate of tax
under section 4081(a)(2)(A)(iii) shall be zero.'' and
inserting ``an aircraft--
``(1) the rate of tax under section 4081(a)(2)(A)(iii)
shall be zero, and
``(2) if such aircraft is employed in foreign trade or
trade between the United States and any of its possessions, the
increase in such rate under section 4081(a)(2)(B) shall be
zero.''; and
(ii) by moving the last sentence flush with the
margin of such subsection (following the paragraph (2)
added by clause (i)).
(D) Section 6430 is amended to read as follows:
``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND STORAGE
TANK TRUST FUND FINANCING RATE.
``No refunds, credits, or payments shall be made under this
subchapter for any tax imposed at the Leaking Underground Storage Tank
Trust Fund financing rate, except in the case of fuels--
``(1) which are exempt from tax under section 4081(a) by
reason of section 4082(f)(2),
``(2) which are exempt from tax under section 4041(d) by
reason of the last sentence of paragraph (5) thereof, or
``(3) with respect to which the rate increase under section
4081(a)(2)(B) is zero by reason of section 4082(e)(2).''.
(3) Paragraph (5) of section 4041(d) is amended by
inserting ``(b)(1)(A),'' after ``subsections''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect as if included in the provisions of the Energy Policy
Act of 2005 to which they relate.
(2) Nonapplication of exemption for off-highway business
use.--The amendment made by subsection (d)(3) shall apply to
fuel sold for use or used after the date of the enactment of
this Act.
(3) Amendment made by the safetea-lu.--The amendment made
by subsection (d)(2)(C)(ii) shall take effect as if included in
section 11161 of the SAFETEA-LU.
SEC. 307. AMENDMENTS RELATED TO THE AMERICAN JOBS CREATION ACT OF 2004.
(a) Amendments Related to Section 339 of the Act.--
(1)(A) Section 45H is amended by striking subsection (d)
and by redesignating subsections (e), (f), and (g) as
subsections (d), (e), and (f), respectively.
(B) Subsection (d) of section 280C is amended to read as
follows:
``(d) Credit for Low Sulfur Diesel Fuel Production.--The deductions
otherwise allowed under this chapter for the taxable year shall be
reduced by the amount of the credit determined for the taxable year
under section 45H(a).''.
(C) Subsection (a) of section 1016 is amended by striking
paragraph (31) and by redesignating paragraphs (32) through
(37) as paragraphs (31) through (36), respectively.
(2)(A) Section 45H, as amended by paragraph (1), is amended
by adding at the end the following new subsection:
``(g) Election to Not Take Credit.--No credit shall be determined
under subsection (a) for the taxable year if the taxpayer elects not to
have subsection (a) apply to such taxable year.''.
(B) Subsection (m) of section 6501 is amended by inserting
``45H(g),'' after ``45C(d)(4),''.
(3)(A) Subsections (b)(1)(A), (c)(2), (e)(1), and (e)(2) of
section 45H (as amended by paragraph (1)) and section 179B(a)
are each amended by striking ``qualified capital costs'' and
inserting ``qualified costs''.
(B) The heading of paragraph (2) of section 45H(c) is
amended by striking ``capital''.
(C) Subsection (a) of section 179B is amended by inserting
``and which are properly chargeable to capital account'' before
the period at the end.
(b) Amendments Related to Section 710 of the Act.--
(1) Clause (ii) of section 45(c)(3)(A) is amended by
striking ``which is segregated from other waste materials
and''.
(2) Subparagraph (B) of section 45(d)(2) is amended by
inserting ``and'' at the end of clause (i), by striking clause
(ii), and by redesignating clause (iii) as clause (ii).
(c) Amendments Related to Section 848 of the Act.--
(1) Paragraph (2) of section 470(c) is amended to read as
follows:
``(2) Tax-exempt use property.--
``(A) In general.--The term `tax-exempt use
property' has the meaning given to such term by section
168(h), except that such section shall be applied--
``(i) without regard to paragraphs (1)(C)
and (3) thereof, and
``(ii) as if section 197 intangible
property (as defined in section 197), and
property described in paragraph (1)(B) or (2)
of section 167(f), were tangible property.
``(B) Exception for partnerships.--Such term shall
not include any property which would (but for this
subparagraph) be tax-exempt use property solely by
reason of section 168(h)(6).
``(C) Cross reference.--For treatment of
partnerships as leases to which section 168(h) applies,
see section 7701(e).''.
(2) Subparagraph (A) of section 470(d)(1) is amended by
striking ``(at any time during the lease term)'' and inserting
``(at all times during the lease term)''.
(d) Amendments Related to Section 888 of the Act.--
(1) Subparagraph (A) of section 1092(a)(2) is amended by
striking ``and'' at the end of clause (ii), by redesignating
clause (iii) as clause (iv), and by inserting after clause (ii)
the following new clause:
``(iii) if the application of clause (ii)
does not result in an increase in the basis of
any offsetting position in the identified
straddle, the basis of each of the offsetting
positions in the identified straddle shall be
increased in a manner which--
``(I) is reasonable, consistent
with the purposes of this paragraph,
and consistently applied by the
taxpayer, and
``(II) results in an aggregate
increase in the basis of such
offsetting positions which is equal to
the loss described in clause (ii),
and''.
(2)(A) Subparagraph (B) of section 1092(a)(2) is amended by
adding at the end the following flush sentence:
``A straddle shall be treated as clearly identified for
purposes of clause (i) only if such identification
includes an identification of the positions in the
straddle which are offsetting with respect other
positions in the straddle.''.
(B) Subparagraph (A) of section 1092(a)(2) is amended--
(i) by striking ``identified positions'' in clause
(i) and inserting ``positions'',
(ii) by striking ``identified position'' in clause
(ii) and inserting ``position'', and
(iii) by striking ``identified offsetting
positions'' in clause (ii) and inserting ``offsetting
positions''.
(C) Subparagraph (B) of section 1092(a)(3) is amended by
striking ``identified offsetting position'' and inserting
``offsetting position''.
(3) Paragraph (2) of section 1092(a) is amended by
redesignating subparagraph (C) as subparagraph (D) and
inserting after subparagraph (B) the following new
subparagraph:
``(C) Application to liabilities and obligations.--
Except as otherwise provided by the Secretary, rules
similar to the rules of clauses (ii) and (iii) of
subparagraph (A) shall apply for purposes of this
paragraph with respect to any position which is, or has
been, a liability or obligation.''.
(4) Subparagraph (D) of section 1092(a)(2), as redesignated
by paragraph (3), is amended by inserting ``the rules for the
application of this section to a position which is or has been
a liability or obligation, methods of loss allocation which
satisfy the requirements of subparagraph (A)(iii),'' before
``and the ordering rules''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect as if included in the provisions of the American Jobs
Creation Act of 2004 to which they relate.
(2) Identification requirement of amendment related to
section 888 of the american jobs creation act of 2004.--The
amendment made by subsection (d)(2)(A) shall apply to straddles
acquired after the date of the enactment of this Act.
SEC. 308. AMENDMENTS RELATED TO THE ECONOMIC GROWTH AND TAX RELIEF
RECONCILIATION ACT OF 2001.
(a) Amendments Related to Section 617 of the Act.--
(1) Subclause (II) of section 402(g)(7)(A)(ii) is amended
by striking ``for prior taxable years'' and inserting
``permitted for prior taxable years by reason of this
paragraph''.
(2) Subparagraph (A) of section 3121(v)(1) is amended by
inserting ``or consisting of designated Roth contributions (as
defined in section 402A(c))'' before the comma at the end.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 to which they relate.
SEC. 309. AMENDMENTS RELATED TO THE TAX RELIEF EXTENSION ACT OF 1999.
(a) Amendment Related to Section 507 of the Act.--Clause (i) of
section 45(e)(7)(A) is amended by striking ``placed in service by the
taxpayer'' and inserting ``originally placed in service''.
(b) Amendment Related to Section 542 of the Act.--Clause (ii) of
section 856(d)(9)(D) is amended to read as follows:
``(ii) Lodging facility.--The term `lodging
facility' means a--
``(I) hotel,
``(II) motel, or
``(III) other establishment more
than one-half of the dwelling units in
which are used on a transient basis.''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Tax Relief Extension Act
of 1999 to which they relate.
SEC. 310. AMENDMENT RELATED TO THE INTERNAL REVENUE SERVICE
RESTRUCTURING AND REFORM ACT OF 1998.
(a) Amendment Related to Section 3509 of the Act.--Paragraph (3) of
section 6110(i) is amended by inserting ``and related background file
documents'' after ``Chief Counsel advice'' in the matter preceding
subparagraph (A).
(b) Effective Date.--The amendment made by this section shall take
effect as if included in the provision of the Internal Revenue Service
Restructuring and Reform Act of 1998 to which it relates.
SEC. 311. CLERICAL CORRECTIONS.
(a) In General.--
(1) Paragraph (5) of section 21(e) is amended by striking
``section 152(e)(3)(A)'' in the flush matter after subparagraph
(B) and inserting ``section 152(e)(4)(A)''.
(2) Paragraph (3) of section 25C(c) is amended by striking
``section 3280'' and inserting ``part 3280''.
(3) Paragraph (2) of section 26(b) is amended by
redesignating subparagraphs (S) and (T) as subparagraphs (U)
and (V), respectively, and by inserting after subparagraph (R)
the following new subparagraphs:
``(S) sections 106(e)(3)(A)(ii),
223(b)(8)(B)(i)(II), and 408(d)(9)(D)(i)(II) (relating
to certain failures to maintain high deductible health
plan coverage),
``(T) section 170(o)(3)(B) (relating to recapture
of certain deductions for fractional gifts),''.
(4) Subsection (a) of section 34 is amended--
(A) in paragraph (1), by striking ``with respect to
gasoline used during the taxable year on a farm for
farming purposes'',
(B) in paragraph (2), by striking ``with respect to
gasoline used during the taxable year (A) otherwise
than as a fuel in a highway vehicle or (B) in vehicles
while engaged in furnishing certain public passenger
land transportation service'', and
(C) in paragraph (3), by striking ``with respect to
fuels used for nontaxable purposes or resold during the
taxable year''.
(5) Paragraph (2) of section 35(d) is amended--
(A) by striking ``paragraph (2) or (4) of'', and
(B) by striking ``(within the meaning of section
152(e)(1))'' and inserting ``(as defined in section
152(e)(4)(A))''.
(6) Subsection (b) of section 38 is amended--
(A) by striking ``and'' each place it appears at
the end of any paragraph,
(B) by striking ``plus'' each place it appears at
the end of any paragraph, and
(C) by inserting ``plus'' at the end of paragraph
(30).
(7) Paragraphs (2) and (3) of section 45L(c) are each
amended by striking ``section 3280'' and inserting ``part
3280''.
(8) Subsection (c) of section 48 is amended by striking
``subsection'' in the text preceding paragraph (1) and
inserting ``section''.
(9) Paragraphs (1)(B) and (2)(B) of section 48(c) are each
amended by striking ``paragraph (1)'' and inserting
``subsection (a)''.
(10) Clause (ii) of section 48A(d)(4)(B) is amended by
striking ``subsection'' both places it appears.
(11) The last sentence of section 125(b)(2) is amended by
striking ``last sentence'' and inserting ``second sentence''.
(12) Subclause (II) of section 167(g)(8)(C)(ii) is amended
by striking ``section 263A(j)(2)'' and inserting ``section
263A(i)(2)''.
(13)(A) Clause (vii) of section 170(b)(1)(A) is amended by
striking ``subparagraph (E)'' and inserting ``subparagraph
(F)''.
(B) Clause (ii) of section 170(e)(1)(B) is amended by
striking ``subsection (b)(1)(E)'' and inserting ``subsection
(b)(1)(F)''.
(C) Clause (i) of section 1400S(a)(2)(A) is amended by
striking ``subparagraph (F)'' and inserting ``subparagraph
(G)''.
(D) Subparagraph (A) of section 4942(i)(1) is amended by
striking ``section 170(b)(1)(E)(ii)'' and inserting ``section
170(b)(1)(F)(ii)''.
(14) Subclause (II) of section 170(e)(1)(B)(i) is amended
by inserting ``, but without regard to clause (ii) thereof''
after ``paragraph (7)(C)''.
(15)(A) Subparagraph (A) of section 170(o)(1) and
subparagraph (A) of section 2522(e)(1) are each amended by
striking ``all interest in the property is'' and inserting
``all interests in the property are''.
(B) Section 170(o)(3)(A)(i), and section 2522(e)(2)(A)(i)
(as redesignated by section 403(d)(2)), are each amended--
(i) by striking ``interest'' and inserting
``interests'', and
(ii) by striking ``before'' and inserting ``on or
before''.
(16)(A) Subparagraph (C) of section 852(b)(4) is amended to
read as follows:
``(C) Determination of holding periods.--For
purposes of this paragraph, in determining the period
for which the taxpayer has held any share of stock--
``(i) the rules of paragraphs (3) and (4)
of section 246(c) shall apply, and
``(ii) there shall not be taken into
account any day which is more than 6 months
after the date on which such share becomes ex-
dividend.''.
(B) Subparagraph (B) of section 857(b)(8) is amended to
read as follows:
``(B) Determination of holding periods.--For
purposes of this paragraph, in determining the period
for which the taxpayer has held any share of stock or
beneficial interest--
``(i) the rules of paragraphs (3) and (4)
of section 246(c) shall apply, and
``(ii) there shall not be taken into
account any day which is more than 6 months
after the date on which such share or interest
becomes ex-dividend.''.
(17) Paragraph (2) of section 856(l) is amended by striking
the last sentence and inserting the following: ``For purposes
of subparagraph (B), securities described in subsection
(m)(2)(A) shall not be taken into account.''.
(18) Subparagraph (F) of section 954(c)(1) is amended to
read as follows:
``(F) Income from notional principal contracts.--
``(i) In general.--Net income from notional
principal contracts.
``(ii) Coordination with other categories
of foreign personal holding company income.--
Any item of income, gain, deduction, or loss
from a notional principal contract entered into
for purposes of hedging any item described in
any preceding subparagraph shall not be taken
into account for purposes of this subparagraph
but shall be taken into account under such
other subparagraph.''.
(19) Paragraph (1) of section 954(c) is amended by
redesignating subparagraph (I) as subparagraph (H).
(20) Paragraph (33) of section 1016(a), as redesignated by
section 407(a)(1)(C), is amended by striking ``section 25C(e)''
and inserting ``section 25C(f)''.
(21) Paragraph (36) of section 1016(a), as redesignated by
section 407(a)(1)(C), is amended by striking ``section 30C(f)''
and inserting ``section 30C(e)(1)''.
(22) Subparagraph (G) of section 1260(c)(2) is amended by
adding ``and'' at the end.
(23)(A) Section 1297 is amended by striking subsection (d)
and by redesignating subsections (e) and (f) as subsections (d)
and (e), respectively.
(B) Subparagraph (G) of section 1260(c)(2) is amended by
striking ``subsection (e)'' and inserting ``subsection (d)''.
(C) Subparagraph (B) of section 1298(a)(2) is amended by
striking ``Section 1297(e)'' and inserting ``Section 1297(d)''.
(24) Paragraph (1) of section 1362(f) is amended--
(A) by striking ``, section 1361(b)(3)(B)(ii), or
section 1361(c)(1)(A)(ii)'' and inserting ``or section
1361(b)(3)(B)(ii)'', and
(B) by striking ``, section 1361(b)(3)(C), or
section 1361(c)(1)(D)(iii)'' in subparagraph (B) and
inserting ``or section 1361(b)(3)(C)''.
(25) Paragraph (2) of section 1400O is amended by striking
``under of'' and inserting ``under''.
(26) The table of sections for part II of subchapter Y of
chapter 1 is amended by adding at the end the following new
item:
``Sec. 1400T. Special rules for mortgage revenue bonds.''.
(27) Subsection (b) of section 4082 is amended to read as
follows:
``(b) Nontaxable Use.--For purposes of this section, the term
`nontaxable use' means--
``(1) any use which is exempt from the tax imposed by
section 4041(a)(1) other than by reason of a prior imposition
of tax,
``(2) any use in a train, and
``(3) any use described in section 4041(a)(1)(C)(iii)(II).
The term `nontaxable use' does not include the use of kerosene in an
aircraft and such term shall not include any use described in section
6421(e)(2)(C).''.
(28) Paragraph (4) of section 4101(a) (relating to
registration in event of change of ownership) is redesignated
as paragraph (5).
(29) Paragraph (6) of section 4965(c) is amended by
striking ``section 4457(e)(1)(A)'' and inserting ``section
457(e)(1)(A)''.
(30) Subpart C of part II of subchapter A of chapter 51 is
amended by redesignating section 5432 (relating to
recordkeeping by wholesale dealers) as section 5121.
(31) Paragraph (2) of section 5732(c), as redesignated by
section 11125(b)(20)(A) of the SAFETEA-LU, is amended by
striking ``this subpart'' and inserting ``this subchapter''.
(32) Subsection (b) of section 6046 is amended--
(A) by striking ``subsection (a)(1)'' and inserting
``subsection (a)(1)(A)'', and
(B) by striking ``paragraph (2) or (3) of
subsection (a)'' and inserting ``subparagraph (B) or
(C) of subsection (a)(1)''.
(33)(A) Subparagraph (A) of section 6103(b)(5) is amended
by striking ``the Canal Zone,''.
(B) Section 7651 is amended by striking paragraph (4) and
by redesignating paragraph (5) as paragraph (4).
(34) Subparagraph (A) of section 6211(b)(4) is amended by
striking ``and 34'' and inserting ``34, and 35''.
(35) Subparagraphs (A) and (B) of section 6230(a)(3) are
each amended by striking ``section 6013(e)'' and inserting
``section 6015''.
(36) Paragraph (3) of section 6427(e) (relating to
termination), as added by section 11113 of the SAFETEA-LU, is
redesignated as paragraph (5) and moved after paragraph (4).
(37) Clause (ii) of section 6427(l)(4)(A) is amended by
striking ``section 4081(a)(2)(iii)'' and inserting ``section
4081(a)(2)(A)(iii)''.
(38)(A) Section 6427, as amended by section 1343(b)(1) of
the Energy Policy Act of 2005, is amended by striking
subsection (p) (relating to gasohol used in noncommercial
aviation) and redesignating subsection (q) as subsection (p).
(B) The Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by paragraph (2) of
section 11151(a) of the SAFETEA-LU had never been enacted.
(39) Subsection (a) of section 6695A is amended by striking
``then such person'' in paragraph (2) and inserting the
following:
``then such person''.
(40) Subparagraph (C) of section 6707A(e)(2) is amended by
striking ``section 6662A(e)(2)(C)'' and inserting ``section
6662A(e)(2)(B)''.
(41)(A) Paragraph (3) of section 9002 is amended by
striking ``section 309(a)(1)'' and inserting ``section
306(a)(1)''.
(B) Paragraph (1) of section 9004(a) is amended by striking
``section 320(b)(1)(B)'' and inserting ``section
315(b)(1)(B)''.
(C) Paragraph (3) of section 9032 is amended by striking
``section 309(a)(1)'' and inserting ``section 306(a)(1)''.
(D) Subsection (b) of section 9034 is amended by striking
``section 320(b)(1)(A)'' and inserting ``section
315(b)(1)(A)''.
(42) Section 9006 is amended by striking ``Comptroller
General'' each place it appears and inserting ``Commission''.
(43) Subsection (c) of section 9503 is amended by
redesignating paragraph (7) (relating to transfers from the
trust fund for certain aviation fuels taxes) as paragraph (6).
(44) Paragraph (1) of section 1301(g) of the Energy Policy
Act of 2005 is amended by striking ``shall take effect of the
date of the enactment'' and inserting ``shall take effect on
the date of the enactment''.
(45) The Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by section 1(a) of
Public Law 109-433 had never been enacted.
(b) Clerical Amendments Related to the Tax Relief and Health Care
Act of 2006.--
(1) Amendment related to section 209 of division a of the
act.--Paragraph (3) of section 168(l) is amended by striking
``enzymatic''.
(2) Amendments related to section 419 of division a of the
act.--
(A) Clause (iv) of section 6724(d)(1)(B) is amended
by inserting ``or (h)(1)'' after ``section 6050H(a)''.
(B) Subparagraph (K) of section 6724(d)(2) is
amended by inserting ``or (h)(2)'' after ``section
6050H(d)''.
(3) Effective date.--The amendments made by this subsection
shall take effect as if included in the provision of the Tax
Relief and Health Care Act of 2006 to which they relate.
(c) Clerical Amendments Related to the Gulf Opportunity Zone Act of
2005.--
(1) Amendments related to section 402 of the act.--
Subparagraph (B) of section 24(d)(1) is amended--
(A) by striking ``the excess (if any) of'' in the
matter preceding clause (i) and inserting ``the greater
of'', and
(B) by striking ``section'' in clause (ii)(II) and
inserting ``section 32''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the Gulf
Opportunity Zone Act of 2005 to which they relate.
(d) Clerical Amendments Related to the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users.--
(1) Amendments related to section 11163 of the act.--
Subparagraph (C) of section 6416(a)(4) is amended--
(A) by striking ``ultimate vendor'' and all that
follows through ``has certified'' and inserting
``ultimate vendor or credit card issuer has
certified'', and
(B) by striking ``all ultimate purchasers of the
vendor'' and all that follows through ``are certified''
and inserting ``all ultimate purchasers of the vendor
or credit card issuer are certified''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users to which they relate.
(e) Clerical Amendments Related to the Energy Policy Act of 2005.--
(1) Amendment related to section 1344 of the act.--
Subparagraph (B) of section 6427(e)(5), as redesignated by
subsection (a)(36), is amended by striking ``2006'' and
inserting ``2008''.
(2) Amendments related to section 1351 of the act.--
Subparagraphs (A)(ii) and (B)(ii) of section 41(f)(1) are each
amended by striking ``qualified research expenses and basic
research payments'' and inserting ``qualified research
expenses, basic research payments, and amounts paid or incurred
to energy research consortiums,''.
(3) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the
Energy Policy Act of 2005 to which they relate.
(f) Clerical Amendments Related to the American Jobs Creation Act
of 2004.--
(1) Amendment related to section 301 of the act.--Section
9502 is amended by striking subsection (e) and redesignating
subsection (f) as subsection (e).
(2) Amendment related to section 413 of the act.--
Subsection (b) of section 1298 is amended by striking paragraph
(7) and by redesignating paragraphs (8) and (9) as paragraphs
(7) and (8), respectively.
(3) Amendment related to section 895 of the act.--Clause
(iv) of section 904(f)(3)(D) is amended by striking ``a
controlled group'' and inserting ``an affiliated group''.
(4) Effective date.--The amendments made by this subsection
shall take effect as if included in the provisions of the
American Jobs Creation Act of 2004 to which they relate.
(g) Clerical Amendments Related to the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000.--
(1) Subclause (I) of section 56(g)(4)(C)(ii) is amended by
striking ``921'' and inserting ``921 (as in effect before its
repeal by the FSC Repeal and Extraterritorial Income Exclusion
Act of 2000)''.
(2) Clause (iv) of section 54(g)(4)(C) is amended by
striking ``a cooperative described in section 927(a)(4)'' and
inserting ``an organization to which part I of subchapter T
(relating to tax treatment of cooperatives) applies which is
engaged in the marketing of agricultural or horticultural
products''.
(3) Paragraph (4) of section 245(c) is amended by adding at
the end the following new subparagraph:
``(C) FSC.--The term `FSC' has the meaning given
such term by section 922.''.
(4) Subsection (c) of section 245 is amended by inserting
at the end the following new paragraph:
``(5) References to prior law.--Any reference in this
subsection to section 922, 923, or 927 shall be treated as a
reference to such section as in effect before its repeal by the
FSC Repeal and Extraterritorial Income Exclusion Act of
2000.''.
(5) Paragraph (4) of section 275(a) is amended by striking
``if'' and all that follows and inserting ``if the taxpayer
chooses to take to any extent the benefits of section 901.''.
(6)(A) Subsection (a) of section 291 is amended by striking
paragraph (4) and by redesignating paragraph (5) as paragraph
(4).
(B) Paragraph (1) of section 291(c) is amended by striking
``subsection (a)(5)'' and inserting ``subsection (a)(4)''.
(7)(A) Paragraph (4) of section 441(b) is amended by
striking ``FSC or''.
(B) Subsection (h) of section 441 is amended--
(i) by striking ``FSC or'' each place it appears,
and
(ii) by striking ``FSC's and'' in the heading
thereof.
(8) Subparagraph (B) of section 884(d)(2) is amended by
inserting before the comma ``(as in effect before their repeal
by the FSC Repeal and Extraterritorial Income Exclusion Act of
2000)''.
(9) Section 901 is amended by striking subsection (h).
(10) Clause (v) of section 904(d)(2)(B) is amended--
(A) by inserting ``and'' at the end of subclause
(I), by striking subclause (II), and by redesignating
subclause (III) as subclause (II),
(B) by striking ``a FSC (or a former FSC)'' in
subclause (II) (as so redesignated) and inserting ``a
former FSC (as defined in section 922)'', and
(C) by adding at the end the following:
``Any reference in subclause (II) to section
922, 923, or 927 shall be treated as a
reference to such section as in effect before
its repeal by the FSC Repeal and
Extraterritorial Income Exclusion Act of
2000.''.
(11) Subsection (b) of section 906 is amended by striking
paragraph (5) and redesignating paragraphs (6) and (7) as
paragraphs (5) and (6), respectively.
(12) Subparagraph (B) of section 936(f)(2) is amended by
striking ``FSC or''.
(13) Section 951 is amended by striking subsection (c) and
by redesignating subsection (d) as subsection (c).
(14) Subsection (b) of section 952 is amended by striking
the second sentence.
(15)(A) Paragraph (2) of section 956(c) is amended--
(i) by striking subparagraph (I) and by
redesignating subparagraphs (J) through (M) as
subparagraphs (I) through (L), respectively, and
(ii) by striking ``subparagraphs (J), (K), and
(L)'' in the flush sentence at the end and inserting
``subparagraphs (I), (J), and (K)''.
(B) Clause (ii) of section 954(c)(2)(C) is amended by
striking ``section 956(c)(2)(J)'' and inserting ``section
956(c)(2)(I)''.
(16) Paragraph (1) of section 992(a) is amended by striking
subparagraph (E), by inserting ``and'' at the end of
subparagraph (C), and by striking ``, and'' at the end of
subparagraph (D) and inserting a period.
(17) Paragraph (5) of section 1248(d) is amended--
(A) by inserting ``(as defined in section 922)''
after ``a FSC'', and
(B) by adding at the end the following new
sentence: ``Any reference in this paragraph to section
922, 923, or 927 shall be treated as a reference to
such section as in effect before its repeal by the FSC
Repeal and Extraterritorial Income Exclusion Act of
2000.''.
(18) Subparagraph (D) of section 1297(b)(2) is amended by
striking ``foreign trade income of a FSC or''.
(19)(A) Paragraph (1) of section 6011(c) is amended by
striking ``or former DISC or a FSC or former FSC'' and
inserting ``, former DISC, or former FSC (as defined in section
922 as in effect before its repeal by the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000)''.
(B) Subsection (c) of section 6011 is amended by striking
``and FSC's'' in the heading thereof.
(20) Subsection (c) of section 6072 is amended by striking
``a FSC or former FSC'' and inserting ``a former FSC (as
defined in section 922 as in effect before its repeal by the
FSC Repeal and Extraterritorial Income Exclusion Act of
2000)''.
(21) Section 6686 is amended by inserting ``FORMER'' before
``FSC'' in the heading thereof.
TITLE IV--PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH
BENEFITS
SEC. 401. PARITY IN APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH
BENEFITS.
(a) Amendment to the Internal Revenue Code of 1986.--Section
9812(f)(3) of the Internal Revenue Code of 1986 is amended by striking
``2007'' and inserting ``2008''.
(b) Amendment to the Employee Retirement Income Security Act of
1974.--Section 712(f) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1185a(f)) is amended by striking ``2007'' and inserting
``2008''.
(c) Amendment to the Public Health Service Act.--Section 2705(f) of
the Public Health Service Act (42 U.S.C. 300gg-5(f)) is amended by
striking ``2007'' and inserting ``2008''.
(d) Effective Date.--The amendments made by this section shall
apply to benefits for services furnished after December 31, 2007.
Attest:
Secretary.
110th CONGRESS
1st Session
H. R. 3997
_______________________________________________________________________
SENATE AMENDMENT TO HOUSE AMENDMENT TO SENATE AMENDMENT