H.R. 7202 (110th): Temporary Tax Relief Act of 2008

110th Congress, 2007–2009. Text as of Sep 28, 2008 (Introduced).

Status & Summary | PDF | Source: GPO

I

110th CONGRESS

2d Session

H. R. 7202

IN THE HOUSE OF REPRESENTATIVES

September 28, 2008

introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Agriculture, Natural Resources, Energy and Commerce, and Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to extend certain expiring provisions, to provide individual income tax relief, and for other purposes.

1.

Short title, etc

(a)

Short title

This Act may be cited as the Temporary Tax Relief Act of 2008.

(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—Extension of temporary provisions

Subtitle A—Extensions Primarily Affecting Individuals

Sec. 101. Deduction for State and local sales taxes.

Sec. 102. Deduction of qualified tuition and related expenses.

Sec. 103. Treatment of certain dividends of regulated investment companies.

Sec. 104. Tax-free distributions from individual retirement plans for charitable purposes.

Sec. 105. Deduction for certain expenses of elementary and secondary school teachers.

Sec. 106. Stock in RIC for purposes of determining estates of nonresidents not citizens.

Sec. 107. Qualified investment entities.

Sec. 108. Real property tax standard deduction.

Subtitle B—Extensions Primarily Affecting Businesses

Sec. 121. Research credit.

Sec. 122. Indian employment credit.

Sec. 123. New markets tax credit.

Sec. 124. Railroad track maintenance.

Sec. 125. Fifteen-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property.

Sec. 126. Seven-year cost recovery period for motorsports racing track facility.

Sec. 127. Accelerated depreciation for business property on Indian reservation.

Sec. 128. Expensing of environmental remediation costs.

Sec. 129. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.

Sec. 130. Modification of tax treatment of certain payments to controlling exempt organizations.

Sec. 131. Qualified zone academy bonds.

Sec. 132. Tax incentives for investment in the District of Columbia.

Sec. 133. Economic development credit for American Samoa.

Sec. 134. Enhanced charitable deduction for contributions of food inventory.

Sec. 135. Enhanced charitable deduction for contributions of book inventory to public schools.

Sec. 136. Enhanced deduction for qualified computer contributions.

Sec. 137. Basis adjustment to stock of S corporations making charitable contributions of property.

Sec. 138. Work opportunity tax credit for Hurricane Katrina employees.

Sec. 139. Subpart F exception for active financing income.

Sec. 140. Look-thru rule for related controlled foreign corporations.

Sec. 141. Expensing for certain qualified film and television productions.

Subtitle C—Other Extensions

Sec. 151. Authority to disclose information related to terrorist activities made permanent.

Sec. 152. Authority for undercover operations made permanent.

Sec. 153. Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.

Title II—Additional tax relief and other provisions

Sec. 201. Refundable child credit.

Sec. 202. Provisions related to film and television productions.

Sec. 203. Exemption from excise tax for certain arrows designed for use by children.

Sec. 204. Modification of penalty on understatement of taxpayer’s liability by tax return preparer.

Title III—Secure rural schools

Sec. 301. Secure rural schools and community self-determination program.

Title IV—Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008

Sec. 401. Short title.

Sec. 402. Mental health parity.

Title V—Revenue provisions

Sec. 501. 0.2 percent FUTA surtax.

Sec. 502. Nonqualified deferred compensation from certain tax indifferent parties.

Sec. 503. Increase and extension of Oil Spill Liability Trust Fund tax.

Sec. 504. Delay in application of worldwide allocation of interest.

Sec. 505. Time for payment of corporate estimated taxes.

I

Extension of temporary provisions

A

Extensions Primarily Affecting Individuals

101.

Deduction for State and local sales taxes

(a)

In general

Subparagraph (I) of section 164(b)(5) is amended by striking January 1, 2008 and inserting January 1, 2010.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007.

102.

Deduction of qualified tuition and related expenses

(a)

In general

Subsection (e) of section 222 is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007.

(c)

Temporary coordination with Hope and Lifetime learning credit

In the case of any taxpayer for any taxable year beginning in 2008 or 2009, no deduction shall be allowed under section 222 of the Internal Revenue Code of 1986 if—

(1)

the taxpayer’s net Federal income tax reduction which would be attributable to such deduction for such taxable year, is less than

(2)

the credit which would be allowed to the taxpayer for such taxable year under section 25A of such Code (determined without regard to sections 25A(e) and 26 of such Code).

103.

Treatment of certain dividends of regulated investment companies

(a)

Interest-related dividends

Subparagraph (C) of section 871(k)(1) (defining interest-related dividend) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Short-term capital gain dividends

Subparagraph (C) of section 871(k)(2) (defining short-term capital gain dividend) is amended by striking December 31, 2007 and inserting December 31, 2009.

(c)

Effective date

The amendments made by this section shall apply to dividends with respect to taxable years of regulated investment companies beginning after December 31, 2007.

104.

Tax-free distributions from individual retirement plans for charitable purposes

(a)

In general

Subparagraph (F) of section 408(d)(8) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to distributions made in taxable years beginning after December 31, 2007.

105.

Deduction for certain expenses of elementary and secondary school teachers

(a)

In general

Subparagraph (D) of section 62(a)(2) is amended by striking or 2007 and inserting 2007, 2008, or 2009.

(b)

Effective date

The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2007.

106.

Stock in RIC for purposes of determining estates of nonresidents not citizens

(a)

In general

Paragraph (3) of section 2105(d) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to decedents dying after December 31, 2007.

107.

Qualified investment entities

(a)

In general

Clause (ii) of section 897(h)(4)(A) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by subsection (a) shall take effect on January 1, 2008, except that such amendment shall not apply to the application of withholding requirements with respect to any payment made on or before the date of the enactment of this Act.

108.

Real property tax standard deduction

(a)

In general

Subparagraph (C) of section 63(c)(1) is amended by inserting or 2009 after 2008.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2008.

B

Extensions Primarily Affecting Businesses

121.

Research credit

(a)

In general

Subparagraph (B) of section 41(h)(1) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Computation of credit for taxable year in which credit terminates

Paragraph (2) of section 41(h) is amended to read as follows:

(2)

Computation of credit for taxable year in which credit terminates

(A)

In general

In the case of any taxable year with respect to which this section applies to a number of days which is less than the total number of days in such taxable year, the applicable base amount with respect to such taxable year shall be the amount which bears the same ratio to such applicable amount (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year.

(B)

Applicable base amount

For purposes of subparagraph (A), the term applicable base amount means, with respect to any taxable year—

(i)

except as otherwise provided in this subparagraph, the base amount for the taxable year,

(ii)

in the case of a taxable year with respect to which an election under subsection (c)(4) (relating to election of alternative incremental credit) is in effect, the average described in subsection (c)(1)(B) for the taxable year, and

(iii)

in the case of a taxable year with respect to which an election under subsection (c)(5) (relating to election of alternative simplified credit) is in effect, the average qualified research expenses for the 3 taxable years preceding the taxable year.

.

(c)

Conforming amendment

Subparagraph (D) of section 45C(b)(1) is amended by striking December 31, 2007 and inserting December 31, 2009.

(d)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to amounts paid or incurred after December 31, 2007.

(2)

Computation of credit for taxable year in which credit begins

The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2007.

122.

Indian employment credit

(a)

In general

Subsection (f) of section 45A is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007.

123.

New markets tax credit

Subparagraph (D) of section 45D(f)(1) is amended by striking and 2008 and inserting 2008, and 2009.

124.

Railroad track maintenance

(a)

In general

Subsection (f) of section 45G is amended by striking January 1, 2008 and inserting January 1, 2010.

(b)

Effective date

The amendment made by this section shall apply to expenditures paid or incurred during taxable years beginning after December 31, 2007.

125.

Fifteen-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property

(a)

In general

Clauses (iv) and (v) of section 168(e)(3)(E) are each amended by striking January 1, 2008 and inserting January 1, 2010.

(b)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2007.

126.

Seven-year cost recovery period for motorsports racing track facility

(a)

In general

Subparagraph (D) of section 168(i)(15) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to property placed in service after December 31, 2007.

127.

Accelerated depreciation for business property on Indian reservation

(a)

In general

Paragraph (8) of section 168(j) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to property placed in service after December 31, 2007.

128.

Expensing of environmental remediation costs

(a)

In general

Subsection (h) of section 198 is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to expenditures paid or incurred after December 31, 2007.

129.

Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico

(a)

In general

Subparagraph (C) of section 199(d)(8) is amended—

(1)

by striking first 2 taxable years and inserting first 4 taxable years, and

(2)

by striking January 1, 2008 and inserting January 1, 2010.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

130.

Modification of tax treatment of certain payments to controlling exempt organizations

(a)

In general

Clause (iv) of section 512(b)(13)(E) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to payments received or accrued after December 31, 2007.

131.

Qualified zone academy bonds

(a)

In general

Subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section:

54C.

Qualified zone academy bonds

(a)

Qualified zone academy bonds

For purposes of this subchapter, the term qualified zone academy bond means any bond issued as part of an issue if—

(1)

100 percent of the available project proceeds of such issue are to be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency,

(2)

the bond is issued by a State or local government within the jurisdiction of which such academy is located, and

(3)

the issuer—

(A)

designates such bond for purposes of this section,

(B)

certifies that it has written assurances that the private business contribution requirement of subsection (b) will be met with respect to such academy, and

(C)

certifies that it has the written approval of the eligible local education agency for such bond issuance.

(b)

Private business contribution requirement

For purposes of subsection (a), the private business contribution requirement of this subsection is met with respect to any issue if the eligible local education agency that established the qualified zone academy has written commitments from private entities to make qualified contributions having a present value (as of the date of issuance of the issue) of not less than 10 percent of the proceeds of the issue.

(c)

Limitation on amount of bonds designated

(1)

National limitation

There is a national zone academy bond limitation for each calendar year. Such limitation is $400,000,000 for 2008 and 2009, and, except as provided in paragraph (4), zero thereafter.

(2)

Allocation of limitation

The national zone academy bond limitation for a calendar year shall be allocated by the Secretary among the States on the basis of their respective populations of individuals below the poverty line (as defined by the Office of Management and Budget). The limitation amount allocated to a State under the preceding sentence shall be allocated by the State education agency to qualified zone academies within such State.

(3)

Designation subject to limitation amount

The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (a) with respect to any qualified zone academy shall not exceed the limitation amount allocated to such academy under paragraph (2) for such calendar year.

(4)

Carryover of unused limitation

(A)

In general

If for any calendar year—

(i)

the limitation amount for any State, exceeds

(ii)

the amount of bonds issued during such year which are designated under subsection (a) with respect to qualified zone academies within such State,

the limitation amount for such State for the following calendar year shall be increased by the amount of such excess.
(B)

Limitation on carryover

Any carryforward of a limitation amount may be carried only to the first 2 years following the unused limitation year. For purposes of the preceding sentence, a limitation amount shall be treated as used on a first-in first-out basis.

(C)

Coordination with section 1397E

Any carryover determined under section 1397E(e)(4) (relating to carryover of unused limitation) with respect to any State to calendar year 2008 shall be treated for purposes of this section as a carryover with respect to such State for such calendar year under subparagraph (A), and the limitation of subparagraph (B) shall apply to such carryover taking into account the calendar years to which such carryover relates.

(d)

Definitions

For purposes of this section—

(1)

Qualified zone academy

The term qualified zone academy means any public school (or academic program within a public school) which is established by and operated under the supervision of an eligible local education agency to provide education or training below the postsecondary level if—

(A)

such public school or program (as the case may be) is designed in cooperation with business to enhance the academic curriculum, increase graduation and employment rates, and better prepare students for the rigors of college and the increasingly complex workforce,

(B)

students in such public school or program (as the case may be) will be subject to the same academic standards and assessments as other students educated by the eligible local education agency,

(C)

the comprehensive education plan of such public school or program is approved by the eligible local education agency, and

(D)
(i)

such public school is located in an empowerment zone or enterprise community (including any such zone or community designated after the date of the enactment of this section), or

(ii)

there is a reasonable expectation (as of the date of issuance of the bonds) that at least 35 percent of the students attending such school or participating in such program (as the case may be) will be eligible for free or reduced-cost lunches under the school lunch program established under the National School Lunch Act.

(2)

Eligible local education agency

For purposes of this section, the term eligible local education agency means any local educational agency as defined in section 9101 of the Elementary and Secondary Education Act of 1965.

(3)

Qualified purpose

The term qualified purpose means, with respect to any qualified zone academy—

(A)

rehabilitating or repairing the public school facility in which the academy is established,

(B)

providing equipment for use at such academy,

(C)

developing course materials for education to be provided at such academy, and

(D)

training teachers and other school personnel in such academy.

(4)

Qualified contributions

The term qualified contribution means any contribution (of a type and quality acceptable to the eligible local education agency) of—

(A)

equipment for use in the qualified zone academy (including state-of-the-art technology and vocational equipment),

(B)

technical assistance in developing curriculum or in training teachers in order to promote appropriate market driven technology in the classroom,

(C)

services of employees as volunteer mentors,

(D)

internships, field trips, or other educational opportunities outside the academy for students, or

(E)

any other property or service specified by the eligible local education agency.

.

(b)

Conforming amendments

(1)

Paragraph (1) of section 54A(d) is amended to read as follows:

(1)

Qualified tax credit bond

The term qualified tax credit bond means—

(A)

a qualified forestry conservation bond, or

(B)

a qualified zone academy bond,

which is part of an issue that meets the requirements of paragraphs (2), (3), (4), (5), and (6).

.

(2)

Subparagraph (C) of section 54A(d)(2) is amended to read as follows:

(C)

Qualified purpose

For purposes of this paragraph, the term qualified purpose means—

(i)

in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e), and

(ii)

in the case of a qualified zone academy bond, a purpose specified in section 54C(a)(1).

.

(3)

Section 1397E is amended by adding at the end the following new subsection:

(m)

Termination

This section shall not apply to any obligation issued after the date of the enactment of this subsection.

.

(4)

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

Sec. 54C. Qualified zone academy bonds.

.

(c)

Effective date

The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.

132.

Tax incentives for investment in the District of Columbia

(a)

Designation of Zone

(1)

In general

Subsection (f) of section 1400 is amended by striking 2007 both places it appears and inserting 2009.

(2)

Effective date

The amendments made by this subsection shall apply to periods beginning after December 31, 2007.

(b)

Tax-Exempt Economic Development Bonds

(1)

In general

Subsection (b) of section 1400A is amended by striking 2007 and inserting 2009.

(2)

Effective date

The amendment made by this subsection shall apply to bonds issued after December 31, 2007.

(c)

Zero Percent Capital Gains Rate

(1)

In general

Subsection (b) of section 1400B is amended by striking 2008 each place it appears and inserting 2010.

(2)

Conforming amendments

(A)

Section 1400B(e)(2) is amended—

(i)

by striking 2012 and inserting 2014, and

(ii)

by striking 2012 in the heading thereof and inserting 2014.

(B)

Section 1400B(g)(2) is amended by striking 2012 and inserting 2014.

(C)

Section 1400F(d) is amended by striking 2012 and inserting 2014.

(3)

Effective dates

(A)

Extension

The amendments made by paragraph (1) shall apply to acquisitions after December 31, 2007.

(B)

Conforming amendments

The amendments made by paragraph (2) shall take effect on the date of the enactment of this Act.

(d)

First-Time Homebuyer Credit

(1)

In general

Subsection (i) of section 1400C is amended by striking 2008 and inserting 2010.

(2)

Effective date

The amendment made by this subsection shall apply to property purchased after December 31, 2007.

133.

Economic development credit for American Samoa

(a)

In general

Subsection (d) of section 119 of division A of the Tax Relief and Health Care Act of 2006 is amended—

(1)

by striking first two taxable years and inserting first 4 taxable years, and

(2)

by striking January 1, 2008 and inserting January 1, 2010.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007.

134.

Enhanced charitable deduction for contributions of food inventory

(a)

In general

Clause (iv) of section 170(e)(3)(C) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to contributions made after December 31, 2007.

135.

Enhanced charitable deduction for contributions of book inventory to public schools

(a)

In general

Clause (iv) of section 170(e)(3)(D) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to contributions made after December 31, 2007.

136.

Enhanced deduction for qualified computer contributions

(a)

In general

Subparagraph (G) of section 170(e)(6) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to contributions made during taxable years beginning after December 31, 2007.

137.

Basis adjustment to stock of S corporations making charitable contributions of property

(a)

In general

The last sentence of section 1367(a)(2) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to contributions made in taxable years beginning after December 31, 2007.

138.

Work opportunity tax credit for Hurricane Katrina employees

(a)

In general

Paragraph (1) of section 201(b) of the Katrina Emergency Tax Relief Act of 2005 is amended by striking 2-year and inserting 4-year.

(b)

Effective date

The amendment made by subsection (a) shall apply to individuals hired after August 27, 2007.

139.

Subpart F exception for active financing income

(a)

Exempt insurance income

Paragraph (10) of section 953(e) (relating to application) is amended—

(1)

by striking January 1, 2009 and inserting January 1, 2010, and

(2)

by striking December 31, 2008 and inserting December 31, 2009.

(b)

Exception to treatment as foreign personal holding company income

Paragraph (9) of section 954(h) (relating to application) is amended by striking January 1, 2009 and inserting January 1, 2010.

140.

Look-thru rule for related controlled foreign corporations

(a)

In general

Subparagraph (C) of section 954(c)(6) (relating to application) is amended by striking January 1, 2009 and inserting January 1, 2010.

(b)

Effective date

The amendment made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2008, and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.

141.

Expensing for certain qualified film and television productions

(a)

In general

Subsection (f) of section 181 is amended by striking December 31, 2008 and inserting December 31, 2009.

(b)

Effective date

The amendment made by this section shall apply to productions commencing after December 31, 2008.

C

Other Extensions

151.

Authority to disclose information related to terrorist activities made permanent

(a)

In general

Subparagraph (C) of section 6103(i)(3) is amended by striking clause (iv).

(b)

Disclosure on request

Paragraph (7) of section 6103(i) is amended by striking subparagraph (E).

(c)

Effective date

The amendments made by this section shall apply to disclosures after the date of the enactment of this Act.

152.

Authority for undercover operations made permanent

(a)

In general

Subsection (c) of section 7608 is amended by striking paragraph (6).

(b)

Effective date

The amendment made by this section shall take effect on January 1, 2008.

153.

Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands

(a)

In general

Paragraph (1) of section 7652(f) is amended by striking January 1, 2008 and inserting January 1, 2010.

(b)

Effective date

The amendment made by this section shall apply to distilled spirits brought into the United States after December 31, 2007.

II

Additional tax relief and other provisions

201.

Refundable child credit

(a)

Modification of threshold amount

Clause (i) of section 24(d)(1)(B) is amended by inserting ($8,500 in the case of taxable years beginning in 2009) after $10,000.

(b)

Effective date

The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2008.

202.

Provisions related to film and television productions

(a)

Modification of limitation on expensing

Subparagraph (A) of section 181(a)(2) is amended to read as follows:

(A)

In general

Paragraph (1) shall not apply to so much of the aggregate cost of any qualified film or television production as exceeds $15,000,000.

.

(b)

Modifications to deduction for domestic activities

(1)

Determination of W-2 wages

Paragraph (2) of section 199(b) is amended by adding at the end the following new subparagraph:

(D)

Special rule for qualified film

In the case of a qualified film, such term shall include compensation for services performed in the United States by actors, production personnel, directors, and producers.

.

(2)

Definition of qualified film

Paragraph (6) of section 199(c) is amended by adding at the end the following: A qualified film shall include any copyrights, trademarks, or other intangibles with respect to such film. The methods and means of distributing a qualified film shall not affect the availability of the deduction under this section..

(3)

Partnerships

Subparagraph (A) of section 199(d)(1) is amended by striking and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting , and, and by adding at the end the following new clause:

(iv)

in the case of each partner of a partnership, or shareholder of an S corporation, who owns (directly or indirectly) at least 20 percent of the capital interests in such partnership or of the stock of such S corporation—

(I)

such partner or shareholder shall be treated as having engaged directly in any film produced by such partnership or S corporation, and

(II)

such partnership or S corporation shall be treated as having engaged directly in any film produced by such partner or shareholder.

.

(c)

Conforming amendment

Section 181(d)(3)(A) is amended by striking actors and all that follows and inserting actors, production personnel, directors, and producers..

(d)

Effective date

(1)

In general

Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2007.

(2)

Expensing

The amendments made by subsection (a) shall apply to qualified film and television productions commencing after December 31, 2007.

203.

Exemption from excise tax for certain arrows designed for use by children

(a)

In general

Paragraph (2) of section 4161(b) (relating to arrows) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:

(B)

Exemption for certain arrow shafts

Subparagraph (A) shall not apply to any shaft measuring 5/16 of an inch or less in diameter and consisting of either—

(i)

all fiberglass and hollow, or

(ii)

all natural wood,

with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its assembly is not suitable for use with a bow described in paragraph (1)(A).

.

(b)

Effective date

The amendments made by this section shall apply to shafts first sold after the date of enactment of this Act.

204.

Modification of penalty on understatement of taxpayer’s liability by tax return preparer

(a)

In general

Subsection (a) of section 6694 (relating to understatement due to unreasonable positions) is amended to read as follows:

(a)

Understatement due to unreasonable positions

(1)

In general

If a tax return preparer—

(A)

prepares any return or claim of refund with respect to which any part of an understatement of liability is due to a position described in paragraph (2), and

(B)

knew (or reasonably should have known) of the position,

such tax return preparer shall pay a penalty with respect to each such return or claim in an amount equal to the greater of $1,000 or 50 percent of the income derived (or to be derived) by the tax return preparer with respect to the return or claim.
(2)

Unreasonable position

(A)

In general

Except as otherwise provided in this paragraph, a position is described in this paragraph unless there is or was substantial authority for the position.

(B)

Disclosed positions

If the position was disclosed as provided in section 6662(d)(2)(B)(ii)(I) and is not a position to which subparagraph (C) applies, the position is described in this paragraph unless there is a reasonable basis for the position.

(C)

Reportable transactions

If the position is with respect to a reportable transaction to which section 6662A applies, the position is described in this paragraph unless it is reasonable to believe that the position would more likely than not be sustained on its merits.

(3)

Reasonable cause exception

No penalty shall be imposed under this subsection if it is shown that there is reasonable cause for the understatement and the tax return preparer acted in good faith.

.

(b)

Effective date

The amendment made by this section shall apply—

(1)

in the case of a position other than a position described in subparagraph (C) of section 6694(a)(2) of the Internal Revenue Code of 1986 (as amended by this section), to returns prepared after May 25, 2007, and

(2)

in the case of a position described in such subparagraph (C), to returns prepared for taxable years beginning after the date of the enactment of this Act.

III

Secure rural schools

301.

Secure rural schools and community self-determination program

(a)

Reauthorization of the secure rural schools and community self-determination act of 2000

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

1.

Short title

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

2.

Purposes

The purposes of this Act are—

(1)

to stabilize and transition payments to counties to provide funding for schools and roads that supplements other available funds;

(2)

to make additional investments in, and create additional employment opportunities through, projects that—

(A)
(i)

improve the maintenance of existing infrastructure;

(ii)

implement stewardship objectives that enhance forest ecosystems; and

(iii)

restore and improve land health and water quality;

(B)

enjoy broad-based support; and

(C)

have objectives that may include—

(i)

road, trail, and infrastructure maintenance or obliteration;

(ii)

soil productivity improvement;

(iii)

improvements in forest ecosystem health;

(iv)

watershed restoration and maintenance;

(v)

the restoration, maintenance, and improvement of wildlife and fish habitat;

(vi)

the control of noxious and exotic weeds; and

(vii)

the reestablishment of native species; and

(3)

to improve cooperative relationships among—

(A)

the people that use and care for Federal land; and

(B)

the agencies that manage the Federal land.

3.

Definitions

In this Act:

(1)

Adjusted share

The term adjusted share means the number equal to the quotient obtained by dividing—

(A)

the number equal to the quotient obtained by dividing—

(i)

the base share for the eligible county; by

(ii)

the income adjustment for the eligible county; by

(B)

the number equal to the sum of the quotients obtained under subparagraph (A) and paragraph (8)(A) for all eligible counties.

(2)

Base share

The term base share means the number equal to the average of—

(A)

the quotient obtained by dividing—

(i)

the number of acres of Federal land described in paragraph (7)(A) in each eligible county; by

(ii)

the total number acres of Federal land in all eligible counties in all eligible States; and

(B)

the quotient obtained by dividing—

(i)

the amount equal to the average of the 3 highest 25-percent payments and safety net payments made to each eligible State for each eligible county during the eligibility period; by

(ii)

the amount equal to the sum of the amounts calculated under clause (i) and paragraph (9)(B)(i) for all eligible counties in all eligible States during the eligibility period.

(3)

County payment

The term county payment means the payment for an eligible county calculated under section 101(b).

(4)

Eligible county

The term eligible county means any county that—

(A)

contains Federal land (as defined in paragraph (7)); and

(B)

elects to receive a share of the State payment or the county payment under section 102(b).

(5)

Eligibility period

The term eligibility period means fiscal year 1986 through fiscal year 1999.

(6)

Eligible state

The term eligible State means a State or territory of the United States that received a 25-percent payment for 1 or more fiscal years of the eligibility period.

(7)

Federal land

The term Federal land means—

(A)

land within the National Forest System, as defined in section 11(a) of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1609(a)) exclusive of the National Grasslands and land utilization projects designated as National Grasslands administered pursuant to the Act of July 22, 1937 (7 U.S.C. 1010–1012); and

(B)

such portions of the revested Oregon and California Railroad and reconveyed Coos Bay Wagon Road grant land as are or may hereafter come under the jurisdiction of the Department of the Interior, which have heretofore or may hereafter be classified as timberlands, and power-site land valuable for timber, that shall be managed, except as provided in the former section 3 of the Act of August 28, 1937 (50 Stat. 875; 43 U.S.C. 1181c), for permanent forest production.

(8)

50-Percent adjusted share

The term 50-percent adjusted share means the number equal to the quotient obtained by dividing—

(A)

the number equal to the quotient obtained by dividing—

(i)

the 50-percent base share for the eligible county; by

(ii)

the income adjustment for the eligible county; by

(B)

the number equal to the sum of the quotients obtained under subparagraph (A) and paragraph (1)(A) for all eligible counties.

(9)

50-Percent base share

The term 50-percent base share means the number equal to the average of—

(A)

the quotient obtained by dividing—

(i)

the number of acres of Federal land described in paragraph (7)(B) in each eligible county; by

(ii)

the total number acres of Federal land in all eligible counties in all eligible States; and

(B)

the quotient obtained by dividing—

(i)

the amount equal to the average of the 3 highest 50-percent payments made to each eligible county during the eligibility period; by

(ii)

the amount equal to the sum of the amounts calculated under clause (i) and paragraph (2)(B)(i) for all eligible counties in all eligible States during the eligibility period.

(10)

50-percent payment

The term 50-percent payment means the payment that is the sum of the 50-percent share otherwise paid to a county pursuant to title II of the Act of August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), and the payment made to a county pursuant to the Act of May 24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f–1 et seq.).

(11)

Full funding amount

The term full funding amount means $500,000,000 for fiscal year 2008.

(12)

Income adjustment

The term income adjustment means the square of the quotient obtained by dividing—

(A)

the per capita personal income for each eligible county; by

(B)

the median per capita personal income of all eligible counties.

(13)

Per capita personal income

The term per capita personal income means the most recent per capita personal income data, as determined by the Bureau of Economic Analysis.

(14)

Safety net payments

The term safety net payments means the special payment amounts paid to States and counties required by section 13982 or 13983 of the Omnibus Budget Reconciliation Act of 1993 (Public Law 103–66; 16 U.S.C. 500 note; 43 U.S.C. 1181f note).

(15)

Secretary concerned

The term Secretary concerned means—

(A)

the Secretary of Agriculture or the designee of the Secretary of Agriculture with respect to the Federal land described in paragraph (7)(A); and

(B)

the Secretary of the Interior or the designee of the Secretary of the Interior with respect to the Federal land described in paragraph (7)(B).

(16)

State payment

The term State payment means the payment for an eligible State calculated under section 101(a).

(17)

25-Percent payment

The term 25-percent payment means the payment to States required by the sixth paragraph under the heading of FOREST SERVICE in the Act of May 23, 1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

I

SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL LAND

101.

Secure payments for States containing Federal land

(a)

State Payment

For fiscal year 2008, the Secretary of Agriculture shall calculate for each eligible State an amount equal to the sum of the products obtained by multiplying—

(1)

the adjusted share for each eligible county within the eligible State; by

(2)

the full funding amount for the fiscal year.

(b)

County Payment

For fiscal year 2008, the Secretary of the Interior shall calculate for each eligible county that received a 50-percent payment during the eligibility period an amount equal to the product obtained by multiplying—

(1)

the 50-percent adjusted share for the eligible county; by

(2)

the full funding amount for the fiscal year.

102.

Payments to States and counties

(a)

Payment Amounts

Except as provided in section 103, the Secretary of the Treasury shall pay to—

(1)

a State or territory of the United States an amount equal to the sum of the amounts elected under subsection (b) by each county within the State or territory for—

(A)

if the county is eligible for the 25-percent payment, the share of the 25-percent payment; or

(B)

the share of the State payment of the eligible county; and

(2)

a county an amount equal to the amount elected under subsection (b) by each county for—

(A)

if the county is eligible for the 50-percent payment, the 50-percent payment; or

(B)

the county payment for the eligible county.

(b)

Election To Receive Payment Amount

(1)

Election; submission of results

(A)

In general

The election to receive a share of the State payment, the county payment, a share of the State payment and the county payment, a share of the 25-percent payment, the 50-percent payment, or a share of the 25-percent payment and the 50-percent payment, as applicable, shall be made at the discretion of each affected county by August 1, 2008 (or as soon thereafter as the Secretary concerned determines is practicable) and transmitted to the Secretary concerned by the Governor of each eligible State.

(B)

Failure to transmit

If an election for an affected county is not transmitted to the Secretary concerned by the date specified under subparagraph (A), the affected county shall be considered to have elected to receive a share of the State payment, the county payment, or a share of the State payment and the county payment, as applicable.

(2)

Source of payment amounts

The payment to an eligible State or eligible county under this section for a fiscal year shall be derived from—

(A)

any amounts that are appropriated to carry out this Act;

(B)

any revenues, fees, penalties, or miscellaneous receipts, exclusive of deposits to any relevant trust fund, special account, or permanent operating funds, received by the Federal Government from activities by the Bureau of Land Management or the Forest Service on the applicable Federal land; and

(C)

to the extent of any shortfall, out of any amounts in the Treasury of the United States not otherwise appropriated.

(c)

Distribution and Expenditure of Payments

(1)

Distribution method

A State that receives a payment under subsection (a) for Federal land described in section 3(7)(A) shall distribute the appropriate payment amount among the appropriate counties in the State in accordance with—

(A)

the Act of May 23, 1908 (16 U.S.C. 500); and

(B)

section 13 of the Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

(2)

Expenditure purposes

Subject to subsection (d), payments received by a State under subsection (a) and distributed to counties in accordance with paragraph (1) shall be expended as required by the laws referred to in paragraph (1).

(d)

Expenditure Rules for Eligible Counties

(1)

Allocations

(A)

Use of portion in same manner as 25-percent payment or 50-percent payment, as applicable

Except as provided in paragraph (3)(B), if an eligible county elects to receive its share of the State payment or the county payment, not less than 80 percent, but not more than 85 percent, of the funds shall be expended in the same manner in which the 25-percent payments or 50-percent payment, as applicable, are required to be expended.

(B)

Election as to use of balance

Except as provided in subparagraph (C), an eligible county shall elect to do 1 or more of the following with the balance of any funds not expended pursuant to subparagraph (A):

(i)

Reserve any portion of the balance for projects in accordance with title II.

(ii)

Reserve not more than 7 percent of the total share for the eligible county of the State payment or the county payment for projects in accordance with title III.

(iii)

Return the portion of the balance not reserved under clauses (i) and (ii) to the Treasury of the United States.

(C)

Counties with modest distributions

In the case of each eligible county to which more than $100,000, but less than $350,000, is distributed for any fiscal year pursuant to either or both of paragraphs (1)(B) and (2)(B) of subsection (a), the eligible county, with respect to the balance of any funds not expended pursuant to subparagraph (A) for that fiscal year, shall—

(i)

reserve any portion of the balance for—

(I)

carrying out projects under title II;

(II)

carrying out projects under title III; or

(III)

a combination of the purposes described in subclauses (I) and (II); or

(ii)

return the portion of the balance not reserved under clause (i) to the Treasury of the United States.

(2)

Distribution of funds

(A)

In general

Funds reserved by an eligible county under subparagraph (B)(i) or (C)(i) of paragraph (1) for carrying out projects under title II shall be deposited in a special account in the Treasury of the United States.

(B)

Availability

Amounts deposited under subparagraph (A) shall—

(i)

be available for expenditure by the Secretary concerned, without further appropriation; and

(ii)

remain available until expended in accordance with title II.

(3)

Election

(A)

Notification

(i)

In general

An eligible county shall notify the Secretary concerned of an election by the eligible county under this subsection not later than September 30, 2008 (or as soon thereafter as the Secretary concerned determines is practicable).

(ii)

Failure to elect

Except as provided in subparagraph (B), if the eligible county fails to make an election by the date specified in clause (i), the eligible county shall—

(I)

be considered to have elected to expend 85 percent of the funds in accordance with paragraph (1)(A); and

(II)

return the balance to the Treasury of the United States.

(B)

Counties with minor distributions

In the case of each eligible county to which less than $100,000 is distributed for any fiscal year pursuant to either or both of paragraphs (1)(B) and (2)(B) of subsection (a), the eligible county may elect to expend all the funds in the same manner in which the 25-percent payments or 50-percent payments, as applicable, are required to be expended.

(e)

Time for Payment

The payments required under this section for a fiscal year shall be made as soon as practicable after the end of that fiscal year.

103.

Transition payments to States

(a)

Definitions

In this section:

(1)

Adjusted amount

The term adjusted amount means, with respect to a covered State for fiscal year 2008, 90 percent of—

(A)

the sum of the amounts paid for fiscal year 2006 under section 102(a)(2) (as in effect on September 29, 2006) for the eligible counties in the covered State that have elected under section 102(b) to receive a share of the State payment for fiscal year 2008; and

(B)

the sum of the amounts paid for fiscal year 2006 under section 103(a)(2) (as in effect on September 29, 2006) for the eligible counties in the State of Oregon that have elected under section 102(b) to receive the county payment for fiscal year 2008.

(2)

Covered state

The term covered State means each of the States of California, Louisiana, Oregon, Pennsylvania, South Carolina, South Dakota, Texas, and Washington.

(b)

Transition Payments

For fiscal year 2008, in lieu of the payment amounts that otherwise would have been made under paragraphs (1)(B) and (2)(B) of section 102(a), the Secretary of the Treasury shall pay the adjusted amount to each covered State and the eligible counties within the covered State, as applicable.

(c)

Distribution of Adjusted Amount

Except as provided in subsection (d), it is the intent of Congress that the method of distributing the payments under subsection (b) among the counties in the covered States for fiscal year 2008 be in the same proportion that the payments were distributed to the eligible counties in fiscal year 2006.

(d)

Distribution of Payments in California

The following payments shall be distributed among the eligible counties in the State of California in the same proportion that payments under section 102(a)(2) (as in effect on September 29, 2006) were distributed to the eligible counties for fiscal year 2006:

(1)

Payments to the State of California under subsection (b).

(2)

The shares of the eligible counties of the State payment for California under section 102 for fiscal year 2011.

(e)

Treatment of Payments

For purposes of this Act, any payment made under subsection (b) shall be considered to be a payment made under section 102(a).

II

SPECIAL PROJECTS ON FEDERAL LAND

201.

Definitions

In this title:

(1)

Participating county

The term participating county means an eligible county that elects under section 102(d) to expend a portion of the Federal funds received under section 102 in accordance with this title.

(2)

Project funds

The term project funds means all funds an eligible county elects under section 102(d) to reserve for expenditure in accordance with this title.

(3)

Resource advisory committee

The term resource advisory committee means—

(A)

an advisory committee established by the Secretary concerned under section 205; or

(B)

an advisory committee determined by the Secretary concerned to meet the requirements of section 205.

(4)

Resource management plan

The term resource management plan means—

(A)

a land use plan prepared by the Bureau of Land Management for units of the Federal land described in section 3(7)(B) pursuant to section 202 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1712); or

(B)

a land and resource management plan prepared by the Forest Service for units of the National Forest System pursuant to section 6 of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1604).

202.

General limitation on use of project funds

(a)

Limitation

Project funds shall be expended solely on projects that meet the requirements of this title.

(b)

Authorized Uses

Project funds may be used by the Secretary concerned for the purpose of entering into and implementing cooperative agreements with willing Federal agencies, State and local governments, private and nonprofit entities, and landowners for protection, restoration, and enhancement of fish and wildlife habitat, and other resource objectives consistent with the purposes of this Act on Federal land and on non-Federal land where projects would benefit the resources on Federal land.

203.

Submission of project proposals

(a)

Submission of Project Proposals to Secretary Concerned

(1)

Projects funded using project funds

Not later than September 30 for fiscal year 2008 (or as soon thereafter as the Secretary concerned determines is practicable) each resource advisory committee shall submit to the Secretary concerned a description of any projects that the resource advisory committee proposes the Secretary undertake using any project funds reserved by eligible counties in the area in which the resource advisory committee has geographic jurisdiction.

(2)

Projects funded using other funds

A resource advisory committee may submit to the Secretary concerned a description of any projects that the committee proposes the Secretary undertake using funds from State or local governments, or from the private sector, other than project funds and funds appropriated and otherwise available to do similar work.

(3)

Joint projects

Participating counties or other persons may propose to pool project funds or other funds, described in paragraph (2), and jointly propose a project or group of projects to a resource advisory committee established under section 205.

(b)

Required Description of Projects

In submitting proposed projects to the Secretary concerned under subsection (a), a resource advisory committee shall include in the description of each proposed project the following information:

(1)

The purpose of the project and a description of how the project will meet the purposes of this title.

(2)

The anticipated duration of the project.

(3)

The anticipated cost of the project.

(4)

The proposed source of funding for the project, whether project funds or other funds.

(5)
(A)

Expected outcomes, including how the project will meet or exceed desired ecological conditions, maintenance objectives, or stewardship objectives.

(B)

An estimate of the amount of any timber, forage, and other commodities and other economic activity, including jobs generated, if any, anticipated as part of the project.

(6)

A detailed monitoring plan, including funding needs and sources, that—

(A)

tracks and identifies the positive or negative impacts of the project, implementation, and provides for validation monitoring; and

(B)

includes an assessment of the following:

(i)

Whether or not the project met or exceeded desired ecological conditions; created local employment or training opportunities, including summer youth jobs programs such as the Youth Conservation Corps where appropriate.

(ii)

Whether the project improved the use of, or added value to, any products removed from land consistent with the purposes of this title.

(7)

An assessment that the project is to be in the public interest.

(c)

Authorized Projects

Projects proposed under subsection (a) shall be consistent with section 2.

204.

Evaluation and approval of projects by Secretary concerned

(a)

Conditions for Approval of Proposed Project

The Secretary concerned may make a decision to approve a project submitted by a resource advisory committee under section 203 only if the proposed project satisfies each of the following conditions:

(1)

The project complies with all applicable Federal laws (including regulations).

(2)

The project is consistent with the applicable resource management plan and with any watershed or subsequent plan developed pursuant to the resource management plan and approved by the Secretary concerned.

(3)

The project has been approved by the resource advisory committee in accordance with section 205, including the procedures issued under subsection (e) of that section.

(4)

A project description has been submitted by the resource advisory committee to the Secretary concerned in accordance with section 203.

(5)

The project will improve the maintenance of existing infrastructure, implement stewardship objectives that enhance forest ecosystems, and restore and improve land health and water quality.

(b)

Environmental Reviews

(1)

Request for payment by county

The Secretary concerned may request the resource advisory committee submitting a proposed project to agree to the use of project funds to pay for any environmental review, consultation, or compliance with applicable environmental laws required in connection with the project.

(2)

Conduct of environmental review

If a payment is requested under paragraph (1) and the resource advisory committee agrees to the expenditure of funds for this purpose, the Secretary concerned shall conduct environmental review, consultation, or other compliance responsibilities in accordance with Federal laws (including regulations).

(3)

Effect of refusal to pay

(A)

In general

If a resource advisory committee does not agree to the expenditure of funds under paragraph (1), the project shall be deemed withdrawn from further consideration by the Secretary concerned pursuant to this title.

(B)

Effect of withdrawal

A withdrawal under subparagraph (A) shall be deemed to be a rejection of the project for purposes of section 207(c).

(c)

Decisions of Secretary Concerned

(1)

Rejection of projects

(A)

In general

A decision by the Secretary concerned to reject a proposed project shall be at the sole discretion of the Secretary concerned.

(B)

No administrative appeal or judicial review

Notwithstanding any other provision of law, a decision by the Secretary concerned to reject a proposed project shall not be subject to administrative appeal or judicial review.

(C)

Notice of rejection

Not later than 30 days after the date on which the Secretary concerned makes the rejection decision, the Secretary concerned shall notify in writing the resource advisory committee that submitted the proposed project of the rejection and the reasons for rejection.

(2)

Notice of project approval

The Secretary concerned shall publish in the Federal Register notice of each project approved under subsection (a) if the notice would be required had the project originated with the Secretary.

(d)

Source and Conduct of Project

Once the Secretary concerned accepts a project for review under section 203, the acceptance shall be deemed a Federal action for all purposes.

(e)

Implementation of Approved Projects

(1)

Cooperation

Notwithstanding chapter 63 of title 31, United States Code, using project funds the Secretary concerned may enter into contracts, grants, and cooperative agreements with States and local governments, private and nonprofit entities, and landowners and other persons to assist the Secretary in carrying out an approved project.

(2)

Best value contracting

(A)

In general

For any project involving a contract authorized by paragraph (1) the Secretary concerned may elect a source for performance of the contract on a best value basis.

(B)

Factors

The Secretary concerned shall determine best value based on such factors as—

(i)

the technical demands and complexity of the work to be done;

(ii)
(I)

the ecological objectives of the project; and

(II)

the sensitivity of the resources being treated;

(iii)

the past experience by the contractor with the type of work being done, using the type of equipment proposed for the project, and meeting or exceeding desired ecological conditions; and

(iv)

the commitment of the contractor to hiring highly qualified workers and local residents.

(3)

Merchantable timber contracting pilot program

(A)

Establishment

The Secretary concerned shall establish a pilot program to implement a certain percentage of approved projects involving the sale of merchantable timber using separate contracts for—

(i)

the harvesting or collection of merchantable timber; and

(ii)

the sale of the timber.

(B)

Annual percentages

Under the pilot program, the Secretary concerned shall ensure that, on a nationwide basis, not less than 35 percent of all approved projects involving the sale of merchantable timber are implemented using separate contracts.

(C)

Inclusion in pilot program

The decision whether to use separate contracts to implement a project involving the sale of merchantable timber shall be made by the Secretary concerned after the approval of the project under this title.

(D)

Assistance

(i)

In general

The Secretary concerned may use funds from any appropriated account available to the Secretary for the Federal land to assist in the administration of projects conducted under the pilot program.

(ii)

Maximum amount of assistance

The total amount obligated under this subparagraph may not exceed $1,000,000 for any fiscal year during which the pilot program is in effect.

(E)

Review and report

(i)

Initial report

Not later than September 30, 2010, the Comptroller General shall submit to the Committees on Agriculture, Nutrition, and Forestry and Energy and Natural Resources of the Senate and the Committees on Agriculture and Natural Resources of the House of Representatives a report assessing the pilot program.

(ii)

Annual report

The Secretary concerned shall submit to the Committees on Agriculture, Nutrition, and Forestry and Energy and Natural Resources of the Senate and the Committees on Agriculture and Natural Resources of the House of Representatives an annual report describing the results of the pilot program.

(f)

Requirements for Project Funds

The Secretary shall ensure that at least 50 percent of all project funds be used for projects that are primarily dedicated—

(1)

to road maintenance, decommissioning, or obliteration; or

(2)

to restoration of streams and watersheds.

205.

Resource advisory Committees

(a)

Establishment and Purpose of Resource Advisory Committees

(1)

Establishment

The Secretary concerned shall establish and maintain resource advisory committees to perform the duties in subsection (b), except as provided in paragraph (4).

(2)

Purpose

The purpose of a resource advisory committee shall be—

(A)

to improve collaborative relationships; and

(B)

to provide advice and recommendations to the land management agencies consistent with the purposes of this title.

(3)

Access to resource advisory committees

To ensure that each unit of Federal land has access to a resource advisory committee, and that there is sufficient interest in participation on a committee to ensure that membership can be balanced in terms of the points of view represented and the functions to be performed, the Secretary concerned may, establish resource advisory committees for part of, or 1 or more, units of Federal land.

(4)

Existing advisory committees

(A)

In general

An advisory committee that meets the requirements of this section, a resource advisory committee established before September 29, 2006, or an advisory committee determined by the Secretary concerned before September 29, 2006, to meet the requirements of this section may be deemed by the Secretary concerned to be a resource advisory committee for the purposes of this title.

(B)

Charter

A charter for a committee described in subparagraph (A) that was filed on or before September 29, 2006, shall be considered to be filed for purposes of this Act.

(C)

Bureau of land management advisory committees

The Secretary of the Interior may deem a resource advisory committee meeting the requirements of subpart 1784 of part 1780 of title 43, Code of Federal Regulations, as a resource advisory committee for the purposes of this title.

(b)

Duties

A resource advisory committee shall—

(1)

review projects proposed under this title by participating counties and other persons;

(2)

propose projects and funding to the Secretary concerned under section 203;

(3)

provide early and continuous coordination with appropriate land management agency officials in recommending projects consistent with purposes of this Act under this title;

(4)

provide frequent opportunities for citizens, organizations, tribes, land management agencies, and other interested parties to participate openly and meaningfully, beginning at the early stages of the project development process under this title;

(5)
(A)

monitor projects that have been approved under section 204; and

(B)

advise the designated Federal official on the progress of the monitoring efforts under subparagraph (A); and

(6)

make recommendations to the Secretary concerned for any appropriate changes or adjustments to the projects being monitored by the resource advisory committee.

(c)

Appointment by the Secretary

(1)

Appointment and term

(A)

In general

The Secretary concerned, shall appoint the members of resource advisory committees for a term of 4 years beginning on the date of appointment.

(B)

Reappointment

The Secretary concerned may reappoint members to subsequent 4-year terms.

(2)

Basic requirements

The Secretary concerned shall ensure that each resource advisory committee established meets the requirements of subsection (d).

(3)

Initial appointment

Not later than 180 days after the date of the enactment of this Act, the Secretary concerned shall make initial appointments to the resource advisory committees.

(4)

Vacancies

The Secretary concerned shall make appointments to fill vacancies on any resource advisory committee as soon as practicable after the vacancy has occurred.

(5)

Compensation

Members of the resource advisory committees shall not receive any compensation.

(d)

Composition of Advisory Committee

(1)

Number

Each resource advisory committee shall be comprised of 15 members.

(2)

Community interests represented

Committee members shall be representative of the interests of the following 3 categories:

(A)

5 persons that—

(i)

represent organized labor or non-timber forest product harvester groups;

(ii)

represent developed outdoor recreation, off highway vehicle users, or commercial recreation activities;

(iii)

represent—

(I)

energy and mineral development interests; or

(II)

commercial or recreational fishing interests;

(iv)

represent the commercial timber industry; or

(v)

hold Federal grazing or other land use permits, or represent nonindustrial private forest land owners, within the area for which the committee is organized.

(B)

5 persons that represent—

(i)

nationally recognized environmental organizations;

(ii)

regionally or locally recognized environmental organizations;

(iii)

dispersed recreational activities;

(iv)

archaeological and historical interests; or

(v)

nationally or regionally recognized wild horse and burro interest groups, wildlife or hunting organizations, or watershed associations.

(C)

5 persons that—

(i)

hold State elected office (or a designee);

(ii)

hold county or local elected office;

(iii)

represent American Indian tribes within or adjacent to the area for which the committee is organized;

(iv)

are school officials or teachers; or

(v)

represent the affected public at large.

(3)

Balanced representation

In appointing committee members from the 3 categories in paragraph (2), the Secretary concerned shall provide for balanced and broad representation from within each category.

(4)

Geographic distribution

The members of a resource advisory committee shall reside within the State in which the committee has jurisdiction and, to extent practicable, the Secretary concerned shall ensure local representation in each category in paragraph (2).

(5)

Chairperson

A majority on each resource advisory committee shall select the chairperson of the committee.

(e)

Approval Procedures

(1)

In general

Subject to paragraph (3), each resource advisory committee shall establish procedures for proposing projects to the Secretary concerned under this title.

(2)

Quorum

A quorum must be present to constitute an official meeting of the committee.

(3)

Approval by majority of members

A project may be proposed by a resource advisory committee to the Secretary concerned under section 203(a), if the project has been approved by a majority of members of the committee from each of the 3 categories in subsection (d)(2).

(f)

Other Committee Authorities and Requirements

(1)

Staff assistance

A resource advisory committee may submit to the Secretary concerned a request for periodic staff assistance from Federal employees under the jurisdiction of the Secretary.

(2)

Meetings

All meetings of a resource advisory committee shall be announced at least 1 week in advance in a local newspaper of record and shall be open to the public.

(3)

Records

A resource advisory committee shall maintain records of the meetings of the committee and make the records available for public inspection.

206.

Use of project funds

(a)

Agreement Regarding Schedule and Cost of Project

(1)

Agreement between parties

The Secretary concerned may carry out a project submitted by a resource advisory committee under section 203(a) using project funds or other funds described in section 203(a)(2), if, as soon as practicable after the issuance of a decision document for the project and the exhaustion of all administrative appeals and judicial review of the project decision, the Secretary concerned and the resource advisory committee enter into an agreement addressing, at a minimum, the following:

(A)

The schedule for completing the project.

(B)

The total cost of the project, including the level of agency overhead to be assessed against the project.

(C)

For a multiyear project, the estimated cost of the project for each of the fiscal years in which it will be carried out.

(D)

The remedies for failure of the Secretary concerned to comply with the terms of the agreement consistent with current Federal law.

(2)

Limited use of federal funds

The Secretary concerned may decide, at the sole discretion of the Secretary concerned, to cover the costs of a portion of an approved project using Federal funds appropriated or otherwise available to the Secretary for the same purposes as the project.

(b)

Transfer of Project Funds

(1)

Initial transfer required

As soon as practicable after the agreement is reached under subsection (a) with regard to a project to be funded in whole or in part using project funds, or other funds described in section 203(a)(2), the Secretary concerned shall transfer to the applicable unit of National Forest System land or Bureau of Land Management District an amount of project funds equal to—

(A)

in the case of a project to be completed in a single fiscal year, the total amount specified in the agreement to be paid using project funds, or other funds described in section 203(a)(2); or

(B)

in the case of a multiyear project, the amount specified in the agreement to be paid using project funds, or other funds described in section 203(a)(2) for the first fiscal year.

(2)

Condition on project commencement

The unit of National Forest System land or Bureau of Land Management District concerned, shall not commence a project until the project funds, or other funds described in section 203(a)(2) required to be transferred under paragraph (1) for the project, have been made available by the Secretary concerned.

(3)

Subsequent transfers for multiyear projects

(A)

In general

For the second and subsequent fiscal years of a multiyear project to be funded in whole or in part using project funds, the unit of National Forest System land or Bureau of Land Management District concerned shall use the amount of project funds required to continue the project in that fiscal year according to the agreement entered into under subsection (a).

(B)

Suspension of work

The Secretary concerned shall suspend work on the project if the project funds required by the agreement in the second and subsequent fiscal years are not available.

207.

Availability of project funds

(a)

Submission of Proposed Projects To Obligate Funds

By September 30, 2008 (or as soon thereafter as the Secretary concerned determines is practicable) a resource advisory committee shall submit to the Secretary concerned pursuant to section 203(a)(1) a sufficient number of project proposals that, if approved, would result in the obligation of at least the full amount of the project funds reserved by the participating county in the preceding fiscal year.

(b)

Use or Transfer of Unobligated Funds

Subject to section 208, if a resource advisory committee fails to comply with subsection (a) for a fiscal year, any project funds reserved by the participating county in the preceding fiscal year and remaining unobligated shall be available for use as part of the project submissions in the next fiscal year.

(c)

Effect of Rejection of Projects

Subject to section 208, any project funds reserved by a participating county in the preceding fiscal year that are unobligated at the end of a fiscal year because the Secretary concerned has rejected one or more proposed projects shall be available for use as part of the project submissions in the next fiscal year.

(d)

Effect of Court Orders

(1)

In general

If an approved project under this Act is enjoined or prohibited by a Federal court, the Secretary concerned shall return the unobligated project funds related to the project to the participating county or counties that reserved the funds.

(2)

Expenditure of funds

The returned funds shall be available for the county to expend in the same manner as the funds reserved by the county under subparagraph (B) or (C)(i) of section 102(d)(1).

208.

Termination of authority

(a)

In General

The authority to initiate projects under this title shall terminate on September 30, 2011.

(b)

Deposits in Treasury

Any project funds not obligated by September 30, 2012, shall be deposited in the Treasury of the United States.

III

COUNTY FUNDS

301.

Definitions

In this title:

(1)

County funds

The term county funds means all funds an eligible county elects under section 102(d) to reserve for expenditure in accordance with this title.

(2)

Participating county

The term participating county means an eligible county that elects under section 102(d) to expend a portion of the Federal funds received under section 102 in accordance with this title.

302.

Use

(a)

Authorized Uses

A participating county, including any applicable agencies of the participating county, shall use county funds, in accordance with this title, only—

(1)

to carry out activities under the Firewise Communities program to provide to homeowners in fire-sensitive ecosystems education on, and assistance with implementing, techniques in home siting, home construction, and home landscaping that can increase the protection of people and property from wildfires;

(2)

to reimburse the participating county for search and rescue and other emergency services, including firefighting, that are—

(A)

performed on Federal land after the date on which the use was approved under subsection (b);

(B)

paid for by the participating county; and

(3)

to develop community wildfire protection plans in coordination with the appropriate Secretary concerned.

(b)

Proposals

A participating county shall use county funds for a use described in subsection (a) only after a 45-day public comment period, at the beginning of which the participating county shall—

(1)

publish in any publications of local record a proposal that describes the proposed use of the county funds; and

(2)

submit the proposal to any resource advisory committee established under section 205 for the participating county.

303.

Certification

(a)

In General

Not later than February 1 of the year after the year in which any county funds were expended by a participating county, the appropriate official of the participating county shall submit to the Secretary concerned a certification that the county funds expended in the applicable year have been used for the uses authorized under section 302(a), including a description of the amounts expended and the uses for which the amounts were expended.

(b)

Review

The Secretary concerned shall review the certifications submitted under subsection (a) as the Secretary concerned determines to be appropriate.

304.

Termination of authority

(a)

In General

The authority to initiate projects under this title terminates on September 30, 2011.

(b)

Availability

Any county funds not obligated by September 30, 2012, shall be returned to the Treasury of the United States.

IV

MISCELLANEOUS PROVISIONS

401.

Regulations

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

402.

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this Act for each of fiscal years 2008 and 2009.

403.

Treatment of funds and revenues

(a)

Relation to Other Appropriations

Funds made available under section 402 and funds made available to a Secretary concerned under section 206 shall be in addition to any other annual appropriations for the Forest Service and the Bureau of Land Management.

(b)

Deposit of Revenues and Other Funds

All revenues generated from projects pursuant to title II, including any interest accrued from the revenues, shall be deposited in the Treasury of the United States.

.

(b)

Forest receipt payments to eligible states and counties

(1)

Act of May 23, 1908

The sixth paragraph under the heading FOREST SERVICE in the Act of May 23, 1908 (16 U.S.C. 500) is amended in the first sentence by striking twenty-five percentum and all that follows through shall be paid and inserting the following: an amount equal to the annual average of 25 percent of all amounts received for the applicable fiscal year and each of the preceding 6 fiscal years from each national forest shall be paid.

(2)

Weeks law

Section 13 of the Act of March 1, 1911 (commonly known as the Weeks Law) (16 U.S.C. 500) is amended in the first sentence by striking twenty-five percentum and all that follows through shall be paid and inserting the following: an amount equal to the annual average of 25 percent of all amounts received for the applicable fiscal year and each of the preceding 6 fiscal years from each national forest shall be paid.

(c)

Payments in lieu of taxes

(1)

In general

Section 6906 of title 31, United States Code, is amended to read as follows:

6906.

Funding

For each of fiscal years 2008 and 2009—

(1)

each county or other eligible unit of local government shall be entitled to payment under this chapter; and

(2)

sums shall be made available to the Secretary of the Interior for obligation or expenditure in accordance with this chapter.

.

(2)

Conforming amendment

The table of sections for chapter 69 of title 31, United States Code, is amended by striking the item relating to section 6906 and inserting the following:

6906. Funding.

.

IV

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

401.

Short title

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

402.

Mental health parity

(a)

Amendments to ERISA

Section 712 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185a) is amended—

(1)

in subsection (a), by adding at the end the following:

(3)

Financial requirements and treatment limitations

(A)

In general

In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that—

(i)

the financial requirements applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and

(ii)

the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.

(B)

Definitions

In this paragraph:

(i)

Financial requirement

The term financial requirement includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual limit subject to paragraphs (1) and (2).

(ii)

Predominant

A financial requirement or treatment limit is considered to be predominant if it is the most common or frequent of such type of limit or requirement.

(iii)

Treatment limitation

The term treatment limitation includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.

(4)

Availability of plan information

The criteria for medical necessity determinations made under the plan with respect to mental health or substance use disorder benefits (or the health insurance coverage offered in connection with the plan with respect to such benefits) shall be made available by the plan administrator (or the health insurance issuer offering such coverage) in accordance with regulations to any current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan (or coverage) of reimbursement or payment for services with respect to mental health or substance use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in accordance with regulations.

(5)

Out-of-network providers

In the case of a plan or coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, if the plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the requirements of this section.

;

(2)

in subsection (b), by amending paragraph (2) to read as follows:

(2)

in the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides mental health or substance use disorder benefits, as affecting the terms and conditions of the plan or coverage relating to such benefits under the plan or coverage, except as provided in subsection (a).

;

(3)

in subsection (c)—

(A)

in paragraph (1)(B)—

(i)

by inserting (or 1 in the case of an employer residing in a State that permits small groups to include a single individual) after at least 2 the first place that such appears; and

(ii)

by striking and who employs at least 2 employees on the first day of the plan year; and

(B)

by striking paragraph (2) and inserting the following:

(2)

Cost Exemption

(A)

In general

With respect to a group health plan (or health insurance coverage offered in connection with such a plan), if the application of this section to such plan (or coverage) results in an increase for the plan year involved of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount that exceeds the applicable percentage described in subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan (or coverage) during the following plan year, and such exemption shall apply to the plan (or coverage) for 1 plan year. An employer may elect to continue to apply mental health and substance use disorder parity pursuant to this section with respect to the group health plan (or coverage) involved regardless of any increase in total costs.

(B)

Applicable percentage

With respect to a plan (or coverage), the applicable percentage described in this subparagraph shall be—

(i)

2 percent in the case of the first plan year in which this section is applied; and

(ii)

1 percent in the case of each subsequent plan year.

(C)

Determinations by actuaries

Determinations as to increases in actual costs under a plan (or coverage) for purposes of this section shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All such determinations shall be in a written report prepared by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by the group health plan or health insurance issuer for a period of 6 years following the notification made under subparagraph (E).

(D)

6-month determinations

If a group health plan (or a health insurance issuer offering coverage in connection with a group health plan) seeks an exemption under this paragraph, determinations under subparagraph (A) shall be made after such plan (or coverage) has complied with this section for the first 6 months of the plan year involved.

(E)

Notification

(i)

In general

A group health plan (or a health insurance issuer offering coverage in connection with a group health plan) that, based upon a certification described under subparagraph (C), qualifies for an exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants and beneficiaries in the plan of such election.

(ii)

Requirement

A notification to the Secretary under clause (i) shall include—

(I)

a description of the number of covered lives under the plan (or coverage) involved at the time of the notification, and as applicable, at the time of any prior election of the cost-exemption under this paragraph by such plan (or coverage);

(II)

for both the plan year upon which a cost exemption is sought and the year prior, a description of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan; and

(III)

for both the plan year upon which a cost exemption is sought and the year prior, the actual total costs of coverage with respect to mental health and substance use disorder benefits under the plan.

(iii)

Confidentiality

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

(I)

a breakdown of States by the size and type of employers submitting such notification; and

(II)

a summary of the data received under clause (ii).

(F)

Audits by appropriate agencies

To determine compliance with this paragraph, the Secretary may audit the books and records of a group health plan or health insurance issuer relating to an exemption, including any actuarial reports prepared pursuant to subparagraph (C), during the 6-year period following the notification of such exemption under subparagraph (E). A State agency receiving a notification under subparagraph (E) may also conduct such an audit with respect to an exemption covered by such notification.

;

(4)

in subsection (e), by striking paragraph (4) and inserting the following:

(4)

Mental health benefits

The term mental health benefits means benefits with respect to services for mental health conditions, as defined under the terms of the plan and in accordance with applicable Federal and State law.

(5)

Substance use disorder benefits

The term substance use disorder benefits means benefits with respect to services for substance use disorders, as defined under the terms of the plan and in accordance with applicable Federal and State law.

;

(5)

by striking subsection (f);

(6)

by inserting after subsection (e) the following:

(f)

Secretary report

The Secretary shall, by January 1, 2012, and every two years thereafter, submit to the appropriate committees of Congress a report on compliance of group health plans (and health insurance coverage offered in connection with such plans) with the requirements of this section. Such report shall include the results of any surveys or audits on compliance of group health plans (and health insurance coverage offered in connection with such plans) with such requirements and an analysis of the reasons for any failures to comply.

(g)

Notice and assistance

The Secretary, in cooperation with the Secretaries of Health and Human Services and Treasury, as appropriate, shall publish and widely disseminate guidance and information for group health plans, participants and beneficiaries, applicable State and local regulatory bodies, and the National Association of Insurance Commissioners concerning the requirements of this section and shall provide assistance concerning such requirements and the continued operation of applicable State law. Such guidance and information shall inform participants and beneficiaries of how they may obtain assistance under this section, including, where appropriate, assistance from State consumer and insurance agencies.

;

(7)

by striking mental health benefits and inserting mental health and substance use disorder benefits each place it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); and

(8)

by striking mental health benefits and inserting mental health or substance use disorder benefits each place it appears (other than in any provision amended by the previous paragraph).

(b)

Amendments to Public Health Service Act

Section 2705 of the Public Health Service Act (42 U.S.C. 300gg–5) is amended—

(1)

in subsection (a), by adding at the end the following:

(3)

Financial requirements and treatment limitations

(A)

In general

In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that—

(i)

the financial requirements applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and

(ii)

the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.

(B)

Definitions

In this paragraph:

(i)

Financial requirement

The term financial requirement includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual limit subject to paragraphs (1) and (2),

(ii)

Predominant

A financial requirement or treatment limit is considered to be predominant if it is the most common or frequent of such type of limit or requirement.

(iii)

Treatment limitation

The term treatment limitation includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.

(4)

Availability of plan information

The criteria for medical necessity determinations made under the plan with respect to mental health or substance use disorder benefits (or the health insurance coverage offered in connection with the plan with respect to such benefits) shall be made available by the plan administrator (or the health insurance issuer offering such coverage) in accordance with regulations to any current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan (or coverage) of reimbursement or payment for services with respect to mental health or substance use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in accordance with regulations.

(5)

Out-of-network providers

In the case of a plan or coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, if the plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the requirements of this section.

;

(2)

in subsection (b), by amending paragraph (2) to read as follows:

(2)

in the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides mental health or substance use disorder benefits, as affecting the terms and conditions of the plan or coverage relating to such benefits under the plan or coverage, except as provided in subsection (a).

;

(3)

in subsection (c)—

(A)

in paragraph (1), by inserting before the period the following: (as defined in section 2791(e)(4), except that for purposes of this paragraph such term shall include employers with 1 employee in the case of an employer residing in a State that permits small groups to include a single individual); and

(B)

by striking paragraph (2) and inserting the following:

(2)

Cost Exemption

(A)

In general

With respect to a group health plan (or health insurance coverage offered in connection with such a plan), if the application of this section to such plan (or coverage) results in an increase for the plan year involved of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount that exceeds the applicable percentage described in subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan (or coverage) during the following plan year, and such exemption shall apply to the plan (or coverage) for 1 plan year. An employer may elect to continue to apply mental health and substance use disorder parity pursuant to this section with respect to the group health plan (or coverage) involved regardless of any increase in total costs.

(B)

Applicable percentage

With respect to a plan (or coverage), the applicable percentage described in this subparagraph shall be—

(i)

2 percent in the case of the first plan year in which this section is applied; and

(ii)

1 percent in the case of each subsequent plan year.

(C)

Determinations by actuaries

Determinations as to increases in actual costs under a plan (or coverage) for purposes of this section shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All such determinations shall be in a written report prepared by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by the group health plan or health insurance issuer for a period of 6 years following the notification made under subparagraph (E).

(D)

6-month determinations

If a group health plan (or a health insurance issuer offering coverage in connection with a group health plan) seeks an exemption under this paragraph, determinations under subparagraph (A) shall be made after such plan (or coverage) has complied with this section for the first 6 months of the plan year involved.

(E)

Notification

(i)

In general

A group health plan (or a health insurance issuer offering coverage in connection with a group health plan) that, based upon a certification described under subparagraph (C), qualifies for an exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants and beneficiaries in the plan of such election.

(ii)

Requirement

A notification to the Secretary under clause (i) shall include—

(I)

a description of the number of covered lives under the plan (or coverage) involved at the time of the notification, and as applicable, at the time of any prior election of the cost-exemption under this paragraph by such plan (or coverage);

(II)

for both the plan year upon which a cost exemption is sought and the year prior, a description of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan; and

(III)

for both the plan year upon which a cost exemption is sought and the year prior, the actual total costs of coverage with respect to mental health and substance use disorder benefits under the plan.

(iii)

Confidentiality

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

(I)

a breakdown of States by the size and type of employers submitting such notification; and

(II)

a summary of the data received under clause (ii).

(F)

Audits by appropriate agencies

To determine compliance with this paragraph, the Secretary may audit the books and records of a group health plan or health insurance issuer relating to an exemption, including any actuarial reports prepared pursuant to subparagraph (C), during the 6-year period following the notification of such exemption under subparagraph (E). A State agency receiving a notification under subparagraph (E) may also conduct such an audit with respect to an exemption covered by such notification.

;

(4)

in subsection (e), by striking paragraph (4) and inserting the following:

(4)

Mental health benefits

The term mental health benefits means benefits with respect to services for mental health conditions, as defined under the terms of the plan and in accordance with applicable Federal and State law.

(5)

Substance use disorder benefits

The term substance use disorder benefits means benefits with respect to services for substance use disorders, as defined under the terms of the plan and in accordance with applicable Federal and State law.

;

(5)

by striking subsection (f);

(6)

by striking mental health benefits and inserting mental health and substance use disorder benefits each place it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); and

(7)

by striking mental health benefits and inserting mental health or substance use disorder benefits each place it appears (other than in any provision amended by the previous paragraph).

(c)

Amendments to Internal Revenue Code

Section 9812 of the Internal Revenue Code of 1986 is amended—

(1)

in subsection (a), by adding at the end the following:

(3)

Financial requirements and treatment limitations

(A)

In general

In the case of a group health plan that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan shall ensure that—

(i)

the financial requirements applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan, and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and

(ii)

the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.

(B)

Definitions

In this paragraph:

(i)

Financial requirement

The term financial requirement includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual limit subject to paragraphs (1) and (2),

(ii)

Predominant

A financial requirement or treatment limit is considered to be predominant if it is the most common or frequent of such type of limit or requirement.

(iii)

Treatment limitation

The term treatment limitation includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.

(4)

Availability of plan information

The criteria for medical necessity determinations made under the plan with respect to mental health or substance use disorder benefits shall be made available by the plan administrator in accordance with regulations to any current or potential participant, beneficiary, or contracting provider upon request. The reason for any denial under the plan of reimbursement or payment for services with respect to mental health or substance use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator to the participant or beneficiary in accordance with regulations.

(5)

Out-of-network providers

In the case of a plan that provides both medical and surgical benefits and mental health or substance use disorder benefits, if the plan provides coverage for medical or surgical benefits provided by out-of-network providers, the plan shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the requirements of this section.

;

(2)

in subsection (b), by amending paragraph (2) to read as follows:

(2)

in the case of a group health plan that provides mental health or substance use disorder benefits, as affecting the terms and conditions of the plan relating to such benefits under the plan, except as provided in subsection (a).

;

(3)

in subsection (c)—

(A)

by amending paragraph (1) to read as follows:

(1)

Small employer exemption

(A)

In general

This section shall not apply to any group health plan for any plan year of a small employer.

(B)

Small employer

For purposes of subparagraph (A), the term small employer means, with respect to a calendar year and a plan year, an employer who employed an average of at least 2 (or 1 in the case of an employer residing in a State that permits small groups to include a single individual) but not more than 50 employees on business days during the preceding calendar year. For purposes of the preceding sentence, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer and rules similar to rules of subparagraphs (B) and (C) of section 4980D(d)(2) shall apply.

; and

(B)

by striking paragraph (2) and inserting the following:

(2)

Cost exemption

(A)

In general

With respect to a group health plan, if the application of this section to such plan results in an increase for the plan year involved of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan (as determined and certified under subparagraph (C)) by an amount that exceeds the applicable percentage described in subparagraph (B) of the actual total plan costs, the provisions of this section shall not apply to such plan during the following plan year, and such exemption shall apply to the plan for 1 plan year. An employer may elect to continue to apply mental health and substance use disorder parity pursuant to this section with respect to the group health plan involved regardless of any increase in total costs.

(B)

Applicable percentage

With respect to a plan, the applicable percentage described in this subparagraph shall be—

(i)

2 percent in the case of the first plan year in which this section is applied; and

(ii)

1 percent in the case of each subsequent plan year.

(C)

Determinations by actuaries

Determinations as to increases in actual costs under a plan for purposes of this section shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All such determinations shall be in a written report prepared by the actuary. The report, and all underlying documentation relied upon by the actuary, shall be maintained by the group health plan for a period of 6 years following the notification made under subparagraph (E).

(D)

6-month determinations

If a group health plan seeks an exemption under this paragraph, determinations under subparagraph (A) shall be made after such plan has complied with this section for the first 6 months of the plan year involved.

(E)

Notification

(i)

In general

A group health plan that, based upon a certification described under subparagraph (C), qualifies for an exemption under this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, the appropriate State agencies, and participants and beneficiaries in the plan of such election.

(ii)

Requirement

A notification to the Secretary under clause (i) shall include—

(I)

a description of the number of covered lives under the plan involved at the time of the notification, and as applicable, at the time of any prior election of the cost-exemption under this paragraph by such plan;

(II)

for both the plan year upon which a cost exemption is sought and the year prior, a description of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan; and

(III)

for both the plan year upon which a cost exemption is sought and the year prior, the actual total costs of coverage with respect to mental health and substance use disorder benefits under the plan.

(iii)

Confidentiality

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

(I)

a breakdown of States by the size and type of employers submitting such notification; and

(II)

a summary of the data received under clause (ii).

(F)

Audits by appropriate agencies

To determine compliance with this paragraph, the Secretary may audit the books and records of a group health plan relating to an exemption, including any actuarial reports prepared pursuant to subparagraph (C), during the 6-year period following the notification of such exemption under subparagraph (E). A State agency receiving a notification under subparagraph (E) may also conduct such an audit with respect to an exemption covered by such notification.

;

(4)

in subsection (e), by striking paragraph (4) and inserting the following:

(4)

Mental health benefits

The term mental health benefits means benefits with respect to services for mental health conditions, as defined under the terms of the plan and in accordance with applicable Federal and State law.

(5)

Substance use disorder benefits

The term substance use disorder benefits means benefits with respect to services for substance use disorders, as defined under the terms of the plan and in accordance with applicable Federal and State law.

;

(5)

by striking subsection (f);

(6)

by striking mental health benefits and inserting mental health and substance use disorder benefits each place it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); and

(7)

by striking mental health benefits and inserting mental health or substance use disorder benefits each place it appears (other than in any provision amended by the previous paragraph).

(d)

Regulations

Not later than 1 year after the date of enactment of this Act, the Secretaries of Labor, Health and Human Services, and the Treasury shall issue regulations to carry out the amendments made by subsections (a), (b), and (c), respectively.

(e)

Effective date

(1)

In general

The amendments made by this section shall apply with respect to group health plans for plan years beginning after the date that is 1 year after the date of enactment of this Act, regardless of whether regulations have been issued to carry out such amendments by such effective date, except that the amendments made by subsections (a)(5), (b)(5), and (c)(5), relating to striking of certain sunset provisions, shall take effect on January 1, 2009.

(2)

Special rule for collective bargaining agreements

In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, the amendments made by this section shall not apply to plan years beginning before the later of—

(A)

the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or

(B)

January 1, 2009.

For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement.
(f)

Assuring coordination

The Secretary of Health and Human Services, the Secretary of Labor, and the Secretary of the Treasury may ensure, through the execution or revision of an interagency memorandum of understanding among such Secretaries, that—

(1)

regulations, rulings, and interpretations issued by such Secretaries relating to the same matter over which two or more such Secretaries have responsibility under this section (and the amendments made by this section) are administered so as to have the same effect at all times; and

(2)

coordination of policies relating to enforcing the same requirements through such Secretaries in order to have a coordinated enforcement strategy that avoids duplication of enforcement efforts and assigns priorities in enforcement.

(g)

Conforming clerical amendments

(1)

ERISA heading

(A)

In general

The heading of section 712 of the Employee Retirement Income Security Act of 1974 is amended to read as follows:

712.

Parity in mental health and substance use disorder benefits

.

(B)

Clerical amendment

The table of contents in section 1 of such Act is amended by striking the item relating to section 712 and inserting the following new item:

Sec. 712. Parity in mental health and substance use disorder benefits.

.

(2)

PHSA heading

The heading of section 2705 of the Public Health Service Act is amended to read as follows:

2705.

Parity in mental health and substance use disorder benefits

.

(3)

IRC heading

(A)

In general

The heading of section 9812 of the Internal Revenue Code of 1986 is amended to read as follows:

9812.

Parity in mental health and substance use disorder benefits

.

(B)

Clerical amendment

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

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

.

(h)

GAO study on coverage and exclusion of mental health and substance use disorder diagnoses

(1)

In general

The Comptroller General of the United States shall conduct a study that analyzes the specific rates, patterns, and trends in coverage and exclusion of specific mental health and substance use disorder diagnoses by health plans and health insurance. The study shall include an analysis of—

(A)

specific coverage rates for all mental health conditions and substance use disorders;

(B)

which diagnoses are most commonly covered or excluded;

(C)

whether implementation of this Act has affected trends in coverage or exclusion of such diagnoses; and

(D)

the impact of covering or excluding specific diagnoses on participants’ and enrollees’ health, their health care coverage, and the costs of delivering health care.

(2)

Reports

Not later than 3 years after the date of the enactment of this Act, and 2 years after the date of submission the first report under this paragraph, the Comptroller General shall submit to Congress a report on the results of the study conducted under paragraph (1).

V

Revenue provisions

501.

0.2 percent FUTA surtax

(a)

In general

Section 3301 (relating to rate of tax) is amended—

(1)

by striking through 2008 in paragraph (1) and inserting through 2009, and

(2)

by striking calendar year 2009 in paragraph (2) and inserting calendar year 2010.

(b)

Effective date

The amendments made by this section shall apply to wages paid after December 31, 2008.

502.

Nonqualified deferred compensation from certain tax indifferent parties

(a)

In general

Subpart B of part II of subchapter E of chapter 1 is amended by inserting after section 457 the following new section:

457A.

Nonqualified deferred compensation from certain tax indifferent parties

(a)

In general

Any compensation of a service provider which is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be includible in gross income when there is no substantial risk of forfeiture of the rights to such compensation.

(b)

Nonqualified entity

For purposes of this section, the term nonqualified entity means—

(1)

any foreign corporation unless substantially all of its income is—

(A)

effectively connected with the conduct of a trade or business in the United States, or

(B)

subject to a comprehensive foreign income tax, and

(2)

any partnership unless substantially all of its income is, directly or indirectly, allocated to—

(A)

United States persons (other than persons exempt from tax under this title),

(B)

foreign persons with respect to whom such income is subject to a comprehensive foreign income tax,

(C)

foreign persons with respect to whom—

(i)

such income is effectively connected with the conduct of a trade or business within the United States, and

(ii)

a withholding tax is paid under section 1446 with respect to such income, or

(D)

organizations which are exempt from tax under this title if such income is unrelated business taxable income (as defined in section 512) with respect to such organization.

(c)

Determinability of amounts of compensation

(1)

In general

If the amount of any compensation is not determinable at the time that such compensation is otherwise includible in gross income under subsection (a)—

(A)

such amount shall be so includible in gross income when determinable, and

(B)

the tax imposed under this chapter for the taxable year in which such compensation is includible in gross income shall be increased by the sum of—

(i)

the amount of interest determined under paragraph (2), and

(ii)

an amount equal to 20 percent of the amount of such compensation.

(2)

Interest

For purposes of paragraph (1)(B)(i), the interest determined under this paragraph for any taxable year is the amount of interest at the underpayment rate under section 6621 plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture.

(d)

Other definitions and special rules

For purposes of this section—

(1)

Substantial risk of forfeiture

(A)

In general

The rights of a person to compensation shall be treated as subject to a substantial risk of forfeiture only if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual.

(B)

Exception for compensation based on gain recognized on an investment asset

(i)

In general

To the extent provided in regulations prescribed by the Secretary, if compensation of a service provider is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition.

(ii)

Investment asset

For purposes of clause (i), the term investment asset means any single asset (other than an investment fund or similar entity)—

(I)

acquired directly by an investment fund or similar entity,

(II)

with respect to which such entity does not (nor does any person related to such entity) participate in the active management of such asset (or if such asset is an interest in an entity, in the active management of the activities of such entity), and

(III)

substantially all of any gain on the disposition of which (other than such deferred compensation) is allocated to investors in such entity.

(iii)

Coordination with special rule

Paragraph (3)(B) shall not apply to any compensation to which clause (i) applies.

(2)

Comprehensive foreign income tax

The term comprehensive foreign income tax means, with respect to any foreign person, the income tax of a foreign country if—

(A)

such person is eligible for the benefits of a comprehensive income tax treaty between such foreign country and the United States, or

(B)

such person demonstrates to the satisfaction of the Secretary that such foreign country has a comprehensive income tax.

(3)

Nonqualified deferred compensation plan

(A)

In general

The term nonqualified deferred compensation plan has the meaning given such term under section 409A(d), except that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.

(B)

Exception

Compensation shall not be treated as deferred for purposes of this section if the service provider receives payment of such compensation not later than 12 months after the end of the taxable year of the service recipient during which the right to the payment of such compensation is no longer subject to a substantial risk of forfeiture.

(4)

Service provider

The term service provider has the meaning given such term in the regulations under section 409A, determined without regard to method of accounting.

(5)

Exception for certain compensation with respect to effectively connected income

In the case of a foreign corporation with income which is taxable under section 882, this section shall not apply to compensation payable by such foreign corporation which, had such compensation been paid in cash on the date that such compensation ceased to be subject to a substantial risk of forfeiture, would have been deductible by such foreign corporation against such income.

(6)

Exception with respect to employees of certain subsidiaries

This section shall not apply to compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity if—

(A)

such compensation is payable to an employee of a domestic subsidiary of such entity, and

(B)

such compensation is reasonably expected to be deductible by such subsidiary under section 404(a)(5) when such compensation is includible in income by such employee.

(7)

Application of rules

Rules similar to the rules of paragraphs (5) and (6) of section 409A(d) shall apply.

(e)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations—

(1)

disregarding a substantial risk of forfeiture in cases where necessary to carry out the purposes of this section, and

(2)

providing appropriate treatment where an individual who was employed by an employer which is not a nonqualified entity is temporarily employed by a nonqualified entity which is related to such employer.

.

(b)

Conforming amendment

Section 26(b)(2) is amended by striking and at the end of subparagraph (V), by striking the period at the end of subparagraph (W) and inserting , and, and by adding at the end the following new subparagraph:

(X)

section 457A(c)(1)(B) (relating to determinability of amounts of compensation).

.

(c)

Clerical amendment

The table of sections of subpart B of part II of subchapter E of chapter 1 is amended by inserting after the item relating to section 457 the following new item:

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

.

(d)

Effective date

(1)

In general

Except as otherwise provided in this subsection, the amendments made by this section shall apply to amounts deferred which are attributable to services performed after December 31, 2008.

(2)

Application to existing deferrals

In the case of any amount deferred to which the amendments made by this section do not apply solely by reason of the fact that the amount is attributable to services performed before January 1, 2009, to the extent such amount is not includible in gross income in a taxable year beginning before 2018, such amounts shall be includible in gross income in the later of—

(A)

the last taxable year beginning before 2018, or

(B)

the taxable year in which there is no substantial risk of forfeiture of the rights to such compensation (determined in the same manner as determined for purposes of section 457A of the Internal Revenue Code of 1986, as added by this section).

(3)

Accelerated payments

No later than 120 days after the date of the enactment of this Act, the Secretary shall issue guidance providing a limited period of time during which a nonqualified deferred compensation arrangement attributable to services performed on or before December 31, 2008, may, without violating the requirements of section 409A(a) of the Internal Revenue Code of 1986, be amended to conform the date of distribution to the date the amounts are required to be included in income.

(4)

Certain back-to-back arrangements

If the taxpayer is also a service recipient and maintains one or more nonqualified deferred compensation arrangements for its service providers under which any amount is attributable to services performed on or before December 31, 2008, the guidance issued under paragraph (4) shall permit such arrangements to be amended to conform the dates of distribution under such arrangement to the date amounts are required to be included in the income of such taxpayer under this subsection.

(5)

Accelerated payment not treated as material modification

Any amendment to a nonqualified deferred compensation arrangement made pursuant to paragraph (4) or (5) shall not be treated as a material modification of the arrangement for purposes of section 409A of the Internal Revenue Code of 1986.

(6)

Certain preexisting arrangements

If, pursuant to a written binding contract entered into on or before December 31, 2007, any portion of compensation payable under such contract for a period is determined as a portion of the amount of gain recognized on the disposition during such period of a specified asset, the amendments made by this section shall not apply to the portion of compensation attributable to such disposition notwithstanding the fact that such portion of compensation may be reduced by realized losses or depreciation in the value of other assets during such period or a prior period or be attributable in part to services performed after December 31, 2008, but only if—

(A)

payment of such portion of compensation is received by the service provider and included in its gross income no later than the earlier of—

(i)

12 months after the end of the taxable year of the service recipient during which the disposition of the specified asset occurs, or

(ii)

the last taxable year of the service provider beginning before January 1, 2018; and

(B)

the specified asset is held by the service recipient on the date of the enactment of this section.

503.

Increase and extension of Oil Spill Liability Trust Fund tax

(a)

Increase in rate

(1)

Increase in rate

Section 4611(c) is amended by adding at the end the following new paragraph:

(3)

Increase in Oil Spill Liability Trust Fund financing rate

For purposes of this subsection, the Oil Spill Liability Trust Fund financing rate is increased (in addition to any other increase under this subsection) by—

(A)

in the case of crude oil received or petroleum products entered before October 1, 2014, 4 cents a barrel, and

(B)

in the case of crude oil received or petroleum products entered after September 30, 2014, 5 cents a barrel.

.

(2)

Effective date

The amendment made by this subsection shall apply on and after the first day of the first calendar quarter beginning more than 60 days after the date of the enactment of this Act.

(b)

Extension

(1)

In general

Section 4611(f) (relating to application of Oil Spill Liability Trust Fund financing rate) is amended by striking paragraphs (2) and (3) and inserting the following new paragraph:

(2)

Termination

The Oil Spill Liability Trust Fund financing rate shall not apply after December 31, 2017.

.

(2)

Conforming amendment

Section 4611(f)(1) is amended by striking paragraphs (2) and (3) and inserting paragraph (2).

(3)

Effective date

The amendments made by this subsection shall take effect on the date of the enactment of this Act.

504.

Delay in application of worldwide allocation of interest

(a)

In general

Paragraphs (5)(D) and (6) of section 864(f) are each amended by striking December 31, 2010 and inserting December 31, 2018.

(b)

Transition

Subsection (f) of section 864 is amended by striking paragraph (7).

505.

Time for payment of corporate estimated taxes

The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 49 percentage points.