S 2345 PCSCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 and to extend the financing for the Airport and Airway Trust Fund, and for other purposes.CommentsClose CommentsPermalink

November 13, 2007

Mr. BAUCUS, from the Committee on Finance, reported the following original bill; which was read twice and placed on the calendarCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 and to extend the financing for the Airport and Airway Trust Fund, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE, ETC.

(a) Short Title- This Act may be cited as the `American Infrastructure Investment and Improvement Act of 2007'.CommentsClose CommentsPermalink





(b) Amendment of 1986 Code- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(c) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title, etc.CommentsClose CommentsPermalink

TITLE I--AIRPORT AND AIRWAY TRUST FUND PROVISIONS AND RELATED TAXES

Sec. 101. Extension of taxes funding Airport and Airway Trust Fund.CommentsClose CommentsPermalink





Sec. 102. Extension of Airport and Airway Trust Fund expenditure authority.CommentsClose CommentsPermalink





Sec. 103. Modification of excise tax on kerosene used in aviation .CommentsClose CommentsPermalink





Sec. 104. Increase in tax on use of international air facilities.CommentsClose CommentsPermalink





Sec. 105. Air Traffic Control System Modernization Account.CommentsClose CommentsPermalink





Sec. 106. Treatment of fractional aircraft ownership programs.CommentsClose CommentsPermalink





Sec. 107. Termination of exemption for small aircraft on nonestablished lines.CommentsClose CommentsPermalink





Sec. 108. Transparency in passenger tax disclosures.CommentsClose CommentsPermalink





Sec. 109. Required funding of new accruals under air carrier pension plans.CommentsClose CommentsPermalink

TITLE II--INCREASED FUNDING FOR HIGHWAY TRUST FUND

Sec. 201. Replenish emergency spending from Highway Trust Fund.CommentsClose CommentsPermalink





Sec. 202. Suspension of transfers from highway trust fund for certain repayments and credit.CommentsClose CommentsPermalink





Sec. 203. Taxation of taxable fuels in foreign trade zones.CommentsClose CommentsPermalink





Sec. 204. Clarification of penalty for sale of fuel failing to meet EPA regulations.CommentsClose CommentsPermalink





Sec. 205. Treatment of qualified alcohol fuel mixtures and qualified biodiesel fuel mixtures as taxable fuels.CommentsClose CommentsPermalink





Sec. 206. Calculation of volume of alcohol for fuel credits.CommentsClose CommentsPermalink





Sec. 207. Bulk transfer exception not to apply to finished gasoline.CommentsClose CommentsPermalink





Sec. 208. Increase and extension of Oil Spill Liability Trust Fund tax.CommentsClose CommentsPermalink





Sec. 209. Application of rules treating inverted corporations as domestic corporations to certain transactions occurring after March 20, 2002.CommentsClose CommentsPermalink





Sec. 210. Denial of deduction for punitive damages.CommentsClose CommentsPermalink





Sec. 211. Fuel technical corrections.CommentsClose CommentsPermalink





Sec. 212. Motor fuel tax enforcement advisory commission.CommentsClose CommentsPermalink





Sec. 213. Highway Trust Fund conforming expenditure amendment.CommentsClose CommentsPermalink

TITLE III--ADDITIONAL INFRASTRUCTURE MODIFICATIONS AND REVENUE PROVISIONS

Sec. 301. Restructuring of New York Liberty Zone tax credits.CommentsClose CommentsPermalink





Sec. 302. Participants in government section 457 plans allowed to treat elective deferrals as Roth contributions.CommentsClose CommentsPermalink





Sec. 303. Increased information return penalties.CommentsClose CommentsPermalink





Sec. 304. Exemption of certain commercial cargo from harbor maintenance tax.CommentsClose CommentsPermalink





Sec. 305. Credit to holders of qualified rail infrastructure bonds.CommentsClose CommentsPermalink





Sec. 306. Repeal of suspension of certain penalties and interest.CommentsClose CommentsPermalink





Sec. 307. Denial of deduction for certain fines, penalties, and other amounts.CommentsClose CommentsPermalink





Sec. 308. Revision of tax rules on expatriation.CommentsClose CommentsPermalink

TITLE I--AIRPORT AND AIRWAY TRUST FUND PROVISIONS AND RELATED TAXES

SEC. 101. EXTENSION OF TAXES FUNDING AIRPORT AND AIRWAY TRUST FUND.

(a) Fuel Taxes- Subparagraph (B) of section 4081(d)(2) is amended by striking `September 30, 2007' and inserting `September 30, 2011'.CommentsClose CommentsPermalink





(b) Ticket Taxes-CommentsClose CommentsPermalink





(1) PERSONS- Clause (ii) of section 4261(j)(1)(A) is amended by striking `September 30, 2007' and inserting `September 30, 2011'.CommentsClose CommentsPermalink





(2) PROPERTY- Clause (ii) of section 4271(d)(1)(A) is amended by striking `September 30, 2007' and inserting `September 30, 2011'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on October 1, 2007.CommentsClose CommentsPermalink

SEC. 102. EXTENSION OF AIRPORT AND AIRWAY TRUST FUND EXPENDITURE AUTHORITY.

(a) In General- Paragraph (1) of section 9502(d) is amended--CommentsClose CommentsPermalink





(1) by striking `October 1, 2007' in the matter preceding subparagraph (A) and inserting `October 1, 2011', andCommentsClose CommentsPermalink





(2) by striking the semicolon at the end of subparagraph (A) and inserting `or the Aviation Investment and Modernization Act of 2007;'.CommentsClose CommentsPermalink





(b) Conforming Amendment- Paragraph (2) of section 9502(f) is amended by striking `October 1, 2007' and inserting `October 1, 2011'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on October 1, 2007.CommentsClose CommentsPermalink

SEC. 103. MODIFICATION OF EXCISE TAX ON KEROSENE USED IN AVIATION .

(a) Rate of Tax on Aviation-Grade Kerosene-CommentsClose CommentsPermalink





(1) IN GENERAL- Subparagraph (A) of section 4081(a)(2) (relating to rates of tax) 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:CommentsClose CommentsPermalink





`(iv) in the case of aviation-grade kerosene, 35.9 cents per gallon.'.CommentsClose CommentsPermalink





(2) FUEL REMOVED DIRECTLY INTO FUEL TANK OF AIRPLANE USED IN NONCOMMERCIAL AVIATION- Subparagraph (C) of section 4081(a)(2) is amended to read as follows:CommentsClose CommentsPermalink





`(C) TAXES IMPOSED ON FUEL USED IN COMMERCIAL AVIATION- In the case of aviation-grade kerosene which is removed from any refinery or terminal directly into the fuel tank of an aircraft for use in commercial aviation by a person registered for such use under section 4101, the rate of tax under subparagraph (A)(iv) shall be 4.3 cents per gallon.'.CommentsClose CommentsPermalink





(3) EXEMPTION FOR AVIATION-GRADE KEROSENE REMOVED INTO AN AIRCRAFT- Subsection (e) of section 4082 is amended--CommentsClose CommentsPermalink





(A) by striking `kerosene' and inserting `aviation-grade kerosene',CommentsClose CommentsPermalink





(B) by striking `section 4081(a)(2)(A)(iii)' and inserting `section 4081(a)(2)(A)(iv)', andCommentsClose CommentsPermalink





(C) by striking `Kerosene' in the heading and inserting `Aviation-Grade Kerosene'.CommentsClose CommentsPermalink





(4) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Clause (iii) of section 4081(a)(2)(A) is amended by inserting `other than aviation-grade kerosene' after `kerosene'.CommentsClose CommentsPermalink





(B) The following provisions are each amended by striking `kerosene' and inserting `aviation-grade kerosene':CommentsClose CommentsPermalink





(i) Section 4081(a)(3)(A)(ii).CommentsClose CommentsPermalink





(ii) Section 4081(a)(3)(A)(iv).CommentsClose CommentsPermalink





(iii) Section 4081(a)(3)(D).CommentsClose CommentsPermalink





(C) Section 4081(a)(3)(D) is amended--CommentsClose CommentsPermalink





(i) by striking `paragraph (2)(C)(i)' in clause (i) and inserting `paragraph (2)(C)', andCommentsClose CommentsPermalink





(ii) by striking `paragraph (2)(C)(ii)' in clause (ii) and inserting `paragraph (2)(A)(iv)'.CommentsClose CommentsPermalink





(D) Section 4081(a)(4) is amended--CommentsClose CommentsPermalink





(i) in the heading by striking `KEROSENE' and inserting `AVIATION-GRADE KEROSENE', andCommentsClose CommentsPermalink





(ii) by striking `paragraph (2)(C)(i)' and inserting `paragraph (2)(C)'.CommentsClose CommentsPermalink





(E) Section 4081(d)(2) is amended by striking `(a)(2)(C)(ii)' and inserting `(a)(2)(A)(iv)'.CommentsClose CommentsPermalink





(b) Retail Tax on Aviation Fuel-CommentsClose CommentsPermalink





(1) EXEMPTION FOR PREVIOUSLY TAXED FUEL- Paragraph (2) of section 4041(c) is amended by inserting `at the rate specified in subsection (a)(2)(A)(iv) thereof' after `section 4081'.CommentsClose CommentsPermalink





(2) RATE OF TAX- Paragraph (3) of section 4041(c) is amended to read as follows:CommentsClose CommentsPermalink





`(3) RATE OF TAX- The rate of tax imposed by this subsection shall be the rate of tax in effect under section 4081(a)(2)(A)(iv) (4.3 cents per gallon with respect to any sale or use for commercial aviation).'.CommentsClose CommentsPermalink





(c) Refunds Relating to Aviation-Grade Kerosene-CommentsClose CommentsPermalink





(1) KEROSENE USED IN COMMERCIAL AVIATION- Clause (ii) of section 6427(l)(4)(A) is amended by striking `specified in section 4041(c) or 4081(a)(2)(A)(iii), as the case may be,' and inserting `so imposed'.CommentsClose CommentsPermalink





(2) KEROSENE USED IN AVIATION- Paragraph (4) of section 6427(l) is amended--CommentsClose CommentsPermalink





(A) by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B), andCommentsClose CommentsPermalink





(B) by amending subparagraph (B), as redesignated by subparagraph (A), to read as follows:CommentsClose CommentsPermalink





`(B) PAYMENTS TO ULTIMATE, REGISTERED VENDOR- With respect to any kerosene used in aviation (other than kerosene to which paragraph (6) applies), if the ultimate purchaser of such kerosene waives (at such time and in such form and manner as the Secretary shall prescribe) the right to payment under paragraph (1) and assigns such right to the ultimate vendor, then the Secretary shall pay (without interest) the amount which would be paid under paragraph (1) to such ultimate vendor, but only if such ultimate vendor--CommentsClose CommentsPermalink





`(i) is registered under section 4101, andCommentsClose CommentsPermalink





`(ii) meets the requirements of subparagraph (A), (B), or (D) of section 6416(a)(1).'.CommentsClose CommentsPermalink





(3) AVIATION-GRADE KEROSENE NOT USED IN AVIATION- Subsection (l) of section 6427 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:CommentsClose CommentsPermalink





`(5) REFUNDS FOR AVIATION-GRADE KEROSENE NOT USED IN AVIATION- If tax has been imposed under section 4081 at the rate specified in section 4081(a)(2)(A)(iv) and the fuel is used other than in an aircraft, the Secretary shall pay (without interest) to the ultimate purchaser of such fuel an amount equal to the amount of tax imposed on such fuel reduced by the amount of tax that would be imposed under section 4041 if no tax under section 4081 had been imposed.'.CommentsClose CommentsPermalink





(4) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Section 4082(d)(2)(B) is amended by striking `6427(l)(5)(B)' and inserting `6427(l)(6)(B)'.CommentsClose CommentsPermalink





(B) Section 6427(i)(4) is amended--CommentsClose CommentsPermalink





(i) by striking `(4)(C)' the first two places it occurs and inserting `(4)(B)', andCommentsClose CommentsPermalink





(ii) by striking `, (l)(4)(C)(ii), and' and inserting `and'.CommentsClose CommentsPermalink





(C) The heading of section 6427(l) is amended by striking `Diesel Fuel and Kerosene' and inserting `Diesel Fuel, Kerosene, and Aviation Fuel'.CommentsClose CommentsPermalink





(D) Section 6427(l)(1) is amended by striking `paragraph (4)(C)(i)' and inserting `paragraph (4)(B)'.CommentsClose CommentsPermalink





(E) Section 6427(l)(4) is amended--CommentsClose CommentsPermalink





(i) by striking `KEROSENE USED IN AVIATION' in the heading and inserting `AVIATION-GRADE KEROSENE USED IN COMMERCIAL AVIATION', andCommentsClose CommentsPermalink





(ii) in subparagraph (A)--CommentsClose CommentsPermalink





(I) by striking `kerosene' and inserting `aviation-grade kerosene',CommentsClose CommentsPermalink





(II) by striking `KEROSENE USED IN COMMERCIAL AVIATION' in the heading and inserting `IN GENERAL'.CommentsClose CommentsPermalink





(d) Transfers to the Airport and Airway Trust Fund-CommentsClose CommentsPermalink





(1) IN GENERAL- Subparagraph (C) of section 9502(b)(1) is amended to read as follows:CommentsClose CommentsPermalink





`(C) section 4081 with respect to aviation gasoline and aviation-grade kerosene, and'.CommentsClose CommentsPermalink





(2) TRANSFERS ON ACCOUNT OF CERTAIN REFUNDS-CommentsClose CommentsPermalink





(A) IN GENERAL- Subsection (d) of section 9502 is amended--CommentsClose CommentsPermalink





(i) in paragraph (2) by striking `(other than subsection (l)(4) thereof)', andCommentsClose CommentsPermalink





(ii) in paragraph (3) by striking `(other than payments made by reason of paragraph (4) of section 6427(l))'.CommentsClose CommentsPermalink





(B) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(i) Section 9503(b)(4) is amended by striking `or' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting a comma, and by inserting after subparagraph (D) the following:CommentsClose CommentsPermalink





`(E) section 4081 to the extent attributable to the rate specified in clause (ii) or (iv) of section 4081(a)(2)(A), orCommentsClose CommentsPermalink





`(F) section 4041(c).'.CommentsClose CommentsPermalink





(ii) Section 9503(c) is amended by striking the last paragraph (relating to transfers from the Trust Fund for certain aviation fuel taxes).CommentsClose CommentsPermalink





(iii) Section 9502(a) is amended--CommentsClose CommentsPermalink





(I) by striking `appropriated, credited, or paid into' and inserting `appropriated or credited to', andCommentsClose CommentsPermalink





(II) by striking `, section 9503(c)(7),'.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall apply to fuels removed, entered, or sold after December 31, 2007.CommentsClose CommentsPermalink





(f) Floor Stocks Tax-CommentsClose CommentsPermalink





(1) IMPOSITION OF TAX- In the case of aviation fuel which is held on January 1, 2008, by any person, there is hereby imposed a floor stocks tax on aviation fuel equal to--CommentsClose CommentsPermalink





(A) the tax which would have been imposed before such date on such fuel had the amendments made by this section been in effect at all times before such date, reduced byCommentsClose CommentsPermalink





(B) the sum of--CommentsClose CommentsPermalink





(i) the tax imposed before such date on such fuel under section 4081 of the Internal Revenue Code of 1986, as in effect on such date, andCommentsClose CommentsPermalink





(ii) in the case of kerosene held exclusively for such person's own use, the amount which such person would (but for this clause) reasonably expect (as of such date) to be paid as a refund under section 6427(l) of such Code with respect to such kerosene.CommentsClose CommentsPermalink





(2) LIABILITY FOR TAX AND METHOD OF PAYMENT-CommentsClose CommentsPermalink





(A) LIABILITY FOR TAX- A person holding aviation fuel on January 1, 2008, shall be liable for such tax.CommentsClose CommentsPermalink





(B) TIME AND METHOD OF PAYMENT- The tax imposed by paragraph (1) shall be paid at such time and in such manner as the Secretary of the Treasury shall prescribe.CommentsClose CommentsPermalink





(3) TRANSFER OF FLOOR STOCK TAX REVENUES TO TRUST FUNDS- For purposes of determining the amount transferred to the Airport and Airway Trust Fund, the tax imposed by this subsection shall be treated as imposed by section 4081(a)(2)(A)(iv) of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(4) DEFINITIONS- For purposes of this subsection--CommentsClose CommentsPermalink





(A) AVIATION FUEL- The term `aviation fuel' means aviation-grade kerosene and aviation gasoline, as such terms are used within the meaning of section 4081 of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(B) HELD BY A PERSON- Aviation fuel shall be considered as held by a person if title thereto has passed to such person (whether or not delivery to the person has been made).CommentsClose CommentsPermalink





(C) SECRETARY- The term `Secretary' means the Secretary of the Treasury or the Secretary's delegate.CommentsClose CommentsPermalink





(5) EXCEPTION FOR EXEMPT USES- The tax imposed by paragraph (1) shall not apply to any aviation fuel held by any person exclusively for any use to the extent a credit or refund of the tax is allowable under the Internal Revenue Code of 1986 for such use.CommentsClose CommentsPermalink





(6) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL-CommentsClose CommentsPermalink





(A) IN GENERAL- No tax shall be imposed by paragraph (1) on any aviation fuel held on January 1, 2008, by any person if the aggregate amount of such aviation fuel held by such person on such date does not exceed 2,000 gallons. The preceding sentence shall apply only if such person submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this subparagraph.CommentsClose CommentsPermalink





(B) EXEMPT FUEL- For purposes of subparagraph (A), there shall not be taken into account any aviation fuel held by any person which is exempt from the tax imposed by paragraph (1) by reason of paragraph (6).CommentsClose CommentsPermalink





(C) CONTROLLED GROUPS- For purposes of this subsection--CommentsClose CommentsPermalink





(i) CORPORATIONS-CommentsClose CommentsPermalink





(I) IN GENERAL- All persons treated as a controlled group shall be treated as 1 person.CommentsClose CommentsPermalink





(II) CONTROLLED GROUP- The term `controlled group' has the meaning given to such term by subsection (a) of section 1563 of the Internal Revenue Code of 1986; except that for such purposes the phrase `more than 50 percent' shall be substituted for the phrase `at least 80 percent' each place it appears in such subsection.CommentsClose CommentsPermalink





(ii) NONINCORPORATED PERSONS UNDER COMMON CONTROL- Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of persons under common control if 1 or more of such persons is not a corporation.CommentsClose CommentsPermalink





(7) OTHER LAWS APPLICABLE- All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4081 of the Internal Revenue Code of 1986 on the aviation fuel involved shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply with respect to the floor stock taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by such section.CommentsClose CommentsPermalink

SEC. 104. INCREASE IN TAX ON USE OF INTERNATIONAL AIR FACILITIES.

(a) In General- Section 4261(c)(1) is amended by striking `$12.00' and inserting `$16.65'.CommentsClose CommentsPermalink





(b) Inflation Adjustment- Section 4261(e)(4)(B) is amended--CommentsClose CommentsPermalink





(1) by striking `and' at the end of clause (i),CommentsClose CommentsPermalink





(2) by striking `amounts contained in subsection (c).' in clause (ii) and inserting `amount contained in subsection (c)(3), and', andCommentsClose CommentsPermalink





(3) by adding at the end the following new clause:CommentsClose CommentsPermalink





`(iii) 2008 in the case of the dollar amount contained in subsection (c)(1).'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on January 1, 2008.CommentsClose CommentsPermalink

SEC. 105. AIR TRAFFIC CONTROL SYSTEM MODERNIZATION ACCOUNT.

(a) In General- Section 9502 (relating to the Airport and Airway Trust Fund) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(g) Establishment of Air Traffic Control System Modernization Account-CommentsClose CommentsPermalink





`(1) CREATION OF ACCOUNT- There is established in the Airport and Airway Trust Fund a separate account to be known as the `Air Traffic Control System Modernization Account' consisting of such amounts as may be transferred or credited to the Air Traffic Control System Modernization Account as provided in this subsection or section 9602(b).CommentsClose CommentsPermalink





`(2) TRANSFERS TO AIR TRAFFIC CONTROL SYSTEM MODERNIZATION ACCOUNT- The Secretary of the Treasury shall annually transfer from the Airport and Airway Trust Fund to the Air Traffic Control System Modernization Account an amount equal to $400,000,000.CommentsClose CommentsPermalink





`(3) EXPENDITURES FROM ACCOUNT- Amounts in the Air Traffic Control System Modernization Account shall be available to the Administrator of the Federal Aviation Administration for expenditures relating the modernization of the air traffic control system (including facility and equipment account expenditures) approved by the Air Traffic Control Modernization Oversight Board.'.CommentsClose CommentsPermalink





(b) Conforming Amendment- Section 9502(d)(1) is amended by striking `Amounts' and inserting `Except as provided in subsection (g), amounts'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 106. TREATMENT OF FRACTIONAL AIRCRAFT OWNERSHIP PROGRAMS.

(a) Departure Tax in Lieu of Persons and Property Tax-CommentsClose CommentsPermalink





(1) DEPARTURE TAX-CommentsClose CommentsPermalink





(A) IN GENERAL- Subchapter C of chapter 33 is amended by redesignating part III as part IV and by inserting after part II the following new part:CommentsClose CommentsPermalink

`PART III--DEPARTURES

`Sec. 4266. Fractional aircraft ownership programs.CommentsClose CommentsPermalink

`SEC. 4266. FRACTIONAL AIRCRAFT OWNERSHIP PROGRAMS.

`(a) In General- There is hereby imposed a tax of $58 on each departure of an aircraft which is part of a fractional ownership aircraft program.CommentsClose CommentsPermalink





`(b) Fractional Ownership Aircraft Program- For purposes of this section--CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `fractional ownership aircraft program' means a program under which--CommentsClose CommentsPermalink





`(A) a single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners,CommentsClose CommentsPermalink





`(B) 2 or more airworthy aircraft are part of the program,CommentsClose CommentsPermalink





`(C) there are 1 or more fractional owners per program aircraft, with at least 1 program aircraft having more than 1 owner,CommentsClose CommentsPermalink





`(D) each fractional owner possesses at least a minimum fractional ownership interest in 1 or more program aircraft,CommentsClose CommentsPermalink





`(E) there exists a dry-lease exchange arrangement among all of the fractional owners, andCommentsClose CommentsPermalink





`(F) there are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program.CommentsClose CommentsPermalink





`(2) MINIMUM FRACTIONAL OWNERSHIP INTEREST- The term `minimum fractional ownership interest' means, with respect to each type of aircraft--CommentsClose CommentsPermalink





`(A) a fractional ownership interest equal to or greater than 1/16 of at least 1 subsonic, fixed wing or powered lift program aircraft, orCommentsClose CommentsPermalink





`(B) a fractional ownership interest equal to or greater than 1/32 of a least 1 rotorcraft program aircraft.CommentsClose CommentsPermalink





`(3) DRY-LEASE EXCHANGE ARRANGEMENT- A `dry-lease aircraft exchange' means an agreement, documented by the written program agreements, under which the program aircraft are available, on an as needed basis without crew, to each fractional owner.CommentsClose CommentsPermalink





`(c) Application of Taxes-CommentsClose CommentsPermalink





`(1) IN GENERAL- The taxes imposed by this section shall apply to departures during the period beginning on January 1, 2008, and ending on September 30, 2011.'.CommentsClose CommentsPermalink





(B) TRANSFER OF REVENUES TO AIRPORT AND AIRWAY TRUST FUND- Section 9502(b)(1)(B) is amended by striking `and 4271' and inserting `4266, and 4271'.CommentsClose CommentsPermalink





(C) CONFORMING AMENDMENTS- The table of parts for subchapter C of chapter 33 is amended by redesignating the item relating to part III as relating to part IV and by inserting after the item relating to part II the following new item:CommentsClose CommentsPermalink





`Part III. Departures.'.CommentsClose CommentsPermalink





(2) EXEMPTION FROM TAX ON TRANSPORTATION OF PERSONS- Section 4261, as amended by section 101(b)(1), is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection:CommentsClose CommentsPermalink





`(j) Exemption for Aircraft in Fractional Ownership Aircraft Programs- No tax shall be imposed by this section on any air transportation by an aircraft which is part of a fractional ownership aircraft program (as defined by section 4266(b)).'.CommentsClose CommentsPermalink





(b) Treatment of Programs Under Fuel Taxes- Subsection (b) of section 4083 is amended by adding at the end the following new sentence: `Such term shall not include the use of any aircraft which is part of a fractional ownership aircraft program (as defined by section 4266(b)).'.CommentsClose CommentsPermalink





(c) Effective Dates-CommentsClose CommentsPermalink





(1) DEPARTURE TAX- The amendments made by subsection (a) shall apply to transportation beginning after December 31, 2007.CommentsClose CommentsPermalink





(2) FUEL TAXES- The amendment made by subsection (b) shall apply to fuel sold or used after December 31, 2007.CommentsClose CommentsPermalink

SEC. 107. TERMINATION OF EXEMPTION FOR SMALL AIRCRAFT ON NONESTABLISHED LINES.

(a) In General- Section 4281 is amended to read as follows:CommentsClose CommentsPermalink

`SEC. 4281. SMALL AIRCRAFT OPERATED SOLELY FOR SIGHTSEEING.

`The taxes imposed by sections 4261 and 4271 shall not apply to transportation by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less at any time during which such aircraft is being operated on a flight the sole purpose of which is sightseeing. For purposes of the preceding sentence, the term `maximum certificated takeoff weight' means the maximum such weight contained in the type certificate or airworthiness certificate.'.CommentsClose CommentsPermalink





(b) Conforming Amendment- The item relating to section 4281 in the table of sections for part III of subchapter C of chapter 33 is amended by striking `on nonestablished lines' and inserting `operated solely for sightseeing'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to transportation beginning after December 31, 2007.CommentsClose CommentsPermalink

SEC. 108. TRANSPARENCY IN PASSENGER TAX DISCLOSURES.

(a) In General- Section 7275 (relating to penalty for offenses relating to certain airline tickets and advertising) is amended--CommentsClose CommentsPermalink





(1) by redesignating subsection (c) as subsection (d),CommentsClose CommentsPermalink





(2) by striking `subsection (a) or (b)' in subsection (d), as so redesignated, and inserting `subsection (a), (b), or (c)', andCommentsClose CommentsPermalink





(3) by inserting after subsection (b) the following new subsection:CommentsClose CommentsPermalink





`(c) Non-Tax Charges-CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of transportation by air for which disclosure on the ticket or advertising for such transportation of the amounts paid for passenger taxes is required by subsection (a)(2) or (b)(1)(B), it shall be unlawful for the disclosure of the amount of such taxes on such ticket or advertising to include any amounts not attributable to the taxes imposed by subsection (a), (b), or (c) of section 4261.CommentsClose CommentsPermalink





`(2) INCLUSION IN TRANSPORTATION COST- Nothing in this subsection shall prohibit the inclusion of amounts not attributable to the taxes imposed by subsection (a), (b), or (c) of section 4261 in the disclosure of the amount paid for transportation as required by subsection (a)(1) or (b)(1)(A), or in a separate disclosure of amounts not attributable to such taxes.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to transportation beginning after December 31, 2007.CommentsClose CommentsPermalink

SEC. 109. REQUIRED FUNDING OF NEW ACCRUALS UNDER AIR CARRIER PENSION PLANS.

(a) In General- Section 402(a) of the Pension Protection Act of 2006, as amended by section 6615(a) of the U. S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110-28), is amended--CommentsClose CommentsPermalink





(1) in paragraph (2)--CommentsClose CommentsPermalink





(A) by striking `to its first taxable year beginning in 2008',CommentsClose CommentsPermalink





(B) by striking `for such taxable year' and inserting `for its first plan year beginning in 2008', andCommentsClose CommentsPermalink





(C) by striking `and by using, in determining the funding target for each of the 10 plan years during such period, an interest rate of 8.25 percent (rather than the segment rates calculated on the basis of the corporate bond yield curve)', andCommentsClose CommentsPermalink





(2) by adding at the end the following new flush matter:CommentsClose CommentsPermalink





`If the plan sponsor of an eligible plan elects the application of paragraph (2), the plan sponsor may also elect, in determining the funding target for each of the 10 plan years during the period described in paragraph (2), to use an interest rate of 8.25 percent (rather than the segment rates calculated on the basis of the corporate bond yield curve). Notwithstanding the preceding sentence, in the case of any plan year of the eligible plan for which such 8.25 percent interest rate is used, the minimum required contribution under section 303 of such Act and section 430 of such Code shall in no event be less than the target normal cost of the plan for such plan year (as determined under section 303(b) of such Act and section 430(b) of such Code). A plan sponsor may revoke the election to use the 8.25 percent interest rate and if the revocation is made, the revocation shall apply to the plan year for which made and all subsequent plan years and the plan sponsor may not elect to use the 8.25 percent interest rate for any subsequent plan year.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect as if included in the provisions of the Pension Protection Act of 2006 to which such amendments relate.CommentsClose CommentsPermalink

TITLE II--INCREASED FUNDING FOR HIGHWAY TRUST FUND

SEC. 201. REPLENISH EMERGENCY SPENDING FROM HIGHWAY TRUST FUND.

(a) In General- Section 9503(b) is amended--CommentsClose CommentsPermalink





(1) by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(7) EMERGENCY SPENDING REPLENISHMENT- There is hereby appropriated to the Highway Trust Fund $3,400,000,000.', andCommentsClose CommentsPermalink





(2) by striking `Amounts Equivalent to Certain Taxes and Penalties' in the heading and inserting `Certain Amounts'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 202. SUSPENSION OF TRANSFERS FROM HIGHWAY TRUST FUND FOR CERTAIN REPAYMENTS AND CREDIT.

Section 9503(c)(2) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





`(D) TEMPORARY SUSPENSION- This paragraph shall not apply to amounts estimated by the Secretary to be attributable to the 6-month period beginning on the date of the enactment of the American Infrastructure Investment and Improvement Act of 2007.'.CommentsClose CommentsPermalink

SEC. 203. TAXATION OF TAXABLE FUELS IN FOREIGN TRADE ZONES.

(a) Tax Imposed on Removals and Entries in Foreign Trade Zones-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (a) of section 4083 (relating to definitions) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(4) UNITED STATES- The term `United States' includes any foreign trade zone or bonded warehouse located in the United States.'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Section 4081(a)(1)(A) (relating to imposition of tax) is amended--CommentsClose CommentsPermalink





(A) in clause (i), by inserting `in the United States' after `refinery'; andCommentsClose CommentsPermalink





(B) in clause (ii), by inserting `in the United States' after `terminal'.CommentsClose CommentsPermalink





(b) Treatment of Taxable Fuel in Foreign Trade Zones- Paragraph (2) of section 81c(a) of title 19, United States Code, is amended by inserting `(other than the provisions relating to taxable fuel (as defined under section 4083(a) of the Internal Revenue Code of 1986))' after `thereunder'.CommentsClose CommentsPermalink





(c) Effective Dates-CommentsClose CommentsPermalink





(1) SUBSECTION (a)- The amendments made by subsection (a) shall apply to removals and entries after December 31, 2007.CommentsClose CommentsPermalink





(2) SUBSECTION (b)- The amendment made by subsection (b) shall take effect on January 1, 2008.CommentsClose CommentsPermalink

SEC. 204. CLARIFICATION OF PENALTY FOR SALE OF FUEL FAILING TO MEET EPA REGULATIONS.

(a) In General- Subsection (a) of section 6720A (relating to penalty with respect to certain adulterated fuels) is amended by striking `applicable EPA regulations (as defined in section 45H(c)(3))' and inserting `the requirements for diesel fuel under section 211 of the Clean Air Act, as determined by the Secretary,'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to any transfer, sale, or holding out for sale or resale occurring after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 205. TREATMENT OF QUALIFIED ALCOHOL FUEL MIXTURES AND QUALIFIED BIODIESEL FUEL MIXTURES AS TAXABLE FUELS.

(a) In General-CommentsClose CommentsPermalink





(1) QUALIFIED ALCOHOL FUEL MIXTURES- Paragraph (2) of section 4083(a) (relating to gasoline) is amended--CommentsClose CommentsPermalink





(A) by striking `and' at the end of subparagraph (A),CommentsClose CommentsPermalink





(B) by redesignating subparagraph (B) as subparagraph (C), andCommentsClose CommentsPermalink





(C) by inserting after subparagraph (A) the following new subparagraph:CommentsClose CommentsPermalink





`(B) includes any qualified mixture (as defined in section 40(b)(1)(B)) which is a mixture of alcohol and special fuel, and'.CommentsClose CommentsPermalink





(2) QUALIFIED BIODIESEL FUEL MIXTURES- Subparagraph (A) of section 4083(a)(3) (relating to diesel fuel) is amended by striking `and' at the end of clause (ii), by redesignating clause (iii) as clause (iv), and inserting after clause (ii) the following new clause:CommentsClose CommentsPermalink





`(iii) any qualified biodiesel mixture (as defined in section 40A(b)(1)(B)), and'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to fuels removed, entered, or sold after December 31, 2007.CommentsClose CommentsPermalink

SEC. 206. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL CREDITS.

(a) In General- Paragraph (4) of section 40(d) (relating to volume of alcohol) is amended by striking `the volume of alcohol' and all that follows and inserting `the volume of alcohol shall not include any denaturant added to such alcohol.'.CommentsClose CommentsPermalink





(b) Conforming Amendment for Excise Tax Credit- Section 6426(b) (relating to alcohol fuel mixture credit) is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:CommentsClose CommentsPermalink





`(5) VOLUME OF ALCOHOL- For purposes of determining under subsection (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall not include any denaturant added to such alcohol.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to fuel sold or used after December 31, 2007.CommentsClose CommentsPermalink

SEC. 207. BULK TRANSFER EXCEPTION NOT TO APPLY TO FINISHED GASOLINE.

(a) In General- Subparagraph (B) of section 4081(a)(1) (relating to tax on removal, entry, or sale) is amended by adding at the end the following new clause:CommentsClose CommentsPermalink





`(iii) EXCEPTION FOR FINISHED GASOLINE- Clause (i) shall not apply to any finished gasoline.'.CommentsClose CommentsPermalink





(b) Exception to Tax on Finished Gasoline for Prior Taxable Removals- Paragraph (1) of section 4081(a) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





`(C) EXEMPTION FOR PREVIOUSLY TAXED FINISHED GASOLINE- The tax imposed by this paragraph shall not apply to the removal of gasoline described in subparagraph (B)(iii) from any terminal if there was a prior taxable removal or entry of such fuel under clause (i), (ii), or (iii) of subparagraph (A). The preceding sentence shall not apply to the volume of any product added to such gasoline at the terminal unless there was a prior taxable removal or entry of such product under clause (i), (ii), or (iii) of subparagraph (A).'.CommentsClose CommentsPermalink





(c) Effective Date- The amendment made by this section shall apply to fuel removed, entered, or sold after December 31, 2007.CommentsClose CommentsPermalink

SEC. 208. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST FUND TAX.

(a) Increase in Rate-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 4611(c)(2)(B) (relating to rates) is amended by striking `5 cents' and inserting `10 cents'.CommentsClose CommentsPermalink





(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.CommentsClose CommentsPermalink





(b) Extension-CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





`(2) TERMINATION- The Oil Spill Liability Trust Fund financing rate shall not apply after December 31, 2017.'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Section 4611(f)(1) is amended by striking `paragraphs (2) and (3)' and inserting `paragraph (2)'.CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by this subsection shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 209. APPLICATION OF RULES TREATING INVERTED CORPORATIONS AS DOMESTIC CORPORATIONS TO CERTAIN TRANSACTIONS OCCURRING AFTER MARCH 20, 2002.

(a) In General- Section 7874(b) (relating to inverted corporations treated as domestic corporations) is amended to read as follows:CommentsClose CommentsPermalink





`(b) Inverted Corporations Treated as Domestic Corporations-CommentsClose CommentsPermalink





`(1) IN GENERAL- Notwithstanding section 7701(a)(4), a foreign corporation shall be treated for purposes of this title as a domestic corporation if such corporation would be a surrogate foreign corporation if subsection (a)(2) were applied by substituting `80 percent' for `60 percent'.CommentsClose CommentsPermalink





`(2) SPECIAL RULE FOR CERTAIN TRANSACTIONS OCCURRING AFTER MARCH 20, 2002-CommentsClose CommentsPermalink





`(A) IN GENERAL- If--CommentsClose CommentsPermalink





`(i) paragraph (1) does not apply to a foreign corporation, butCommentsClose CommentsPermalink





`(ii) paragraph (1) would apply to such corporation if, in addition to the substitution under paragraph (1), subsection (a)(2) were applied by substituting `March 20, 2002' for `March 4, 2003' each place it appears,CommentsClose CommentsPermalink





then paragraph (1) shall apply to such corporation but only with respect to taxable years of such corporation beginning after the date of the enactment of the American Infrastructure Investment and Improvement Act of 2007.CommentsClose CommentsPermalink





`(B) SPECIAL RULES- Subject to such rules as the Secretary may prescribe, in the case of a corporation to which paragraph (1) applies by reason of this paragraph--CommentsClose CommentsPermalink





`(i) the corporation shall be treated, as of the close of its first taxable year ending after the date of the enactment of the American Infrastructure Investment and Improvement Act of 2007, as having transferred all of its assets, liabilities, and earnings and profits to a domestic corporation in a transaction with respect to which no tax is imposed under this title,CommentsClose CommentsPermalink





`(ii) the bases of the assets transferred in the transaction to the domestic corporation shall be the same as the bases of the assets in the hands of the foreign corporation, subject to any adjustments under this title for built-in losses,CommentsClose CommentsPermalink





`(iii) the basis of the stock of any shareholder in the domestic corporation shall be the same as the basis of the stock of the shareholder in the foreign corporation for which it is treated as exchanged, andCommentsClose CommentsPermalink





`(iv) the transfer of any earnings and profits by reason of clause (i) shall be disregarded in determining any deemed dividend or foreign tax creditable to the domestic corporation with respect to such transfer.CommentsClose CommentsPermalink





`(C) REGULATIONS- The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this paragraph, including regulations to prevent the avoidance of the purposes of this paragraph.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 210. DENIAL OF DEDUCTION FOR PUNITIVE DAMAGES.

(a) Disallowance of Deduction-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 162(g) (relating to treble damage payments under the antitrust laws) is amended--CommentsClose CommentsPermalink





(A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively,CommentsClose CommentsPermalink





(B) by striking `If' and inserting:CommentsClose CommentsPermalink





`(1) TREBLE DAMAGES- If', andCommentsClose CommentsPermalink





(C) by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(2) PUNITIVE DAMAGES- No deduction shall be allowed under this chapter for any amount paid or incurred for punitive damages in connection with any judgment in, or settlement of, any action. This paragraph shall not apply to punitive damages described in section 104(c).'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- The heading for section 162(g) is amended by inserting `Or Punitive Damages' after `Laws'.CommentsClose CommentsPermalink





(b) Inclusion in Income of Punitive Damages Paid by Insurer or Otherwise-CommentsClose CommentsPermalink





(1) IN GENERAL- Part II of subchapter B of chapter 1 (relating to items specifically included in gross income) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

`SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR OTHERWISE.

`Gross income shall include any amount paid to or on behalf of a taxpayer as insurance or otherwise by reason of the taxpayer's liability (or agreement) to pay punitive damages.'.CommentsClose CommentsPermalink





(2) REPORTING REQUIREMENTS- Section 6041 (relating to information at source) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(h) Section To Apply to Punitive Damages Compensation- This section shall apply to payments by a person to or on behalf of another person as insurance or otherwise by reason of the other person's liability (or agreement) to pay punitive damages.'.CommentsClose CommentsPermalink





(3) CONFORMING AMENDMENT- The table of sections for part II of subchapter B of chapter 1 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





`Sec. 91. Punitive damages compensated by insurance or otherwise.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to damages paid or incurred on or after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 211. FUEL TECHNICAL CORRECTIONS.

(a) Amendments Related to Section 11113 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users-CommentsClose CommentsPermalink





(1) Paragraph (3) of section 6427(i) is amended--CommentsClose CommentsPermalink





(A) by inserting `or under subsection (e)(2) by any person with respect to an alternative fuel (as defined in section 6426(d)(2))' after `section 6426' in subparagraph (A),CommentsClose CommentsPermalink





(B) by inserting `or (e)(2)' after `subsection (e)(1)' in subparagraphs (A)(i) and (B), andCommentsClose CommentsPermalink





(C) by inserting `AND ALTERNATIVE FUEL CREDIT' after `MIXTURE CREDIT' in the heading thereof.CommentsClose CommentsPermalink





(2)(A) Subparagraph (F) of section 6426(d)(2) is amended by striking `hydrocarbons' and inserting `fuel'.CommentsClose CommentsPermalink





(B) Section 6426 is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(h) Denial of Double Benefit- No credit shall be determined under subsection (d) or (e) with respect to any fuel which is described in subsection (b) or (c) or section 40 or 40A.'.CommentsClose CommentsPermalink





(3) The amendments made by this subsection shall take effect as if included in section 11113 of the SAFETEA-LU.CommentsClose CommentsPermalink





(b) Amendments Related to the Energy Policy Act of 2005-CommentsClose CommentsPermalink





(1) AMENDMENT RELATED TO SECTION 1342 OF THE ACT-CommentsClose CommentsPermalink





(A) So much of subsection (b) of section 30C as precedes paragraph (1) thereof is amended to read as follows:CommentsClose CommentsPermalink





`(b) Limitation- The credit allowed under subsection (a) with respect to all alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year at a location shall not exceed--'.CommentsClose CommentsPermalink





(B) Subsection (c) of section 30C is amended to read as follows:CommentsClose CommentsPermalink





`(c) Qualified Alternative Fuel Vehicle Refueling Property- For purposes of this section, the term `qualified alternative fuel vehicle refueling property' has the same meaning as the term `qualified clean-fuel vehicle refueling property' would have under section 179A if--CommentsClose CommentsPermalink





`(1) paragraph (1) of section 179A(d) did not apply to property installed on property which is used as the principal residence (within the meaning of section 121) of the taxpayer, andCommentsClose CommentsPermalink





`(2) only the following were treated as clean burning fuels for purposes of section 179A(d):CommentsClose CommentsPermalink





`(A) Any fuel at least 85 percent of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen.CommentsClose CommentsPermalink





`(B) Any mixture--CommentsClose CommentsPermalink





`(i) which consists of two or more of the following: biodiesel (as so defined), diesel fuel (as defined in section 4083(a)(3)), or kerosene, andCommentsClose CommentsPermalink





`(ii) at least 20 percent of the volume of which consists of biodiesel (as so defined) determined without regard to any kerosene in such mixture.'.CommentsClose CommentsPermalink





(2) AMENDMENTS RELATED TO SECTION 1362 OF THE ACT-CommentsClose CommentsPermalink





(A)(i) Paragraph (1) of section 4041(d) is amended by adding at the end the following new sentence: `No tax shall be imposed under the preceding sentence on the sale or use of any liquid if tax was imposed with respect to such liquid under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.'.CommentsClose CommentsPermalink





(ii) Paragraph (3) of section 4042(b) is amended to read as follows:CommentsClose CommentsPermalink





`(3) EXCEPTION FOR FUEL ON WHICH LEAKING UNDERGROUND STORAGE TANK TRUST FUND FINANCING RATE SEPARATELY IMPOSED- The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply to the use of any fuel if tax was imposed with respect to such fuel under section 4041(d) or 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.'.CommentsClose CommentsPermalink





(iii) Notwithstanding section 6430 of the Internal Revenue Code of 1986, a refund, credit, or payment may be made under subchapter B of chapter 65 of such Code for taxes imposed with respect to any liquid after September 30, 2005, and before the date of the enactment of this Act under section 4041(d)(1) or 4042 of such Code at the Leaking Underground Storage Tank Trust Fund financing rate to the extent that tax was imposed with respect to such liquid under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.CommentsClose CommentsPermalink





(B)(i) Paragraph (5) of section 4041(d) is amended--CommentsClose CommentsPermalink





(I) by striking `(other than with respect to any sale for export under paragraph (3) thereof)', andCommentsClose CommentsPermalink





(II) by adding at the end the following new sentence: `The preceding sentence shall not apply with respect to subsection (g)(3) and so much of subsection (g)(1) as relates to vessels (within the meaning of section 4221(d)(3)) employed in foreign trade or trade between the United States and any of its possessions.'CommentsClose CommentsPermalink





(ii) Section 4082 is amended--CommentsClose CommentsPermalink





(I) by striking `(other than such tax at the Leaking Underground Storage Tank Trust Fund financing rate imposed in all cases other than for export)' in subsection (a), andCommentsClose CommentsPermalink





(II) by redesignating subsections (f) and (g) as subsections (g) and (h) and by inserting after subsection (e) the following new subsection:CommentsClose CommentsPermalink





`(f) Exception for Leaking Underground Storage Tank Trust Fund Financing Rate-CommentsClose CommentsPermalink





`(1) IN GENERAL- Subsection (a) shall not apply to the tax imposed under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.CommentsClose CommentsPermalink





`(2) EXCEPTION FOR EXPORT, ETC- Paragraph (1) shall not apply with respect to any fuel if the Secretary determines that such fuel is destined for export or for use by the purchaser as supplies for vessels (within the meaning of section 4221(d)(3)) employed in foreign trade or trade between the United States and any of its possessions.'.CommentsClose CommentsPermalink





(iii) Subsection (e) of section 4082, as amended by this Act, is amended--CommentsClose CommentsPermalink





(I) by striking `an aircraft, the rate of tax under section 4081(a)(2)(A)(iv) shall be zero.' and inserting `an aircraft--CommentsClose CommentsPermalink





`(1) the rate of tax under section 4081(a)(2)(A)(iv) shall be zero, andCommentsClose CommentsPermalink





`(2) if such aircraft is employed in foreign trade or trade between the United States and any of its possessions, the increase in such rate under section 4081(a)(2)(B) shall be zero.'; andCommentsClose CommentsPermalink





(II) by moving the last sentence flush with the margin of such subsection (following the paragraph (2) added by clause (i)).CommentsClose CommentsPermalink





(iv) Section 6430 is amended to read as follows:CommentsClose CommentsPermalink

`SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND STORAGE TANK TRUST FUND FINANCING RATE.

`No refunds, credits, or payments shall be made under this subchapter for any tax imposed at the Leaking Underground Storage Tank Trust Fund financing rate, except in the case of fuels--CommentsClose CommentsPermalink





`(1) which are exempt from tax under section 4081(a) by reason of section 4082(f)(2),CommentsClose CommentsPermalink





`(2) which are exempt from tax under section 4041(d) by reason of the last sentence of paragraph (5) thereof, orCommentsClose CommentsPermalink





`(3) with respect to which the rate increase under section 4081(a)(2)(B) is zero by reason of section 4082(e)(2).'.CommentsClose CommentsPermalink





(C) Paragraph (5) of section 4041(d) is amended by inserting `(b)(1)(A),' after `subsections'.CommentsClose CommentsPermalink





(3) EFFECTIVE DATE-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as otherwise provided in this paragraph, the amendments made by this subsection shall take effect as if included in the provisions of the Energy Policy Act of 2005 to which they relate.CommentsClose CommentsPermalink





(B) NONAPPLICATION OF EXEMPTION FOR OFF-HIGHWAY BUSINESS USE- The amendment made by paragraph (2)(C) shall apply to fuel sold for use or used after the date of the enactment of this Act.CommentsClose CommentsPermalink





(C) AMENDMENT MADE BY THE SAFETEA-LU- The amendment made by paragraph (2)(B)(iii)(II) shall take effect as if included in section 11161 of the SAFETEA-LU.CommentsClose CommentsPermalink





(c) Amendments Related to Section 339 of the American Jobs Creation Act of 2004-CommentsClose CommentsPermalink





(1)(A) Section 45H is amended by striking subsection (d) and by redesignating subsections (e), (f), and (g) as subsections (d), (e), and (f), respectively.CommentsClose CommentsPermalink





(B) Subsection (d) of section 280C is amended to read as follows:CommentsClose CommentsPermalink





`(d) Credit for Low Sulfur Diesel Fuel Production- The deductions otherwise allowed under this chapter for the taxable year shall be reduced by the amount of the credit determined for the taxable year under section 45H(a).'.CommentsClose CommentsPermalink





(C) Subsection (a) of section 1016 is amended by striking paragraph (31) and by redesignating paragraphs (32) through (37) as paragraphs (31) through (36), respectively.CommentsClose CommentsPermalink





(2)(A) Section 45H, as amended by paragraph (1), is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(g) Election to Not Take Credit- No credit shall be determined under subsection (a) for the taxable year if the taxpayer elects not to have subsection (a) apply to such taxable year.'.CommentsClose CommentsPermalink





(B) Subsection (m) of section 6501 is amended by inserting `45H(g),' after `45C(d)(4),'.CommentsClose CommentsPermalink





(3)(A) Subsections (b)(1)(A), (c)(2), (e)(1), and (e)(2) of section 45H (as amended by paragraph (1)) and section 179B(a) are each amended by striking `qualified capital costs' and inserting `qualified costs'.CommentsClose CommentsPermalink





(B) The heading of paragraph (2) of section 45H(c) is amended by striking `CAPITAL'.CommentsClose CommentsPermalink





(C) Subsection (a) of section 179B is amended by inserting `and which are properly chargeable to capital account' before the period at the end.CommentsClose CommentsPermalink





(4) The amendments made by this subsection shall take effect as if included in section 339 of the American Jobs Creation Act of 2004.CommentsClose CommentsPermalink

SEC. 212. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.

(a) In General- Section 11141 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users is amended to read as follows:CommentsClose CommentsPermalink

`SEC. 11141. MOTOR FUEL TAX ENFORCEMENT ADVISORY COMMISSION.

`(a) Establishment- There is established a Motor Fuel Tax Enforcement Advisory Commission (in this section referred to as the `Commission').CommentsClose CommentsPermalink





`(b) Membership-CommentsClose CommentsPermalink





`(1) APPOINTMENT- The Commission shall be composed of 14 members, of which--CommentsClose CommentsPermalink





`(A) 1 shall be appointed by the Administrator of the Federal Highway Administration as a representative of the Federal Highway Administration,CommentsClose CommentsPermalink





`(B) 1 shall be appointed by the Inspector General for the Department of Transportation as a representative the Office of Inspector General for the Department of Transportation,CommentsClose CommentsPermalink





`(C) 1 shall be appointed by the Secretary of Transportation as a representative of the Department of Transportation,CommentsClose CommentsPermalink





`(D) 1 shall be appointed by the Secretary of Homeland Security to be a representative of the Department of Homeland Security,CommentsClose CommentsPermalink





`(E) 1 shall be appointed by the Secretary of Defense to be a representative of the Department of Defense,CommentsClose CommentsPermalink





`(F) 1 shall be appointed by the Attorney General to be a representative of the Department of Justice,CommentsClose CommentsPermalink





`(G) 2 shall be appointed by the Chairman of the Committee on Finance of the Senate,CommentsClose CommentsPermalink





`(H) 2 shall be appointed by the Ranking Member of the Committee on Finance of the Senate,CommentsClose CommentsPermalink





`(I) 2 shall be appointed by Chairman of the Committee on Ways and Means of the House of Representatives, andCommentsClose CommentsPermalink





`(J) 2 shall be appointed by Ranking Member of the Committee on Ways and Means of the House of Representatives.CommentsClose CommentsPermalink





`(2) QUALIFICATION FOR CERTAIN MEMBERS- Of the members appointed under subparagraphs (G), (H), (I) and (J)--CommentsClose CommentsPermalink





`(A) at least 1 shall be representative from the Federation of State Tax Administrators,CommentsClose CommentsPermalink





`(B) at least 1shall be a representative from any State department of transportation,CommentsClose CommentsPermalink





`(C) at least 1 shall be a representative from industries relating to fuel distribution, andCommentsClose CommentsPermalink





`(D) at least 1 shall be a representative from industries relating to fuel distribution (such a refiners, distributors, pipeline operators, and terminal operators).CommentsClose CommentsPermalink





`(3) TERMS- Members shall be appointed for the life of the Commission.CommentsClose CommentsPermalink





`(4) VACANCIES- A vacancy in the Commission shall be filled in the manner in which the original appointment was made.CommentsClose CommentsPermalink





`(5) TRAVEL EXPENSES- Members of the Commission shall serve without pay but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code.CommentsClose CommentsPermalink





`(6) CHAIRMAN- The Chairman of the Commission shall be elected by the members.CommentsClose CommentsPermalink





`(c) Duties-CommentsClose CommentsPermalink





`(1) IN GENERAL- The Commission shall--CommentsClose CommentsPermalink





`(A) review motor fuel revenue collections, historical and current;CommentsClose CommentsPermalink





`(B) review the progress of investigations;CommentsClose CommentsPermalink





`(C) develop and review legislative proposals with respect to motor fuel taxes;CommentsClose CommentsPermalink





`(D) monitor the progress of administrative regulation projects relating to motor fuel taxes;CommentsClose CommentsPermalink





`(E) evaluate and make recommendations to the President and Congress regarding--CommentsClose CommentsPermalink





`(i) the effectiveness of existing Federal enforcement programs regarding motor fuel taxes,CommentsClose CommentsPermalink





`(ii) enforcement personnel allocation, andCommentsClose CommentsPermalink





`(iii) proposals for regulatory projects, legislation, and funding.CommentsClose CommentsPermalink





`(2) REPORT- Not later than September 30, 2009, the Commission shall submit to Congress a final report that contains a detailed statement on the findings and conclusions of the Commission, together with recommendations for such legislation and administrative action as the Commission considers appropriate or necessary.CommentsClose CommentsPermalink





`(d) Powers-CommentsClose CommentsPermalink





`(1) HEARINGS- The Commission may hold such hearings for the purpose of carrying out this Act, sit and act at such times and places, take such testimony, and receive such evidence as the Commission considers advisable to carry out this Act. The Commission may administer oaths and affirmations to witnesses appearing before the Commission.CommentsClose CommentsPermalink





`(2) OBTAINING DATA- The Commission may secure directly from any department or agency of the United States, information (other than information required by any law to be kept confidential by such department or agency) necessary for the Commission to carry out its duties under this section. Upon request of the Commission, the head of that department or agency shall furnish such nonconfidential information to the Commission. The Commission shall also gather evidence through such means as it may determine appropriate, including through holding hearings and soliciting comments by means of Federal Register notices.CommentsClose CommentsPermalink





`(3) POSTAL SERVICES- The Commission may use the United States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government.CommentsClose CommentsPermalink





`(4) GIFTS- The Commission may accept, hold, administer, and utilize gifts, donations, and requests of property, both real and personal, for the purposes of aiding or facilitating the work of the Commission. Gifts and bequests of money, and the proceeds from the sale of any other property received as gifts or bequests, shall be deposited in the Treasury in a separate fund and shall be disbursed upon order of the Commission. For purposes of Federal income, estate, and gift taxation, property accepted under this section shall be considered as a gift or bequest to or for the use of the United States.CommentsClose CommentsPermalink





`(e) Support Services-CommentsClose CommentsPermalink





`(1) ADMINISTRATIVE SUPPORT SERVICES- Upon the request of the Commission, the Secretary of Transportation shall provide to the Commission administrative support services necessary to enable the Commission to carry out its duties under this Act.CommentsClose CommentsPermalink





`(2) DETAIL OF GOVERNMENT EMPLOYEES- Any Federal Government employee may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.CommentsClose CommentsPermalink





`(3) VOLUNTARY SERVICES-CommentsClose CommentsPermalink





`(A) IN GENERAL- Notwithstanding the provisions of section 1342 of title 31, United States Code, the Commission is authorized to accept and utilize the services of volunteers serving without compensation. The Commission may reimburse such volunteers for local travel and office supplies, and for other travel expenses, including per diem in lieu of subsistence as authorized by section 5703, United States Code.CommentsClose CommentsPermalink





`(B) TREATMENT OF VOLUNTEERS- A person providing volunteer services to the Commission shall be considered an employee of the Federal Government in the performance of those services for the purposes of the following provisions of law:CommentsClose CommentsPermalink





`(i) chapter 81 of title 5, United States Code, relating to compensation for work-related injuries;CommentsClose CommentsPermalink





`(ii) chapter 171 of title 28, United States Code, relating to tort claims; andCommentsClose CommentsPermalink





`(iii) chapter 11 of title 18, United States Code, relating to conflicts of interest.CommentsClose CommentsPermalink





`(4) CONSULTATION- Upon request of the Commission, representatives of the Department of the Treasury and the Internal Revenue Service shall be available for consultation to assist the Commission in carrying out its duties under this section.CommentsClose CommentsPermalink





`(5) COOPERATION- The staff of the Department of Transportation, the Department of Homeland Security, the Department of Justice, and the Department of Defense shall cooperate with the Commission as necessary.CommentsClose CommentsPermalink





`(f) Inapplicability of Federal Advisory Committee Act- The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Commission.CommentsClose CommentsPermalink





`(g) Termination-CommentsClose CommentsPermalink





`(1) IN GENERAL- The Commission shall terminate on the date that is 90 days after the date on which the Commission submits the report required under subsection (c)(2).CommentsClose CommentsPermalink





`(2) RECORDS- Not later than the date on which the Commission terminates, the Commission shall transmit all records of the Commission to the National Archives.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 213. HIGHWAY TRUST FUND CONFORMING EXPENDITURE AMENDMENT.

(a) In General- Subsections (c)(1) and (e)(3) of section 9503 are each amended by inserting `, as amended by An Act to authorize additional funds for emergency repairs and reconstruction of the Interstate I-35 bridge located in Minneapolis, Minnesota, that collapsed on August 1, 2007, to waive the $100,000,000 limitation on emergency relief funds for those emergency repairs and reconstruction, and for other purposes,' after `Users'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect as if included in the enactment of An Act to authorize additional funds for emergency repairs and reconstruction of the Interstate I-35 bridge located in Minneapolis, Minnesota, that collapsed on August 1, 2007, to waive the $100,000,000 limitation on emergency relief funds for those emergency repairs and reconstruction, and for other purposes.CommentsClose CommentsPermalink

TITLE III--ADDITIONAL INFRASTRUCTURE MODIFICATIONS AND REVENUE PROVISIONS

SEC. 301. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

(a) In General- Part I of subchapter Y of chapter 1 is amended by redesignating section 1400L as 1400K and by adding at the end the following new section:CommentsClose CommentsPermalink

`SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

`(a) In General- In the case of a New York Liberty Zone governmental unit, there shall be allowed as a credit against any taxes imposed for any payroll period by section 3402 for which such governmental unit is liable under section 3403 an amount equal to so much of the portion of the qualifying project expenditure amount allocated under subsection (b)(3) to such governmental unit for the calendar year as is allocated by such governmental unit to such period under subsection (b)(4).CommentsClose CommentsPermalink





`(b) Qualifying Project Expenditure Amount- For purposes of this section--CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `qualifying project expenditure amount' means, with respect to any calendar year, the sum of--CommentsClose CommentsPermalink





`(A) the total expenditures paid or incurred during such calendar year by all New York Liberty Zone governmental units and the Port Authority of New York and New Jersey for any portion of qualifying projects located wholly within the City of New York, New York, andCommentsClose CommentsPermalink





`(B) any such expenditures--CommentsClose CommentsPermalink





`(i) paid or incurred in any preceding calendar year which begins after the date of enactment of this section, andCommentsClose CommentsPermalink





`(ii) not previously allocated under paragraph (3).CommentsClose CommentsPermalink





`(2) QUALIFYING PROJECT- The term `qualifying project' means any transportation infrastructure project, including highways, mass transit systems, railroads, airports, ports, and waterways, in or connecting with the New York Liberty Zone (as defined in section 1400K(h)), which is designated as a qualifying project under this section jointly by the Governor of the State of New York and the Mayor of the City of New York, New York.CommentsClose CommentsPermalink





`(3) GENERAL ALLOCATION-CommentsClose CommentsPermalink





`(A) IN GENERAL- The Governor of the State of New York and the Mayor of the City of New York, New York, shall jointly allocate to each New York Liberty Zone governmental unit the portion of the qualifying project expenditure amount which may be taken into account by such governmental unit under subsection (a) for any calendar year in the credit period.CommentsClose CommentsPermalink





`(B) AGGREGATE LIMIT- The aggregate amount which may be allocated under subparagraph (A) for all calendar years in the credit period shall not exceed $2,000,000,000.CommentsClose CommentsPermalink





`(C) ANNUAL LIMIT-CommentsClose CommentsPermalink





`(i) IN GENERAL- The aggregate amount which may be allocated under subparagraph (A) for any calendar year in the credit period shall not exceed the sum of--CommentsClose CommentsPermalink





`(I) the applicable limit, plusCommentsClose CommentsPermalink





`(II) the aggregate amount authorized to be allocated under this paragraph for all preceding calendar years in the credit period which was not so allocated.CommentsClose CommentsPermalink





`(ii) APPLICABLE LIMIT- For purposes of clause (i), the applicable limit for any calendar year in the credit period is $169,000,000 and in the case of any calendar year after 2019, zero.CommentsClose CommentsPermalink





`(D) UNALLOCATED AMOUNTS AT END OF CREDIT PERIOD- If, as of the close of the credit period, the amount under subparagraph (B) exceeds the aggregate amount allocated under subparagraph (A) for all calendar years in the credit period, the Governor of the State of New York and the Mayor of the City of New York, New York, may jointly allocate to New York Liberty Zone governmental units for any calendar year in the 5-year period following the credit period an amount equal to--CommentsClose CommentsPermalink





`(i) the lesser of--CommentsClose CommentsPermalink





`(I) such excess, orCommentsClose CommentsPermalink





`(II) the qualifying project expenditure amount for such calendar year, reduced byCommentsClose CommentsPermalink





`(ii) the aggregate amount allocated under this subparagraph for all preceding calendar years.CommentsClose CommentsPermalink





`(4) ALLOCATION TO PAYROLL PERIODS- Each New York Liberty Zone governmental unit which has been allocated a portion of the qualifying project expenditure amount under paragraph (3) for a calendar year may allocate such portion to payroll periods beginning in such calendar year as such governmental unit determines appropriate.CommentsClose CommentsPermalink





`(c) Carryover of Unused Allocations-CommentsClose CommentsPermalink





`(1) IN GENERAL- Except as provided in paragraph (2), if the amount allocated under subsection (b)(3) to a New York Liberty Zone governmental unit for any calendar year exceeds the aggregate taxes imposed by section 3402 for which such governmental unit is liable under section 3403 for periods beginning in such year, such excess shall be carried to the succeeding calendar year and added to the allocation of such governmental unit for such succeeding calendar year. No amount may be carried under the preceding sentence to a calendar year after 2024.CommentsClose CommentsPermalink





`(2) REALLOCATION- If a New York Liberty Zone governmental unit does not use an amount allocated to it under subsection (b)(3) within the time prescribed by the Governor of the State of New York and the Mayor of the City of New York, New York, then such amount shall after such time be treated for purposes of subsection (b)(3) in the same manner as if it had never been allocated.CommentsClose CommentsPermalink





`(d) Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





`(1) CREDIT PERIOD- The term `credit period' means the 12-year period beginning on January 1, 2008.CommentsClose CommentsPermalink





`(2) NEW YORK LIBERTY ZONE GOVERNMENTAL UNIT- The term `New York Liberty Zone governmental unit' means--CommentsClose CommentsPermalink





`(A) the State of New York,CommentsClose CommentsPermalink





`(B) the City of New York, New York, andCommentsClose CommentsPermalink





`(C) any agency or instrumentality of such State or City.CommentsClose CommentsPermalink





`(3) TREATMENT OF FUNDS- Any expenditure for a qualifying project taken into account for purposes of the credit under this section shall be considered State and local funds for the purpose of any Federal program.CommentsClose CommentsPermalink





`(4) TREATMENT OF CREDIT AMOUNTS FOR PURPOSES OF WITHHOLDING TAXES- For purposes of this title, a New York Liberty Zone governmental unit shall be treated as having paid to the Secretary, on the day on which wages are paid to employees, an amount equal to the amount of the credit allowed to such entity under subsection (a) with respect to such wages, but only if such governmental unit deducts and withholds wages for such payroll period under section 3401 (relating to wage withholding).CommentsClose CommentsPermalink





`(e) Reporting- The Governor of the State of New York and the Mayor of the City of New York, New York, shall jointly submit to the Secretary an annual report--CommentsClose CommentsPermalink





`(1) which certifies--CommentsClose CommentsPermalink





`(A) the qualifying project expenditure amount for the calendar year, andCommentsClose CommentsPermalink





`(B) the amount allocated to each New York Liberty Zone governmental unit under subsection (b)(3) for the calendar year, andCommentsClose CommentsPermalink





`(2) includes such other information as the Secretary may require to carry out this section.CommentsClose CommentsPermalink





`(f) Guidance- The Secretary may prescribe such guidance as may be necessary or appropriate to ensure compliance with the purposes of this section.CommentsClose CommentsPermalink





`(g) Termination- No credit shall be allowed under subsection (a) for any calender year after 2024.'.CommentsClose CommentsPermalink





(b) Termination of Special Allowance and Expensing- Section 1400K(b)(2)(A)(v), as redesignated by subsection (a), is amended by striking `the termination date' and inserting `the date of the enactment of the American Infrastructure Investment and Improvement Act of 2007 or the termination date if pursuant to a binding contract in effect on such enactment date'.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 38(c)(3)(B) is amended by striking `section 1400L(a)' and inserting `section 1400K(a)'.CommentsClose CommentsPermalink





(2) Section 168(k)(2)(D)(ii) is amended by striking `section 1400L(c)(2)' and inserting `1400K(c)(2)'.CommentsClose CommentsPermalink





(3) The table of sections for part I of subchapter Y of chapter 1 is amended by striking `1400L' and inserting `1400K'.CommentsClose CommentsPermalink





(d) Effective Dates-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to periods beginning after December 31, 2007.CommentsClose CommentsPermalink





(2) TERMINATION OF SPECIAL ALLOWANCE AND EXPENSING- The amendment made by subsection (b) shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 302. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH CONTRIBUTIONS.

(a) In General- Section 402A(e)(1) (defining applicable retirement plan) is amended by striking `and' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and', and by adding at the end the following:CommentsClose CommentsPermalink





`(C) an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A).'.CommentsClose CommentsPermalink





(b) Elective Deferrals- Section 402A(e)(2) (defining elective deferral) is amended to read as follows:CommentsClose CommentsPermalink





`(2) ELECTIVE DEFERRAL- The term `elective deferral' means--CommentsClose CommentsPermalink





`(A) any elective deferral described in subparagraph (A) or (C) of section 402(g)(3), andCommentsClose CommentsPermalink





`(B) any elective deferral of compensation by an individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A).'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink

SEC. 303. INCREASED INFORMATION RETURN PENALTIES.

(a) Failure to File Correct Information Returns-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 6721(a)(1) (relating to imposition of penalty) is amended--CommentsClose CommentsPermalink





(A) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink





(B) by striking `$250,000' and inserting `$3,000,000'.CommentsClose CommentsPermalink





(2) REDUCTION WHERE CORRECTION IN SPECIFIED PERIOD-CommentsClose CommentsPermalink





(A) CORRECTION WITHIN 30 DAYS- Section 6721(b)(1) is amended--CommentsClose CommentsPermalink





(i) by striking `$15' and inserting `$50',CommentsClose CommentsPermalink





(ii) by striking `in lieu of $50' and inserting `in lieu of $250', andCommentsClose CommentsPermalink





(iii) by striking `$75,000' and inserting `$500,000'.CommentsClose CommentsPermalink





(B) FAILURES CORRECTED ON OR BEFORE AUGUST 1- Section 6721(b)(2) is amended--CommentsClose CommentsPermalink





(i) by striking `$30' and inserting `$100',CommentsClose CommentsPermalink





(ii) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink





(iii) by striking `$150,000' and inserting `$1,500,000'.CommentsClose CommentsPermalink





(3) LOWER LIMITATION FOR PERSONS WITH GROSS RECEIPTS OF NOT MORE THAN $5,000,000- Section 6721(d)(1) is amended--CommentsClose CommentsPermalink





(A) in subparagraph (A)--CommentsClose CommentsPermalink





(i) by striking `$100,000' and inserting `$1,000,000', andCommentsClose CommentsPermalink





(ii) by striking `$250,000' and inserting `$3,000,000',CommentsClose CommentsPermalink





(B) in subparagraph (B)--CommentsClose CommentsPermalink





(i) by striking `$25,000' and inserting `$175,000', andCommentsClose CommentsPermalink





(ii) by striking `$75,000' and inserting `$500,000', andCommentsClose CommentsPermalink





(C) in subparagraph (C)--CommentsClose CommentsPermalink





(i) by striking `$50,000' and inserting `$500,000', andCommentsClose CommentsPermalink





(ii) by striking `$150,000' and inserting `$1,500,000'.CommentsClose CommentsPermalink





(4) PENALTY IN CASE OF INTENTIONAL DISREGARD- Section 6721(e) is amended--CommentsClose CommentsPermalink





(A) by striking `$100' in paragraph (2) and inserting `$500',CommentsClose CommentsPermalink





(B) by striking `$250,000' in paragraph (3)(A) and inserting `$3,000,000'.CommentsClose CommentsPermalink





(b) Failure to Furnish Correct Payee Statements-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 6722(a) is amended--CommentsClose CommentsPermalink





(A) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink





(B) by striking `$100,000' and inserting `$1,000,000'.CommentsClose CommentsPermalink





(2) PENALTY IN CASE OF INTENTIONAL DISREGARD- Section 6722(c) is amended--CommentsClose CommentsPermalink





(A) by striking `$100' in paragraph (1) and inserting `$500', andCommentsClose CommentsPermalink





(B) by striking `$100,000' in paragraph (2)(A) and inserting `$1,000,000'.CommentsClose CommentsPermalink





(c) Failure to Comply With Other Information Reporting Requirements- Section 6723 is amended--CommentsClose CommentsPermalink





(1) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink





(2) by striking `$100,000' and inserting `$1,000,000'.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply with respect to information returns required to be filed on or after January 1, 2008.CommentsClose CommentsPermalink

SEC. 304. EXEMPTION OF CERTAIN COMMERCIAL CARGO FROM HARBOR MAINTENANCE TAX.

(a) In General- Section 4462 is amended--CommentsClose CommentsPermalink





(1) by redesignating subsection (i) as subsection (j), andCommentsClose CommentsPermalink





(2) by inserting after subsection (h) the following new subsection:CommentsClose CommentsPermalink





`(i) Exemption for Certain Cargo Transported on the Great Lakes Saint Lawrence Seaway System-CommentsClose CommentsPermalink





`(1) IN GENERAL- No tax shall be imposed under section 4461(a) with respect to--CommentsClose CommentsPermalink





`(A) commercial cargo (other than bulk cargo) loaded at a port in the United States located in the Great Lakes Saint Lawrence Seaway System and unloaded at another port in the United States located in such system, andCommentsClose CommentsPermalink





`(B) commercial cargo (other than bulk cargo) unloaded at a port in the United States located in the Great Lakes Saint Lawrence Seaway System which was loaded at a port in Canada located in such system.CommentsClose CommentsPermalink





`(2) BULK CARGO- For purposes of this subsection, the term `bulk cargo' shall have the meaning given such term by section 53101(1) of title 46, United States Code (as in effect on the date of the enactment of this section).CommentsClose CommentsPermalink





`(3) GREAT LAKES SAINT LAWRENCE SEAWAY SYSTEM- For purposes of this subsection, the term `Great Lakes Saint Lawrence Seaway System' means the waterway between Duluth, Minnesota and Sept. Iles, Quebec, encompassing the five Great Lakes, their connecting channels, and the Saint Lawrence River.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 305. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

(a) In General- Subpart H of part IV of subchapter A of chapter 1 (relating to credits against tax) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

`SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED RAIL INFRASTRUCTURE BONDS.

`(a) Allowance of Credit- If a taxpayer holds a qualified rail infrastructure bond on 1 or more credit allowance dates of the bond occurring during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates.CommentsClose CommentsPermalink





`(b) Amount of Credit-CommentsClose CommentsPermalink





`(1) IN GENERAL- The amount of the credit determined under this subsection with respect to any credit allowance date for a qualified rail infrastructure bond is 25 percent of the annual credit determined with respect to such bond.CommentsClose CommentsPermalink





`(2) ANNUAL CREDIT- The annual credit determined with respect to any qualified rail infrastructure bond is the product of--CommentsClose CommentsPermalink





`(A) the credit rate determined by the Secretary under paragraph (3) for the day on which such bond was sold, multiplied byCommentsClose CommentsPermalink





`(B) the outstanding face amount of the bond.CommentsClose CommentsPermalink





`(3) DETERMINATION- For purposes of paragraph (2), with respect to any qualified rail infrastructure bond, the Secretary shall determine daily or cause to be determined daily a credit rate which shall apply to the first day on which there is a binding, written contract for the sale or exchange of the bond. The credit rate for any day is the credit rate which the Secretary or the Secretary's designee estimates will permit the issuance of qualified rail infrastructure bonds with a specified maturity or redemption date, without discount and without interest cost to the qualified issuer.CommentsClose CommentsPermalink





`(4) CREDIT ALLOWANCE DATE- For purposes of this section, the term `credit allowance date' means--CommentsClose CommentsPermalink





`(A) March 15,CommentsClose CommentsPermalink





`(B) June 15,CommentsClose CommentsPermalink





`(C) September 15, andCommentsClose CommentsPermalink





`(D) December 15.CommentsClose CommentsPermalink





Such term also includes the last day on which the bond is outstanding.CommentsClose CommentsPermalink





`(5) SPECIAL RULE FOR ISSUANCE AND REDEMPTION- In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed or matures.CommentsClose CommentsPermalink





`(c) Limitation Based on Amount of Tax- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink





`(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, overCommentsClose CommentsPermalink





`(2) the sum of the credits allowable under this part (other than this subpart, subpart C, and section 1400N(l)).CommentsClose CommentsPermalink





`(d) Qualified Rail Infrastructure Bond- For purposes of this section--CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `qualified rail infrastructure bond' means any bond issued as part of an issue if--CommentsClose CommentsPermalink





`(A) the bond is issued by a qualified issuer pursuant to an allocation by the Secretary to such issuer of a portion of the national qualified rail infrastructure bond annual limitation under subsection (f)(2) by not later than the end of the calendar year following the year of such allocation,CommentsClose CommentsPermalink





`(B) 95 percent or more of the proceeds of such issue are to be used for capital expenditures incurred for 1 or more qualified projects,CommentsClose CommentsPermalink





`(C) the qualified issuer designates such bond for purposes of this section and the bond is in registered form, andCommentsClose CommentsPermalink





`(D) the issue meets the requirements of subsection (h).CommentsClose CommentsPermalink





`(2) QUALIFIED PROJECT; SPECIAL USE RULES-CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `qualified project' means a project eligible under subsection (b) of section 26101 of title 49, United States Code, which the Secretary determines was selected using the criteria of subsection (c) of such section 26101 by the Secretary of Transportation, that makes a substantial contribution to improving a rail transportation corridor for intercity passenger rail use.CommentsClose CommentsPermalink





`(B) CERTIFICATION REQUIRED REGARDING CERTAIN PROJECTS- The Secretary shall not consider a project to be a qualified project unless an applicant certifies to the Secretary that--CommentsClose CommentsPermalink





`(i) if a project involves a rail transportation corridor which includes the use of rights-of-way owned by a freight railroad, the applicant has entered into a written agreement with such freight railroad regarding the use of the rights-of-way and has received assurances that collective bargaining agreements between such freight railroad and its employees (including terms regarding the contracting of work performed on such corridor) shall remain in full force and effect during the term of such written agreement,CommentsClose CommentsPermalink





`(ii) any person which provides railroad transportation over infrastructure improved or acquired pursuant to this section, is a rail carrier as defined by section 10102 of title 49, United States Code, andCommentsClose CommentsPermalink





`(iii) the applicant shall, with respect to improvements to rail infrastructure made pursuant to this section, comply with the standards applicable to construction work in such title 49, in the same manner in which the National Railroad Passenger Corporation is required to comply with such standards.CommentsClose CommentsPermalink





`(C) REFINANCING RULES- For purposes of paragraph (1)(B), a qualified project may be refinanced with proceeds of a qualified rail infrastructure bond only if the indebtedness being refinanced (including any obligation directly or indirectly refinanced by such indebtedness) was originally incurred after the date of the enactment of this section.CommentsClose CommentsPermalink





`(D) REIMBURSEMENT- For purposes of paragraph (1)(B), a qualified rail infrastructure bond may be issued to reimburse for amounts paid after the date of the enactment of this section with respect to a qualified project, but only if--CommentsClose CommentsPermalink





`(i) prior to the payment of the original expenditure, the issuer declared its intent to reimburse such expenditure with the proceeds of a qualified rail infrastructure bond,CommentsClose CommentsPermalink





`(ii) not later than 60 days after payment of the original expenditure, the qualified issuer adopts an official intent to reimburse the original expenditure with such proceeds, andCommentsClose CommentsPermalink





`(iii) the reimbursement is made not later than 18 months after the date the original expenditure is paid.CommentsClose CommentsPermalink





`(E) TREATMENT OF CHANGES IN USE- For purposes of paragraph (1)(B), the proceeds of an issue shall not be treated as used for a qualified project to the extent that a qualified issuer takes any action within its control which causes such proceeds not to be used for a qualified project. The Secretary shall prescribe regulations specifying remedial actions that may be taken (including conditions to taking such remedial actions) to prevent an action described in the preceding sentence from causing a bond to fail to be a qualified rail infrastructure bond.CommentsClose CommentsPermalink





`(e) Maturity Limitations-CommentsClose CommentsPermalink





`(1) DURATION OF TERM- A bond shall not be treated as a qualified rail infrastructure bond if the maturity of such bond exceeds the maximum term determined by the Secretary under paragraph (2) with respect to such bond.CommentsClose CommentsPermalink





`(2) MAXIMUM TERM- During each calendar month, the Secretary shall determine the maximum term permitted under this paragraph for bonds issued during the following calendar month. Such maximum term shall be the term which the Secretary estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of such bond. Such present value shall be determined without regard to the requirements of paragraph (3) and using as a discount rate the average annual interest rate of tax-exempt obligations having a term of 10 years or more which are issued during the month. If the term as so determined is not a multiple of a whole year, such term shall be rounded to the next highest whole year.CommentsClose CommentsPermalink





`(3) RATABLE PRINCIPAL AMORTIZATION REQUIRED- A bond shall not be treated as a qualified rail infrastructure bond unless it is part of an issue which provides for an equal amount of principal to be paid by the qualified issuer during each calendar year that the issue is outstanding.CommentsClose CommentsPermalink





`(f) Annual Limitation on Amount of Bonds Designated-CommentsClose CommentsPermalink





`(1) NATIONAL ANNUAL LIMITATION- There is a national qualified rail infrastructure bond annual limitation for each calendar year. Such limitation is $900,000,000 for 2008, 2009, and 2010, and, except as provided in paragraph (3), zero thereafter.CommentsClose CommentsPermalink





`(2) ALLOCATION BY SECRETARY- The national qualified rail infrastructure bond annual limitation for a calendar year shall be allocated by the Secretary among qualified projects in such manner as the Secretary determines appropriate.CommentsClose CommentsPermalink





`(3) CARRYOVER OF UNUSED LIMITATION- If for any calendar year, the national qualified rail infrastructure bond annual limitation for such year exceeds the amount of bonds allocated during such year, such limitation for the following calendar year shall be increased by the amount of such excess. Any carryforward of a limitation may be carried only to the first 2 years following the unused limitation year. For purposes of the preceding sentence, a limitation shall be treated as used on a first-in first-out basis.CommentsClose CommentsPermalink





`(g) Credit Treated as Interest- For purposes of this title, the credit determined under subsection (a) shall be treated as interest which is includible in gross income.CommentsClose CommentsPermalink





`(h) Special Rules Relating to Expenditures-CommentsClose CommentsPermalink





`(1) IN GENERAL- An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the qualified issuer reasonably expects--CommentsClose CommentsPermalink





`(A) at least 95 percent of the proceeds of the issue are to be spent for 1 or more qualified projects within the 5-year period beginning on the date of issuance of the qualified rail infrastructure bond,CommentsClose CommentsPermalink





`(B) a binding commitment with a third party to spend at least 10 percent of the proceeds of the issue will be incurred within the 6-month period beginning on the date of issuance of the qualified rail infrastructure bond, andCommentsClose CommentsPermalink





`(C) such projects will be completed with due diligence and the proceeds from the sale of the issue will be spent with due diligence.CommentsClose CommentsPermalink





`(2) EXTENSION OF PERIOD- Upon submission of a request prior to the expiration of the period described in paragraph (1)(A), the Secretary may extend such period if the qualified issuer establishes that the failure to satisfy the 5-year requirement is due to reasonable cause and the related projects will continue to proceed with due diligence.CommentsClose CommentsPermalink





`(3) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PROCEEDS WITHIN 5 YEARS- To the extent that less than 95 percent of the proceeds of such issue are expended by the close of the 5-year period beginning on the date of issuance (or if an extension has been obtained under paragraph (2), by the close of the extended period), the qualified issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.CommentsClose CommentsPermalink





`(i) Special Rules Relating to Arbitrage- A bond which is part of an issue shall not be treated as a qualified rail infrastructure bond unless, with respect to the issue of which the bond is a part, the qualified issuer satisfies the arbitrage requirements of section 148 with respect to proceeds of the issue.CommentsClose CommentsPermalink





`(j) Special Rules Relating to Pool Bonds- No portion of a pooled financing bond may be allocable to loan unless the borrower has entered into a written loan commitment for such portion prior to the issue date of such issue.CommentsClose CommentsPermalink





`(k) Other Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





`(1) BOND- The term `bond' includes any obligation.CommentsClose CommentsPermalink





`(2) POOLED FINANCING BOND- The term `pooled financing bond' shall have the meaning given such term by section 149(f)(4)(A).CommentsClose CommentsPermalink





`(3) QUALIFIED ISSUER- The term `qualified issuer' means 1 or more States or an interstate compact of States.CommentsClose CommentsPermalink





`(4) STATE- The term `State' includes the District of Columbia and any possession of the United States.CommentsClose CommentsPermalink





`(5) S CORPORATIONS AND PARTNERSHIPS- In the case of a qualified rail infrastructure bond held by an S corporation or partnership, the allocation of the credit allowed by this section to the shareholders of the corporation or partners of such partnership shall be treated as a distribution.CommentsClose CommentsPermalink





`(6) BONDS HELD BY REGULATED INVESTMENT COMPANIES- If any qualified rail infrastructure bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.CommentsClose CommentsPermalink





`(7) REPORTING- Issuers of qualified rail infrastructure bonds shall submit reports similar to the reports required under section 149(e).CommentsClose CommentsPermalink





`(8) TERMINATION- This section shall not apply with respect to any bond issued after December 31, 2012.'.CommentsClose CommentsPermalink





(b) Reporting- Subsection (d) of section 6049 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(9) REPORTING OF CREDIT ON QUALIFIED RAIL INFRASTRUCTURE BONDS-CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of subsection (a), the term `interest' includes amounts includible in gross income under section 54A(g) and such amounts shall be treated as paid on the credit allowance date (as defined in section 54A(b)(4)).CommentsClose CommentsPermalink





`(B) REPORTING TO CORPORATIONS, ETC- Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A), subsection (b)(4) shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i) of such subsection.CommentsClose CommentsPermalink





`(C) REGULATORY AUTHORITY- The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.'.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) The table of sections for subpart H of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





`Sec. 54A. Credit to holders of qualified rail infrastructure bonds.'.CommentsClose CommentsPermalink





(2) Section 54(c)(2) is amended by inserting `, section 54A,' after `subpart C'.CommentsClose CommentsPermalink





(d) Issuance of Regulations- The Secretary of Treasury shall issue regulations required under section 54A of the Internal Revenue Code of 1986 (as added by this section) not later than 120 days after the date of the enactment of this Act.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 306. REPEAL OF SUSPENSION OF CERTAIN PENALTIES AND INTEREST.

(a) In General- Section 6404 is amended by striking subsection (g).CommentsClose CommentsPermalink





(b) Effective Date-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to notices provided by the Secretary of the Treasury, or his delegate after the date which is 6 months after the date of the enactment of the Small Business and Work Opportunity Tax Act of 2007.CommentsClose CommentsPermalink





(2) EXCEPTION FOR CERTAIN TAXPAYERS- The amendments made by this section shall not apply to any taxpayer with respect to whom a suspension of any interest, penalty, addition to tax, or other amount is in effect on the date which is 6 months after the date of the enactment of the Small Business and Work Opportunity Tax Act of 2007.CommentsClose CommentsPermalink

SEC. 307. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, AND OTHER AMOUNTS.

(a) In General- Subsection (f) of section 162 (relating to trade or business expenses) is amended to read as follows:CommentsClose CommentsPermalink





`(f) Fines, Penalties, and Other Amounts-CommentsClose CommentsPermalink





`(1) IN GENERAL- Except as provided in paragraph (2), no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred (whether by suit, agreement, or otherwise) to, or at the direction of, a government or entity described in paragraph (4) in relation to--CommentsClose CommentsPermalink





`(A) the violation of any law, orCommentsClose CommentsPermalink





`(B) an investigation or inquiry into the potential violation of any law which is initiated by such government or entity.CommentsClose CommentsPermalink





`(2) EXCEPTION FOR AMOUNTS CONSTITUTING RESTITUTION OR PAID TO COME INTO COMPLIANCE WITH LAW- Paragraph (1) shall not apply to any amount which--CommentsClose CommentsPermalink





`(A) the taxpayer establishes--CommentsClose CommentsPermalink





`(i) constitutes restitution (or remediation of property) for damage or harm caused by, or which may be caused by, the violation of any law or the potential violation of any law, orCommentsClose CommentsPermalink





`(ii) is paid to come into compliance with any law which was violated or involved in the investigation or inquiry, andCommentsClose CommentsPermalink





`(B) is identified as an amount described in clause (i) or (ii) of subparagraph (A), as the case may be, in the court order or settlement agreement, except that the requirement of this subparagraph shall not apply in the case of any settlement agreement which requires the taxpayer to pay or incur an amount not greater than $1,000,000.CommentsClose CommentsPermalink





A taxpayer shall not meet the requirements of subparagraph (A) solely by reason an identification under subparagraph (B). This paragraph shall not apply to any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation unless such amount is paid or incurred for a cost or fee regularly charged for any routine audit or other customary review performed by the government or entity.CommentsClose CommentsPermalink





`(3) EXCEPTION FOR AMOUNTS PAID OR INCURRED AS THE RESULT OF CERTAIN COURT ORDERS- Paragraph (1) shall not apply to any amount paid or incurred by order of a court in a suit in which no government or entity described in paragraph (4) is a party.CommentsClose CommentsPermalink





`(4) CERTAIN NONGOVERNMENTAL REGULATORY ENTITIES- An entity is described in this paragraph if it is--CommentsClose CommentsPermalink





`(A) a nongovernmental entity which exercises self-regulatory powers (including imposing sanctions) in connection with a qualified board or exchange (as defined in section 1256(g)(7)), orCommentsClose CommentsPermalink





`(B) to the extent provided in regulations, a nongovernmental entity which exercises self-regulatory powers (including imposing sanctions) as part of performing an essential governmental function.CommentsClose CommentsPermalink





`(5) EXCEPTION FOR TAXES DUE- Paragraph (1) shall not apply to any amount paid or incurred as taxes due.'.CommentsClose CommentsPermalink





(b) Reporting of Deductible Amounts-CommentsClose CommentsPermalink





(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 is amended by inserting after section 6050V the following new section:CommentsClose CommentsPermalink

`SEC. 6050W. INFORMATION WITH RESPECT TO CERTAIN FINES, PENALTIES, AND OTHER AMOUNTS.

`(a) Requirement of Reporting-CommentsClose CommentsPermalink





`(1) IN GENERAL- The appropriate official of any government or entity which is described in section 162(f)(4) which is involved in a suit or agreement described in paragraph (2) shall make a return in such form as determined by the Secretary setting forth--CommentsClose CommentsPermalink





`(A) the amount required to be paid as a result of the suit or agreement to which paragraph (1) of section 162(f) applies,CommentsClose CommentsPermalink





`(B) any amount required to be paid as a result of the suit or agreement which constitutes restitution or remediation of property, andCommentsClose CommentsPermalink





`(C) any amount required to be paid as a result of the suit or agreement for the purpose of coming into compliance with any law which was violated or involved in the investigation or inquiry.CommentsClose CommentsPermalink





`(2) SUIT OR AGREEMENT DESCRIBED-CommentsClose CommentsPermalink





`(A) IN GENERAL- A suit or agreement is described in this paragraph if--CommentsClose CommentsPermalink





`(i) it is--CommentsClose CommentsPermalink





`(I) a suit with respect to a violation of any law over which the government or entity has authority and with respect to which there has been a court order, orCommentsClose CommentsPermalink





`(II) an agreement which is entered into with respect to a violation of any law over which the government or entity has authority, or with respect to an investigation or inquiry by the government or entity into the potential violation of any law over which such government or entity has authority, andCommentsClose CommentsPermalink





`(ii) the aggregate amount involved in all court orders and agreements with respect to the violation, investigation, or inquiry is $600 or more.CommentsClose CommentsPermalink





`(B) ADJUSTMENT OF REPORTING THRESHOLD- The Secretary may adjust the $600 amount in subparagraph (A)(ii) as necessary in order to ensure the efficient administration of the internal revenue laws.CommentsClose CommentsPermalink





`(3) TIME OF FILING- The return required under this subsection shall be filed not later than--CommentsClose CommentsPermalink





`(A) 30 days after the date on which a court order is issued with respect to the suit or the date the agreement is entered into, as the case may be, orCommentsClose CommentsPermalink





`(B) the date specified by the Secretary.CommentsClose CommentsPermalink





`(b) Statements To Be Furnished to Individuals Involved in the Settlement- Every person required to make a return under subsection (a) shall furnish to each person who is a party to the suit or agreement a written statement showing--CommentsClose CommentsPermalink





`(1) the name of the government or entity, andCommentsClose CommentsPermalink





`(2) the information supplied to the Secretary under subsection (a)(1).CommentsClose CommentsPermalink





The written statement required under the preceding sentence shall be furnished to the person at the same time the government or entity provides the Secretary with the information required under subsection (a).CommentsClose CommentsPermalink





`(c) Appropriate Official Defined- For purposes of this section, the term `appropriate official' means the officer or employee having control of the suit, investigation, or inquiry or the person appropriately designated for purposes of this section.'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by inserting after the item relating to section 6050V the following new item:CommentsClose CommentsPermalink





`Sec. 6050W. Information with respect to certain fines, penalties, and other amounts.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to amounts paid or incurred on or after the date of the enactment of this Act, except that such amendments shall not apply to amounts paid or incurred under any binding order or agreement entered into before such date. Such exception shall not apply to an order or agreement requiring court approval unless the approval was obtained before such date.CommentsClose CommentsPermalink

SEC. 308. REVISION OF TAX RULES ON EXPATRIATION.

(a) In General- Subpart A of part II of subchapter N of chapter 1 is amended by inserting after section 877 the following new section:CommentsClose CommentsPermalink

`SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

`(a) General Rules- For purposes of this subtitle--CommentsClose CommentsPermalink





`(1) MARK TO MARKET- All property of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market value.CommentsClose CommentsPermalink





`(2) RECOGNITION OF GAIN OR LOSS- In the case of any sale under paragraph (1)--CommentsClose CommentsPermalink





`(A) notwithstanding any other provision of this title, any gain arising from such sale shall be taken into account for the taxable year of the sale, andCommentsClose CommentsPermalink





`(B) any loss arising from such sale shall be taken into account for the taxable year of the sale to the extent otherwise provided by this title, except that section 1091 shall not apply to any such loss.CommentsClose CommentsPermalink





Proper adjustment shall be made in the amount of any gain or loss subsequently realized for gain or loss taken into account under the preceding sentence, determined without regard to paragraph (3).CommentsClose CommentsPermalink





`(3) EXCLUSION FOR CERTAIN GAIN-CommentsClose CommentsPermalink





`(A) IN GENERAL- The amount which would (but for this paragraph) be includible in the gross income of any individual by reason of paragraph (1) shall be reduced (but not below zero) by $600,000.CommentsClose CommentsPermalink





`(B) ADJUSTMENT FOR INFLATION-CommentsClose CommentsPermalink





`(i) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2008, the dollar amount in subparagraph (A) shall be increased by an amount equal to--CommentsClose CommentsPermalink





`(I) such dollar amount, multiplied byCommentsClose CommentsPermalink





`(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2007' for `calendar year 1992' in subparagraph (B) thereof.CommentsClose CommentsPermalink





`(ii) ROUNDING- If any amount as adjusted under clause (i) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.CommentsClose CommentsPermalink





`(b) Election To Defer Tax-CommentsClose CommentsPermalink





`(1) IN GENERAL- If the taxpayer elects the application of this subsection with respect to any property treated as sold by reason of subsection (a), the time for payment of the additional tax attributable to such property shall be extended until the due date of the return for the taxable year in which such property is disposed of (or, in the case of property disposed of in a transaction in which gain is not recognized in whole or in part, until such other date as the Secretary may prescribe).CommentsClose CommentsPermalink





`(2) DETERMINATION OF TAX WITH RESPECT TO PROPERTY- For purposes of paragraph (1), the additional tax attributable to any property is an amount which bears the same ratio to the additional tax imposed by this chapter for the taxable year solely by reason of subsection (a) as the gain taken into account under subsection (a) with respect to such property bears to the total gain taken into account under subsection (a) with respect to all property to which subsection (a) applies.CommentsClose CommentsPermalink





`(3) TERMINATION OF EXTENSION- The due date for payment of tax may not be extended under this subsection later than the due date for the return of tax imposed by this chapter for the taxable year which includes the date of death of the expatriate (or, if earlier, the time that the security provided with respect to the property fails to meet the requirements of paragraph (4), unless the taxpayer corrects such failure within the time specified by the Secretary).CommentsClose CommentsPermalink





`(4) SECURITY-CommentsClose CommentsPermalink





`(A) IN GENERAL- No election may be made under paragraph (1) with respect to any property unless adequate security is provided with respect to such property.CommentsClose CommentsPermalink





`(B) ADEQUATE SECURITY- For purposes of subparagraph (A), security with respect to any property shall be treated as adequate security if--CommentsClose CommentsPermalink





`(i) it is a bond which is furnished to, and accepted by, the Secretary, which is conditioned on the payment of tax (and interest thereon), and which meets the requirements of section 6325, orCommentsClose CommentsPermalink





`(ii) it is another form of security for such payment (including letters of credit) that meets such requirements as the Secretary may prescribe.CommentsClose CommentsPermalink





`(5) WAIVER OF CERTAIN RIGHTS- No election may be made under paragraph (1) unless the taxpayer makes an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of any tax imposed by reason of this section.CommentsClose CommentsPermalink





`(6) ELECTIONS- An election under paragraph (1) shall only apply to property described in the election and, once made, is irrevocable.CommentsClose CommentsPermalink





`(7) INTEREST- For purposes of section 6601, the last date for the payment of tax shall be determined without regard to the election under this subsection.CommentsClose CommentsPermalink





`(c) Exception for Certain Property- Subsection (a) shall not apply to--CommentsClose CommentsPermalink





`(1) any deferred compensation item (as defined in subsection (d)(4)),CommentsClose CommentsPermalink





`(2) any specified tax deferred account (as defined in subsection (e)(2)), andCommentsClose CommentsPermalink





`(3) any interest in a nongrantor trust (as defined in subsection (f)(3)).CommentsClose CommentsPermalink





`(d) Treatment of Deferred Compensation Items-CommentsClose CommentsPermalink





`(1) WITHHOLDING ON ELIGIBLE DEFERRED COMPENSATION ITEMS-CommentsClose CommentsPermalink





`(A) IN GENERAL- In the case of any eligible deferred compensation item, the payor shall deduct and withhold from any taxable payment to a covered expatriate with respect to such item a tax equal to 30 percent thereof.CommentsClose CommentsPermalink





`(B) TAXABLE PAYMENT- For purposes of subparagraph (A), the term `taxable payment' means with respect to a covered expatriate any payment to the extent it would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States. A deferred compensation item shall be taken into account as a payment under the preceding sentence when such item would be so includible.CommentsClose CommentsPermalink





`(2) OTHER DEFERRED COMPENSATION ITEMS- In the case of any deferred compensation item which is not an eligible deferred compensation item--CommentsClose CommentsPermalink





`(A)(i) with respect to any deferred compensation item to which clause (ii) does not apply, an amount equal to the present value of the covered expatriate's accrued benefit shall be treated as having been received by such individual on the day before the expatriation date as a distribution under the plan, andCommentsClose CommentsPermalink





`(ii) with respect to any deferred compensation item referred to in paragraph (4)(D), the rights of the covered expatriate to such item shall be treated as becoming transferable and not subject to a substantial risk of forfeiture on the day before the expatriation date,CommentsClose CommentsPermalink





`(B) no early distribution tax shall apply by reason of such treatment, andCommentsClose CommentsPermalink





`(C) appropriate adjustments shall be made to subsequent distributions from the plan to reflect such treatment.CommentsClose CommentsPermalink





`(3) ELIGIBLE DEFERRED COMPENSATION ITEMS- For purposes of this subsection, the term `eligible deferred compensation item' means any deferred compensation item with respect to which--CommentsClose CommentsPermalink





`(A) the payor of such item is--CommentsClose CommentsPermalink





`(i) a United States person, orCommentsClose CommentsPermalink





`(ii) a person who is not a United States person but who elects to be treated as a United States person for purposes of paragraph (1) and meets such requirements as the Secretary may provide to ensure that the payor will meet the requirements of paragraph (1), andCommentsClose CommentsPermalink





`(B) the covered expatriate--CommentsClose CommentsPermalink





`(i) notifies the payor of his status as a covered expatriate, andCommentsClose CommentsPermalink





`(ii) makes an irrevocable waiver of any right to claim any reduction under any treaty with the United States in withholding on such item.CommentsClose CommentsPermalink





`(4) DEFERRED COMPENSATION ITEM- For purposes of this subsection, the term `deferred compensation item' means--CommentsClose CommentsPermalink





`(A) any interest in a plan or arrangement described in section 219(g)(5),CommentsClose CommentsPermalink





`(B) any interest in a foreign pension plan or similar retirement arrangement or program,CommentsClose CommentsPermalink





`(C) any item of deferred compensation, andCommentsClose CommentsPermalink





`(D) any property, or right to property, which the individual is entitled to receive in connection with the performance of services to the extent not previously taken into account under section 83 or in accordance with section 83.CommentsClose CommentsPermalink





`(5) EXCEPTION- Paragraphs (1) and (2) shall not apply to any deferred compensation item which is attributable to services performed outside the United States while the covered expatriate was not a citizen or resident of the United States.CommentsClose CommentsPermalink





`(6) SPECIAL RULES-CommentsClose CommentsPermalink





`(A) APPLICATION OF WITHHOLDING RULES- Rules similar to the rules of subchapter B of chapter 3 shall apply for purposes of this subsection.CommentsClose CommentsPermalink





`(B) APPLICATION OF TAX- Any item subject to the withholding tax imposed under paragraph (1) shall be subject to tax under section 871.CommentsClose CommentsPermalink





`(C) COORDINATION WITH OTHER WITHHOLDING REQUIREMENTS- Any item subject to withholding under paragraph (1) shall not be subject to withholding under section 1441 or chapter 24.CommentsClose CommentsPermalink





`(e) Treatment of Specified Tax Deferred Accounts-CommentsClose CommentsPermalink





`(1) ACCOUNT TREATED AS DISTRIBUTED- In the case of any interest in a specified tax deferred account held by a covered expatriate on the day before the expatriation date--CommentsClose CommentsPermalink





`(A) the covered expatriate shall be treated as receiving a distribution of his entire interest in such account on the day before the expatriation date,CommentsClose CommentsPermalink





`(B) no early distribution tax shall apply by reason of such treatment, andCommentsClose CommentsPermalink





`(C) appropriate adjustments shall be made to subsequent distributions from the account to reflect such treatment.CommentsClose CommentsPermalink





`(2) SPECIFIED TAX DEFERRED ACCOUNT- For purposes of paragraph (1), the term `specified tax deferred account' means an individual retirement plan (as defined in section 7701(a)(37)) other than any arrangement described in subsection (k) or (p) of section 408, a qualified tuition program (as defined in section 529), a Coverdell education savings account (as defined in section 530), a health savings account (as defined in section 223), and an Archer MSA (as defined in section 220).CommentsClose CommentsPermalink





`(f) Special Rules for Nongrantor Trusts-CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of a distribution (directly or indirectly) of any property from a nongrantor trust to a covered expatriate--CommentsClose CommentsPermalink





`(A) the trustee shall deduct and withhold from such distribution an amount equal to 30 percent of the taxable portion of the distribution, andCommentsClose CommentsPermalink





`(B) if the fair market value of such property exceeds its adjusted basis in the hands of the trust, gain shall be recognized to the trust as if such property were sold to the expatriate at its fair market value.CommentsClose CommentsPermalink





`(2) TAXABLE PORTION- For purposes of this subsection, the term `taxable portion' means, with respect to any distribution, that portion of the distribution which would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States.CommentsClose CommentsPermalink





`(3) NONGRANTOR TRUST- For purposes of this subsection, the term `nongrantor trust' means the portion of any trust that the individual is not considered the owner of under subpart E of part I of subchapter J. The determination under the preceding sentence shall be made immediately before the expatriation date.CommentsClose CommentsPermalink





`(4) SPECIAL RULES RELATING TO WITHHOLDING- For purposes of this subsection--CommentsClose CommentsPermalink





`(A) rules similar to the rules of subsection (d)(6) shall apply, andCommentsClose CommentsPermalink





`(B) the covered expatriate shall be treated as having waived any right to claim any reduction under any treaty with the United States in withholding on any distribution to which paragraph (1)(A) applies.CommentsClose CommentsPermalink





`(g) Definitions and Special Rules Relating to Expatriation- For purposes of this section--CommentsClose CommentsPermalink





`(1) COVERED EXPATRIATE-CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `covered expatriate' means an expatriate who meets the requirements of subparagraph (A), (B), or (C) of section 877(a)(2).CommentsClose CommentsPermalink





`(B) EXCEPTIONS- An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if--CommentsClose CommentsPermalink





`(i) the individual--CommentsClose CommentsPermalink





`(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, andCommentsClose CommentsPermalink





`(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, orCommentsClose CommentsPermalink





`(ii)(I) the individual's relinquishment of United States citizenship occurs before such individual attains age 18 1/2 , andCommentsClose CommentsPermalink





`(II) the individual has been a resident of the United States (as so defined) for not more than 10 taxable years before the date of relinquishment.CommentsClose CommentsPermalink





`(C) COVERED EXPATRIATES ALSO SUBJECT TO TAX AS CITIZENS OR RESIDENTS- In the case of any covered expatriate who is subject to tax as a citizen or resident of the United States for any period beginning after the expatriation date, such individual shall not be treated as a covered expatriate during such period for purposes of subsections (d)(1) and (f) and section 2801.CommentsClose CommentsPermalink





`(2) EXPATRIATE- The term `expatriate' means--CommentsClose CommentsPermalink





`(A) any United States citizen who relinquishes his citizenship, andCommentsClose CommentsPermalink





`(B) any long-term resident of the United States who ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)).CommentsClose CommentsPermalink





`(3) EXPATRIATION DATE- The term `expatriation date' means--CommentsClose CommentsPermalink





`(A) the date an individual relinquishes United States citizenship, orCommentsClose CommentsPermalink





`(B) in the case of a long-term resident of the United States, the date on which the individual ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)).CommentsClose CommentsPermalink





`(4) RELINQUISHMENT OF CITIZENSHIP- A citizen shall be treated as relinquishing his United States citizenship on the earliest of--CommentsClose CommentsPermalink





`(A) the date the individual renounces his United States nationality before a diplomatic or consular officer of the United States pursuant to paragraph (5) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),CommentsClose CommentsPermalink





`(B) the date the individual furnishes to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),CommentsClose CommentsPermalink





`(C) the date the United States Department of State issues to the individual a certificate of loss of nationality, orCommentsClose CommentsPermalink





`(D) the date a court of the United States cancels a naturalized citizen's certificate of naturalization.CommentsClose CommentsPermalink





Subparagraph (A) or (B) shall not apply to any individual unless the renunciation or voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the United States Department of State.CommentsClose CommentsPermalink





`(5) LONG-TERM RESIDENT- The term `long-term resident' has the meaning given to such term by section 877(e)(2).CommentsClose CommentsPermalink





`(6) EARLY DISTRIBUTION TAX- The term `early distribution tax' means any increase in tax imposed under section 72(t), 220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).CommentsClose CommentsPermalink





`(h) Other Rules-CommentsClose CommentsPermalink





`(1) TERMINATION OF DEFERRALS, ETC- In the case of any covered expatriate, notwithstanding any other provision of this title--CommentsClose CommentsPermalink





`(A) any time period for acquiring property which would result in the reduction in the amount of gain recognized with respect to property disposed of by the taxpayer shall terminate on the day before the expatriation date, andCommentsClose CommentsPermalink





`(B) any extension of time for payment of tax shall cease to apply on the day before the expatriation date and the unpaid portion of such tax shall be due and payable at the time and in the manner prescribed by the Secretary.CommentsClose CommentsPermalink





`(2) STEP-UP IN BASIS- Solely for purposes of determining any tax imposed by reason of subsection (a), property which was held by an individual on the date the individual first became a resident of the United States (within the meaning of section 7701(b)) shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable.CommentsClose CommentsPermalink





`(3) COORDINATION WITH SECTION 684- If the expatriation of any individual would result in the recognition of gain under section 684, this section shall be applied after the application of section 684.CommentsClose CommentsPermalink





`(i) Regulations- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.'.CommentsClose CommentsPermalink





(b) Tax on Gifts and Bequests Received by United States Citizens and Residents From Expatriates-CommentsClose CommentsPermalink





(1) IN GENERAL- Subtitle B (relating to estate and gift taxes) is amended by inserting after chapter 14 the following new chapter:CommentsClose CommentsPermalink