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SA 572. Mr. BAUCUS submitted an amendment intended to be proposed to amendment SA 570 proposed by Mr. Reid (for Ms. Collins (for herself and Mr. Nelson of Nebraska)) to the bill H.R. 1, making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for fiscal year ending September 30, 2009, and for other purposes; which was ordered
to lie on the table; as follows:
Beginning on page 421, line 16, strike all through page 422, line 13, and insert the following:
``(d) Definitions and Special Rules.--For purposes of this section--
``(1) ELIGIBLE INDIVIDUAL.--
``(A) IN GENERAL.--The term `eligible individual' means any individual other than--
``(i) any nonresident alien individual,
``(ii) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and
``(iii) an estate or trust.
``(B) IDENTIFICATION REQUIREMENT.--
``(i) IN GENERAL.--Except as provided in clause (ii), such term shall not include any individual unless the requirements of section 32(c)(1)(E) are met with respect to such individual.
``(ii) SPECIAL RULES FOR MARRIED INDIVIDUALS.--In the case of--
``(I) a married individual (within the meaning of section 7703) filing a separate return, the requirements of clause (i) with respect to such return shall not apply to the individual's spouse, and
``(II) clause (i) shall not apply to a joint return where at least 1 spouse was a member of the Armed Forces of the United States at any time during the taxable year.
``(2) EARNED INCOME.--The term `earned income' has the meaning given such term by section 32(c)(2), except that such term shall not include net earnings from self-employment which are not taken into account in computing taxable income. For purposes of the preceding sentence, any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.
``(3) SPECIAL RULE FOR CERTAIN ELIGIBLE INDIVIDUALS.--In the case of any taxable year beginning in 2009, if an eligible individual receives any amount as a pension or annuity for service performed in the employ of the United States or any State, or any instrumentality thereof, which is not considered employment for purposes of chapter 21, the amount of the credit allowed under subsection (a) (determined without regard to subsection (c)) with respect to such eligible individual shall be
equal to the greater of--
``(A) the amount of the credit determined without regard to this paragraph or subsection (c), or
``(B) $300 ($600 in the case of a joint return where both spouses are eligible individuals described in this paragraph).
If the amount of the credit is determined under subparagraph (B) with respect to any eligible individual, the modified adjusted gross income limitation under subsection (b) shall not apply to such credit.
On page 484, strike line 3 and insert the following:
(c) Special Rule for Certain Trees and Vines.--Section 168(k) is amended by adding at the end the following new paragraph:
``(5) SPECIAL RULE FOR CERTAIN TREES AND VINES.--For purposes of this subsection, in the case of any qualified property which is a tree or vine producing fruit, nuts, or other crops, such property shall be treated as placed in service in the year in which it is planted.''.
(d) Effective Dates.--
On page 485, line 21, strike ``(II)'' and insert ``(I)''.
On page 490, line 4, strike ``172(k)'' and insert ``172(b)(1)(H)''.
On page 490, strike lines 15 through 17, and insert the following:
SEC. 1212. ELECTION TO RETROACTIVELY REVOKE S CORPORATION STATUS.
(a) In General.--If an applicable small business corporation elects under this section to revoke its election under section 1362 of the Internal Revenue Code of 1986 to be an S corporation, then, notwithstanding section 1362(d)(1)(C) of such Code and subject to the provisions of this section--
(1) such revocation shall be effective as of the first day of the first taxable year for which such corporation was treated as an S corporation, and
(2) such Code shall be applied and administered for all taxable years in the S corporation period as if such corporation had not been an S corporation.
(b) Effects of Application of Section.--
(1) IN GENERAL.--If a small business corporation elects to have this section apply, the corporation and each person who has been a shareholder of such corporation during the S corporation period--
(A) shall recompute their liability for tax imposed by chapter 1 of the Internal Revenue Code of 1986 for each taxable year in the S corporation period as if the corporation had been a C corporation, and
(B) shall make such adjustments (consistent with the treatment of the corporation as a C corporation) to basis, carryovers of credits and losses, and any other item as may be required by the Secretary with respect to such period.
(2) RESTRICTION ON FUTURE S CORPORATION ELECTIONS.--For purposes of section 1362(g) of such Code, the taxable year in which the election under this section is made shall be treated as the taxable year for which the termination of S corporation status is effective.
(3) CERTAIN ADJUSTMENTS NOT REVERSED.--If an applicable small business company was a C corporation for any taxable year before it became an S corporation, subsection (a)(2) shall not apply to abate any tax imposed (or reverse any other adjustment made) solely by reason of the conversion of the corporation from C corporation status to S corporation status.
(c) Rules Relating to Recomputed Tax Liability.--
(1) WAIVER OF LIMITATIONS.--
(A) IN GENERAL.--Notwithstanding the operation of any law or rule of law (including res judicata), the period of limitations for assessment or collection, or credit or refund, of any tax imposed on any taxpayer by chapter 1 of the Internal Revenue Code of 1986 (including any interest or penalty) for any taxable year in the S corporation period for which a recomputation of tax liability is required under subsection (b)(1) shall not expire before the close of the 3-year period beginning
on the date the election is made under this section.
(B) NET OPERATING LOSSES.--Notwithstanding subparagraph (A), solely for purposes of determining the taxable years from and to which any net operating loss arising in a taxable year in the S corporation period may be carried, section 6511(d)(2) of such Code shall be applied without regard to any extensions, including any extensions under section 6511(c) of such Code.
(2) UNDERPAYMENT OF TAX.--If, for 1 or more taxable years in the S corporation period--
(A) the tax determined under chapter 1 of such Code for such taxable year with respect to any taxpayer, determined after application of this section, exceeds
(B) the tax determined under chapter 1 of such Code for such taxable year with respect to the taxpayer, determined without regard to this section,
the taxpayer shall include with the election to have this section apply payment of such amount, together with interest on such amount (determined using the underpayment rate under section 6621 of such Code for the period beginning on the due date (without regard to extensions) for filing the return of such tax imposed for such taxable year and ending on the date of the election).
(d) Election.--
(1) IN GENERAL.--An election under this section to revoke an applicable small business corporation election under section 1362 of the Internal Revenue Code of 1986--
(A) may only be made during the period beginning on the date of the enactment of this Act and ending on December 31, 2009, and
(B) shall be made in such manner as the Secretary of the Treasury or the Secretary's delegate prescribes.
(2) CONDITIONS.--An election under this section shall not be effective unless the applicable small business corporation and all persons who are, or who have been, shareholders of such corporation during the S corporation period consent to--
(A) such election,
(B) the extension of the period of limitations for assessment and collection under subsection (c)(1)(A), and
(C) the application of rules relating to net operating loss carryovers under subsection (c)(1)(B).
(e) Definitions and Special Rules.--For purposes of this section--
(1) APPLICABLE SMALL BUSINESS CORPORATION.--The term ``applicable small business corporation'' means any small business corporation which--
(A) elected to be an S corporation under section 1362 of the Internal Revenue Code of 1986 at any time during the 5-year period ending on the date of the enactment of this Act, and
(B) had no more than 2 shareholders (determined without regard to any aggregation rules under section 1361(c) of such Code) at all times during such period during which the corporation was an S corporation,
(2) S CORPORATION PERIOD.--The term ``S corporation period'' means, with respect to any applicable small business corporation, the period of taxable years for which the election under section 1362 of such Code to be an S corporation was in effect before the application of this section.
(3) OTHER DEFINITIONS.--The terms ``S corporation'' and ``C corporation'' shall have the same meaning as when used in such Code.
SEC. 1213. EXCEPTION FOR TARP RECIPIENTS.
The provisions of , and amendments made by, this part shall not apply to--
On page 493, beginning with line 13, strike all through page 495, line 11, and insert the following:
PART IV--RULES RELATING TO DEBT INSTRUMENTS
SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING FROM INDEBTEDNESS DISCHARGED BY THE REACQUISITION OF A DEBT INSTRUMENT.
(a) In General.--Section 108 (relating to income from discharge of indebtedness) is amended by adding at the end the following new subsection:
``(i) Deferral and Ratable Inclusion of Income Arising From Indebtedness Discharged by the Reacquisition of a Debt Instrument.--
``(1) IN GENERAL.--At the election of the taxpayer, income from the discharge of indebtedness in connection with the reacquisition of a debt instrument after December 31, 2008, and before January 1, 2011, shall be includible in gross income ratably over the 5-taxable-year period beginning with--
``(A) in the case of a reacquisition occurring in 2009, the fifth taxable year following the taxable year in which the reacquisition occurs, and
``(B) in the case of a reacquisition occurring in 2010, the fourth taxable year following the taxable year in which the reacquisition occurs.
``(2) DEFERRAL OF DEDUCTION FOR ORIGINAL ISSUE DISCOUNT IN DEBT FOR DEBT EXCHANGES.--
``(A) IN GENERAL.--If, as part of a reacquisition to which paragraph (1) applies, any debt instrument is issued for the debt instrument being reacquired (or is treated as so issued under subsection (e)(4) and the regulations thereunder) and there is any original issue discount determined under subpart A of part V of subchapter P of this chapter with respect to the debt instrument so issued--
``(i) except as provided in clause (ii), no deduction otherwise allowable under this chapter shall be allowed to the issuer of such debt instrument with respect to the portion of such original issue discount which--
``(I) accrues before the 1st taxable year in the 5-taxable-year period in which income from the discharge of indebtedness attributable to the reacquisition of the debt instrument is includible under paragraph (1), and
``(II) does not exceed the income from the discharge of indebtedness with respect to the debt instrument being reacquired, and
``(ii) the aggregate amount of deductions disallowed under clause (i) shall be allowed as a deduction ratably over the 5-taxable-year period described in clause (i)(I).
If the amount of the original issue discount accruing before such 1st taxable year exceeds the income from the discharge of indebtedness with respect to the debt instrument being reacquired, the deductions shall be disallowed in the order in which the original issue discount is accrued.
``(B) DEEMED DEBT FOR DEBT EXCHANGES.--For purposes of subparagraph (A), if any debt instrument is issued by an issuer and the proceeds of such debt instrument are used directly or indirectly by the issuer to reacquire a debt instrument of the issuer, the debt instrument so issued shall be treated as issued for the debt instrument being reacquired. If only a portion of the proceeds from a debt instrument are so used, the rules of subparagraph (A) shall apply to the portion of any original
issue discount on the newly issued debt instrument which is equal to the portion of the proceeds from such instrument used to reacquire the outstanding instrument.
``(3) DEBT INSTRUMENT.--For purposes of this subsection, the term `debt instrument' means a bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness (within the meaning of section 1275(a)(1)).
``(4) REACQUISITION.--For purposes of this subsection--
``(A) IN GENERAL.--The term `reacquisition' means, with respect to any debt instrument, any acquisition of the debt instrument by--
``(i) the debtor which issued (or is otherwise the obligor under) the debt instrument, or
``(ii) any person related to such debtor.
Such term shall also include the complete forgiveness of the indebtedness by the holder of the debt instrument.
``(B) ACQUISITION.--The term `acquisition' shall, with respect to any debt instrument, include an acquisition of the debt instrument for cash, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, and the contribution of the debt instrument to capital.
``(5) OTHER DEFINITIONS AND RULES.--For purposes of this subsection--
``(A) RELATED PERSON.--The determination of whether a person is related to another person shall be made in the same manner as under subsection (e)(4).
``(B) ELECTION.--
``(i) IN GENERAL.--An issuer of a debt instrument shall make the election under this subsection with respect to any debt instrument by clearly identifying such debt instrument on the issuer's records as an instrument to which the election applies before the close of the day on which the reacquisition of the debt instrument occurs (or such other time as the Secretary may prescribe). Such election, once made, is irrevocable.
``(ii) PASS THROUGH ENTITIES.--In the case of a partnership, S corporation, or other pass through entity, the election under this subsection shall be made by the partnership, the S corporation, or other entity involved.
``(C) COORDINATION WITH OTHER EXCLUSIONS.--If a taxpayer elects to have this subsection apply to a debt instrument, subparagraphs (A), (B), (C), (D), and (E) of subsection (a)(1) shall not apply to the income from the discharge of such indebtedness for the taxable year of the election or any subsequent taxable year.
``(D) ACCELERATION OF DEFERRED ITEMS.--In the case of the death of the taxpayer, the liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), the cessation of business by the taxpayer, or similar circumstances, any item of income or deduction which is deferred under this subsection (and has not previously been taken into account) shall be taken into account in the taxable year in which such event occurs (or in the case of a title 11
case, the day before the petition is filed).
``(6) AUTHORITY TO PRESCRIBE REGULATIONS.--The Secretary may prescribe such rules and regulations as may be necessary or appropriate for purposes of applying this subsection.''.
(b) Effective Date.--The amendments made by this section shall apply to discharges in taxable years ending after December 31, 2008.
SEC. 1232. MODIFICATIONS OF RULES FOR ORIGINAL ISSUE DISCOUNT ON CERTAIN HIGH YIELD OBLIGATIONS.
(a) Suspension of Special Rules.--Section 163(e)(5) (relating to special rules for original issue discount on certain high yield obligations) is amended by redesignating subparagraph (F) as subparagraph (G) and by inserting after subparagraph (E) the following new subparagraph:
``(F) SUSPENSION OF APPLICATION OF PARAGRAPH.--
``(i) TEMPORARY SUSPENSION.--
``(I) IN GENERAL.--This paragraph shall not apply to any applicable high yield discount obligation issued after August 31, 2008, and before January 1, 2010. The preceding sentence shall not apply to any obligation the interest on which is interest described in section 871(h)(4) (without regard to subparagraph (D) thereof) or to any obligation issued to a related person (within the meaning of section 108(e)(4)).
``(ii) SECRETARIAL AUTHORITY TO SUSPEND APPLICATION.--The Secretary may suspend the application of this paragraph with respect to debt instruments issued after December 31, 2009, if the Secretary determines that such suspension is appropriate in light of distressed conditions in the debt capital markets.''.
(b) Interest Rate Used in Determining High Yield Obligations.--The last sentence of section 163(i)(1) is amended--
(1) by inserting ``(i)'' after ``regulation'', and
(2) by inserting ``, or (ii) permit, on a temporary basis, a rate to be used with respect to any debt instrument which is higher than the applicable Federal rate if the Secretary determines that such rate is appropriate in light of distressed conditions in the debt capital markets'' before the period at the end.
(c) Effective Date.--
(1) SUSPENSION.--The amendments made by subsection (a) shall apply to obligations issued after August 30, 2008, in taxable years ending after such date.
(2) INTEREST RATE AUTHORITY.--The amendments made by subsection (b) shall apply to obligations issued after the date of the enactment of this Act, in taxable years ending after such date.
SEC. 1233. MODIFICATION OF RULES RELATING TO CANCELLATION OF QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) Inclusion of All Mortgage Indebtedness.--Paragraph (2) of section 108(h) is amended by inserting ``and home equity indebtedness (within the meaning of section 163(h)(3)(C), applied by inserting `as of the date such indebtedness was secured by such residence' after `qualified residence' in clause (i)(I) thereof and by substituting `$250,000 ($125,000' for `$100,000 ($50,000' in clause (ii) thereof)'' before ``with respect to the principal residence of the taxpayer''.
(b) Simplification of Rules Relating to Certain Discharges.--Paragraph (3) of section 108(h) is amended--
(1) by striking ``or any other factor'' and all that follows and inserting ``or is in any other way compensation or in lieu of compensation.'', and
(2) by striking ``NOT RELATED TO TAXPAYER'S FINANCIAL CONDITION'' in the heading.
(c) Effective Date.--The amendments made by this section shall apply to discharges of indebtedness made on or after January 1, 2009.
On page 521, between lines 4 and 5, insert the following:
PART X--TREATMENT OF LIMITATIONS ON LOSSES AFTER CERTAIN OWNERSHIP CHANGES
SEC. 1291. TREATMENT OF CERTAIN OWNERSHIP CHANGES FOR PURPOSES OF LIMITATIONS ON NET OPERATING LOSS CARRYFORWARDS AND CERTAIN BUILT-IN LOSSES.
(a) In General.--Section 382 is amended by adding at the end the following new subsection:
``(n) Special Rule for Certain Ownership Changes.--
``(1) IN GENERAL.--The limitation contained in subsection (a) shall not apply in the case of an ownership change which--
``(A) is pursuant to a restructuring plan of a taxpayer required under a loan agreement or a commitment for a line of credit entered into with the Department of the Treasury under the Emergency Economic Stabilization Act of 2008, and
``(B) is intended to result in a rationalization of the costs, capitalization, and capacity with respect to the manufacturing workforce of, and suppliers to, the taxpayer and its subsidiaries.
``(2) SUBSEQUENT ACQUISITIONS.--Paragraph (1) shall not apply in the case of any subsequent ownership change unless such ownership change is described in such paragraph.
``(3) LIMITATION BASED ON CONTROL IN CORPORATION.--
``(A) IN GENERAL.--Paragraph (1) shall not apply in the case of any ownership change if, immediately after such ownership change, any person owns stock of the old loss corporation possessing 50 percent or more of the total combined voting power of all classes of stock entitled to vote, or of the total value of the stock of such corporation.
``(B) TREATMENT OF RELATED PERSONS.--
``(i) IN GENERAL.--Related persons shall be treated as a single person for purposes of this paragraph.
``(ii) RELATED PERSONS.--For purposes of clause (i), a person shall be treated as related to another person if--
``(I) such person bears a relationship to such other person described in section 267(b) or 707(b), or
``(II) such persons are members of a group of persons acting in concert.''.
(b) Effective Date.--The amendment made by this section shall apply to ownership changes after the date of the enactment of this Act.
Beginning on page 555, line 11, strike all through page 556, line 22, and insert the following:
SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT BONDS.
(a) Interest on Private Activity Bonds Issued During 2009 and 2010 Not Treated as Tax Preference Item.--Subparagraph (C) of section 57(a)(5) is amended by adding at the end a new clause:
``(vi) EXCEPTION FOR BONDS ISSUED IN 2009 AND 2010.--
``(I) IN GENERAL.--For purposes of clause (i), the term `private activity bond' shall not include any bond issued after December 31, 2008, and before January 1, 2011.
``(II) TREATMENT OF REFUNDING BONDS.--For purposes of subclause (I), a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).
``(III) EXCEPTION FOR CERTAIN REFUNDING BONDS.--Subclause (II) shall not apply to any refunding bond which is issued to refund any bond which was issued after December 31, 2003, and before January 1, 2009.''.
(b) No Adjustment to Adjusted Current Earnings for Interest on Tax-Exempt Bonds Issued During 2009 and 2010.--Subparagraph (B) of section 56(g)(4) is amended by adding at the end the following new clause:
``(iv) TAX EXEMPT INTEREST ON BONDS ISSUED IN 2009 AND 2010.--
``(I) IN GENERAL.--Clause (i) shall not apply in the case of any interest on a bond issued after December 31, 2008, and before January 1, 2011.
``(II) TREATMENT OF REFUNDING BONDS.--For purposes of subclause (I), a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).
``(III) EXCEPTION FOR CERTAIN REFUNDING BONDS.--Subclause (II) shall not apply to any refunding bond which is issued to refund any bond which was issued after December 31, 2003, and before January 1, 2009.''.
(c) Effective Date.--The amendments made by this section shall apply to obligations issued after December 31, 2008.
On page 587, after line 23, add the following:
SEC. 1904. DETERMINATION OF STANDARD MILEAGE RATE FOR CHARITABLE CONTRIBUTIONS DEDUCTION.
(a) In General.--Subsection (i) of section 170 is amended to read as follows:
``(i) Standard Mileage Rate for Use of Passenger Automobile.--
``(1) IN GENERAL.--For purposes of computing the deduction under this section for use of a passenger automobile, the standard mileage rate shall be 14 cents per mile.
``(2) SPECIAL RULE FOR 2009 AND 2010.--For miles traveled after the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009 and before January 1, 2011, the standard mileage rate shall be the rate determined by the Secretary, which rate shall not be less than the standard mileage rate used for purposes of section 213.''.
(b) Effective Date.--The amendment made by this section shall apply to miles traveled after the date of the enactment of this Act.
SEC. 1905. EXCLUSION FROM GROSS INCOME FOR CHARITABLE MILEAGE REIMBURSEMENTS.
(a) In General.--Part III of subchapter B of chapter 1 is amended by adding at the end the following new section:
``SEC. 139C. CHARITABLE MILEAGE REIMBURSEMENT.
``(a) In General.--In the case of an individual, gross income shall not include amounts received from an organization described in section 170(c)(2) as reimbursement of operating expenses with respect to the use of a passenger automobile for the benefit of such organization.
``(b) Limitation.--The amount excluded from gross income under subsection (a) shall not exceed the product of the standard mileage rate used for purposes of section 162 multiplied by the number of miles traveled for which such reimbursement is made.
``(c) Application to Volunteer Services Only.--Subsection (a) shall not apply with respect to any expenses relating to the performance of services for compensation.
``(d) No Double Benefit.--A taxpayer may not claim a deduction or credit under any other provision of this title with respect to reimbursements excluded from income under subsection (a).
``(e) Exemption From Reporting Requirements.--Section 6041 shall not apply with respect to reimbursements excluded from income under subsection (a).
``(f) Maintenance of Records.--For purposes of this section, no exclusion shall be allowed under subsection (a) for any reimbursement unless with respect to such reimbursement the taxpayer meets substantiation requirements similar to the requirements of section 274(d).
``(g) Termination.--This section shall not apply to any miles traveled after December 31, 2010.''.
(b) Conforming Amendment.--The table of sections for part III of subchapter B of chapter 1 is amended by adding at the end the following new item:
``Sec..139C..Charitable mileage reimbursement.''.
(c) Effective Date.--The amendments made by this section shall apply to miles traveled after the date of the enactment of this Act.
SEC. 1906. SPECIAL RULES FOR MODIFICATION OR DISPOSITION OF QUALIFIED MORTGAGES OR DISPOSITION OF FORECLOSURE PROPERTY BY REAL ESTATE MORTGAGE INVESTMENT CONDUITS.
(a) In General.--If a REMIC (as defined in section 860D(a) of the Internal Revenue Code of 1986) modifies the terms of or disposes of a troubled asset under the Troubled Asset Relief Program established by the Secretary of the Treasury under section 101(a) of the Emergency Economic Stabilization Act of 2008--
(1) such modification or disposition shall not be treated as a prohibited transaction under section 860F(a)(2) of such Code, and
(2) for purposes of part IV of subchapter M of chapter 1 of such Code--
(A) an interest in the REMIC shall not fail to be treated as a regular interest (as defined in section 860G(a)(1) of such Code), nor shall such newly modified loan fail to be treated as a qualified mortgage solely because of such modification or disposition, and
(B) any proceeds resulting from such modification or disposition shall be treated as amounts received under qualified mortgages.
(b) Effective Date.--This section shall apply to modifications and dispositions after the date of the enactment of this Act, in taxable years ending on or after such date.
SEC. 1907. EXTENSION OF REDUCTION IN RATE OF TAX ON QUALIFIED TIMBER GAIN OF CORPORATIONS.
(a) In General.--Section 1201(b)(1) is amended by striking ``1 year after such date'' and inserting ``3 years after such date''.
(b) Conforming Amendment.--Subparagraph (B) of section 1201(b)(3) is amended by striking ``1 year after such date'' and inserting ``3 years after such date''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 1908. EXTENSION OF TIMBER REIT MODERNIZATION AND MODIFICATION OF PROHIBITED TRANSACTION RULES FOR TIMBER PROPERTY.
(a) In General.--Paragraph (8) of section 856(c) is amended--
(1) by striking ``the taxpayer's first taxable year'' and inserting ``the taxpayer's third taxable year'', and
(2) by striking ``1 year after such date'' and inserting ``3 years after such date''.
(b) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 1909. EXTENSION OF QUALIFICATION OF MINERAL ROYALTY INCOME FOR TIMBER REITS.
(a) In General.--Section 856(c)(2)(I) is amended by inserting ``, second, or third'' after ``the first''.
(b) Effective Date.--The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 1910. FORMERLY HOMELESS YOUTH WHO ARE STUDENTS QUALIFIED FOR PURPOSES OF LOW INCOME HOUSING TAX CREDIT.
(a) In General.--Clause (i) of section 42(i)(3)(D) is amended by redesignating subclauses (II) and (III) as subclauses (III) and (IV), respectively, and by inserting after subclause (I) the following new subclause:
``(II) a student who previously was a homeless child or youth (as defined by section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a)),''.
(b) Effective Date.--The amendments made by subsection (a) shall apply to determinations made before, on, or after the date of the enactment of this Act.
SEC. 1911. DECREASED REQUIRED ESTIMATED TAX PAYMENTS IN 2009 FOR CERTAIN SMALL BUSINESSES.
Paragraph (1) of section 6654(d) is amended by adding at the end the following new subparagraph:
``(D) SPECIAL RULE FOR 2009.--
``(i) IN GENERAL.--Notwithstanding subparagraph (C), in the case of any taxable year beginning in 2009, clause (ii) of subparagraph (B) shall be applied to any qualified individual by substituting `90 percent' for `100 percent'.
``(ii) QUALIFIED INDIVIDUAL.--For purposes of this subparagraph, the term `qualified individual' means any individual if--
``(I) the adjusted gross income shown on the return of such individual for the preceding taxable year is less than $500,000, and
``(II) such individual certifies that more than 50 percent of the gross income shown on the return of such individual for the preceding taxable year was income from a small business.
A certification under subclause (II) shall be in such form and manner and filed at such time as the Secretary may by regulations prescribe.
``(iii) INCOME FROM A SMALL BUSINESS.--For purposes of clause (ii), income from a small business means, with respect to any individual, income from a trade or business the average number of employees of which was less than 500 employees for the calendar year ending with or within the preceding taxable year of the individual.
``(iv) SEPARATE RETURNS.--In the case of a married individual (within the meaning of section 7703) who files a separate return for the taxable year for which the amount of the installment is being determined, clause (ii)(I) shall be applied by substituting `$250,000' for `$500,000'.
``(v) ESTATES AND TRUSTS.--In the case of an estate or trust, adjusted gross income shall be determined as provided in section 67(e).''.
SEC. 1912. AVIATION PROGRAMS.
(a) Short Title.--This section may be cited as the ``Federal Aviation Administration Extension Act of 2009''.
(b) Extension of Aviation Programs for Fy 2009.--
(1) EXTENSION OF AVIATION TAXES.--The Internal Revenue Code of 1986 is amended by striking ``March 31, 2009'' and inserting ``September 30, 2009'' each place it appears in each of the following sections:
(A) Section 4081(d)(2)(B).
(B) Section 4261(j)(1)(A)(ii).
(C) Section 4271(d)(1)(A)(ii).
(2) EXTENSION OF EXPENDITURE AUTHORITY.--
(A) Such Code is amended by striking ``April 1, 2009'' each place it appears and inserting ``October 1, 2009'' in each of the following sections:
(i) Section 9502(d)(1).
(ii) Section 9502(e)(2).
(B) Paragraph (1) of section 9502(d) of such Code is amended by inserting ``or the Federal Aviation Administration Extension Act of 2009'' before the semicolon at the end of subparagraph (A).
(3) EXTENSION OF AIRPORT IMPROVEMENT PROGRAM.--
(A) Paragraph (6) of section 48103 of title 49, United States Code, is amended to read as follows:
``(6) $3,900,000,000 for fiscal year 2009.''.
(B) Section 47104(c) of such title is amended by striking ``March 31, 2009,'' and inserting ``September 30, 2009,''.
(4) EXTENSION OF EXPIRING AUTHORITIES.--
(A) Title 49, United States Code, is amended by striking the date specified in each of the following sections and inserting ``September 30, 2009'':
(i) Section 40117(l)(7).
(ii) Section 44303(b).
(iii) Section 47107(s)(3).
(iv) Section 47141(f).
(v) Section 49108.
(B) Section 44302(f)(1) of such title is amended--
(i) by striking ``March 31, 2009'' and inserting ``September 30, 2009''; and
(ii) by striking ``May 31, 2009'' and inserting ``December 31, 2009''.
(C) Section 47115(j) of such title is amended by striking ``2008, and the portion of fiscal year 2009 ending before April 1, 2009,'' and inserting ``2009,''.
(D) Section 161 of the Vision 100--Century of Aviation Reauthorization Act (49 U.S.C. 47109 note) is amended by striking ``before April 1, 2009,''.
(E) Section 186(d) of such Act (117 Stat. 2518) is amended by striking ``2008, and for the portion of fiscal year 2009 ending before April 1, 2009,'' and inserting ``2009,''.
(c) Effective Date.--The amendments made by this section shall take effect on April 1, 2009.
SEC. 1913. ENHANCED CONGRESSIONAL OVERSIGHT.
(a) Plan.--Not later than 30 days after the date of enactment of this Act, each authorizing committee of the Senate with jurisdiction over spending included in this division and division A shall prepare and publicly post on their website a plan detailing--
(1) spending or programmatic language contained in this division and division A which falls under their jurisdiction; and
(2) plans for oversight of spending under the jurisdiction of the committee, including congressional hearings.
(b) Implementation Reports.--Not later than 6 months and 1 year after the date of enactment of his Act, each committee described in subsection (a) shall prepare and post on their website a progress report towards fulfilling components of their oversight plan required by subsection (a) as well as any modifications to that plan.
(c) Joint Economic Committee.--Each Federal department or agency that receives and administers funding under this division and division A shall provide information and data on their implementation of this division and division A to each committee of the Senate with jurisdiction over such funding under this division and division A and to the Committee on Joint Economics.
SEC. 1914. EQUAL CREDIT AVAILABILITY.
Section 44(f) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(f)) is amended by adding at the end the following:
``(3) EQUAL CREDIT AVAILABILITY.--In the case of a person or government entity (other than a depository institution that is subject to paragraph (1) or (2)) in that State, the maximum annual percentage rate of interest shall be the greater of--
``(A) the maximum annual percentage rate allowed by the laws of that State; or
``(B) 17 percent.''.
On page 601, line 6, insert ``, except that such compensation is not required to be paid to an individual who is receiving stipends or other training allowances'' after ``1998''.
On page 601, line 17, insert ``less any deductible income as determined under State law'' after ``year''.
On page 619, line 13, insert ``(or another person pays on behalf of such individual)'' after ``pays''.
On page 692, between lines 7 and 8, insert the following:
(g) Impact on Trust Funds.--The Board of Trustees of the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t) shall include in the annual report submitted in 2010 under subsection (b)(2) of such sections 1817 and 1841 a description of the estimated short-term and long-term impact that the provisions of, and amendments made by, this
subtitle will have on such Trust Funds.
On page 707, between lines 21 and 22, insert the following:
``(D) For purposes of this paragraph, the term `reporting period' means, with respect to a fiscal year, any period (or periods), with respect to the fiscal year, as specified by the Secretary.''.
On page 716, between lines 18 and 19, insert the following:
SEC. 4204A. CHANGE IN DATE OF ANNUAL MEDPAC REPORT.
(a) In General.--Section 1805(b)(1)(C) of the Social Security Act (42 U.S.C. 1395b-6) is amended by striking ``March 1'' and inserting ``March 15''.
(b) Effective Date.--The amendment made by subsection (a) takes effect on April 1, 2009, and applies to reports submitted for 2010 and calendar years thereafter.
On page 726, line 7, insert ``(or to an employer or facility to which such provider has assigned payments)'' after ``such provider''.
On page 737, line 18, insert ``and, for purposes of the application of this section to the District of Columbia, payments under such part shall be deemed to be made on the basis of the FMAP'' after ``et. seq.)''.
On page 738, line 11, insert ``(including as such standards were proposed to be in effect under a State law enacted but not effective as of such date or a State plan amendment or waiver request under title XIX of such Act that was pending approval on such date)'' after ``2008''.
On page 740, strike lines 6 through 12, and insert the following:
(ii) on the basis of a restriction that was directed to be made under State law as in effect on July 1, 2008, and would have been in effect as of such date, but for a delay in the effective date of a waiver under section 1115 of such Act with respect to such restriction.
On page 753, between lines 2 and 3, insert the following:
SEC. 5006. CHIP ALLOTMENT ADJUSTMENTS.
Effective as if included in the enactment of the Children's Health Insurance Program Reauthorization Act of 2009, section 2104(m) of the Social Security Act, as added by section 102 of the Children's Health Insurance Program Reauthorization Act of 2009, is amended--
(1) by redesignating paragraph (7) as paragraph (8); and
(2) by inserting after paragraph (6), the following:
``(7) ADJUSTMENT OF FISCAL YEARS 2009 AND 2010 ALLOTMENTS TO ACCOUNT FOR CHANGES IN PROJECTED SPENDING FOR CERTAIN PREVIOUSLY APPROVED EXPANSION PROGRAMS.--In the case of one of the 50 States or the District of Columbia that has an approved State plan amendment effective January 1, 2006, to provide child health assistance through the provision of benefits under the State plan under title XIX for children from birth through age 5 whose family income does not exceed 200 percent of the poverty
line, the Secretary shall increase the allotments otherwise determined for the State for fiscal years 2009 and 2010 under paragraphs (1) and (2)(A)(i) in order to take into account changes in the projected total Federal payments to the State under this title for such fiscal years that are attributable to the provision of such assistance to such children.''.
(As printed in the Congressional Record for the Senate on Feb 10, 2009.)
to lie on the table; as follows:
Beginning on page 421, line 16, strike all through page 422, line 13, and insert the following:
``(d) Definitions and Special Rules.--For purposes of this section--
``(1) ELIGIBLE INDIVIDUAL.--
``(A) IN GENERAL.--The term `eligible individual' means any individual other than--
``(i) any nonresident alien individual,
``(ii) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and
``(iii) an estate or trust.
``(B) IDENTIFICATION REQUIREMENT.--
``(i) IN GENERAL.--Except as provided in clause (ii), such term shall not include any individual unless the requirements of section 32(c)(1)(E) are met with respect to such individual.
``(ii) SPECIAL RULES FOR MARRIED INDIVIDUALS.--In the case of--
``(I) a married individual (within the meaning of section 7703) filing a separate return, the requirements of clause (i) with respect to such return shall not apply to the individual's spouse, and
``(II) clause (i) shall not apply to a joint return where at least 1 spouse was a member of the Armed Forces of the United States at any time during the taxable year.
``(2) EARNED INCOME.--The term `earned income' has the meaning given such term by section 32(c)(2), except that such term shall not include net earnings from self-employment which are not taken into account in computing taxable income. For purposes of the preceding sentence, any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.
``(3) SPECIAL RULE FOR CERTAIN ELIGIBLE INDIVIDUALS.--In the case of any taxable year beginning in 2009, if an eligible individual receives any amount as a pension or annuity for service performed in the employ of the United States or any State, or any instrumentality thereof, which is not considered employment for purposes of chapter 21, the amount of the credit allowed under subsection (a) (determined without regard to subsection (c)) with respect to such eligible individual shall be
equal to the greater of--
``(A) the amount of the credit determined without regard to this paragraph or subsection (c), or
``(B) $300 ($600 in the case of a joint return where both spouses are eligible individuals described in this paragraph).
If the amount of the credit is determined under subparagraph (B) with respect to any eligible individual, the modified adjusted gross income limitation under subsection (b) shall not apply to such credit.
On page 484, strike line 3 and insert the following:
(c) Special Rule for Certain Trees and Vines.--Section 168(k) is amended by adding at the end the following new paragraph:
``(5) SPECIAL RULE FOR CERTAIN TREES AND VINES.--For purposes of this subsection, in the case of any qualified property which is a tree or vine producing fruit, nuts, or other crops, such property shall be treated as placed in service in the year in which it is planted.''.
(d) Effective Dates.--
On page 485, line 21, strike ``(II)'' and insert ``(I)''.
On page 490, line 4, strike ``172(k)'' and insert ``172(b)(1)(H)''.
On page 490, strike lines 15 through 17, and insert the following:
SEC. 1212. ELECTION TO RETROACTIVELY REVOKE S CORPORATION STATUS.
(a) In General.--If an applicable small business corporation elects under this section to revoke its election under section 1362 of the Internal Revenue Code of 1986 to be an S corporation, then, notwithstanding section 1362(d)(1)(C) of such Code and subject to the provisions of this section--
(1) such revocation shall be effective as of the first day of the first taxable year for which such corporation was treated as an S corporation, and
(2) such Code shall be applied and administered for all taxable years in the S corporation period as if such corporation had not been an S corporation.
(b) Effects of Application of Section.--
(1) IN GENERAL.--If a small business corporation elects to have this section apply, the corporation and each person who has been a shareholder of such corporation during the S corporation period--
(A) shall recompute their liability for tax imposed by chapter 1 of the Internal Revenue Code of 1986 for each taxable year in the S corporation period as if the corporation had been a C corporation, and
(B) shall make such adjustments (consistent with the treatment of the corporation as a C corporation) to basis, carryovers of credits and losses, and any other item as may be required by the Secretary with respect to such period.
(2) RESTRICTION ON FUTURE S CORPORATION ELECTIONS.--For purposes of section 1362(g) of such Code, the taxable year in which the election under this section is made shall be treated as the taxable year for which the termination of S corporation status is effective.
(3) CERTAIN ADJUSTMENTS NOT REVERSED.--If an applicable small business company was a C corporation for any taxable year before it became an S corporation, subsection (a)(2) shall not apply to abate any tax imposed (or reverse any other adjustment made) solely by reason of the conversion of the corporation from C corporation status to S corporation status.
(c) Rules Relating to Recomputed Tax Liability.--
(1) WAIVER OF LIMITATIONS.--
(A) IN GENERAL.--Notwithstanding the operation of any law or rule of law (including res judicata), the period of limitations for assessment or collection, or credit or refund, of any tax imposed on any taxpayer by chapter 1 of the Internal Revenue Code of 1986 (including any interest or penalty) for any taxable year in the S corporation period for which a recomputation of tax liability is required under subsection (b)(1) shall not expire before the close of the 3-year period beginning
on the date the election is made under this section.
(B) NET OPERATING LOSSES.--Notwithstanding subparagraph (A), solely for purposes of determining the taxable years from and to which any net operating loss arising in a taxable year in the S corporation period may be carried, section 6511(d)(2) of such Code shall be applied without regard to any extensions, including any extensions under section 6511(c) of such Code.
(2) UNDERPAYMENT OF TAX.--If, for 1 or more taxable years in the S corporation period--
(A) the tax determined under chapter 1 of such Code for such taxable year with respect to any taxpayer, determined after application of this section, exceeds
(B) the tax determined under chapter 1 of such Code for such taxable year with respect to the taxpayer, determined without regard to this section,
the taxpayer shall include with the election to have this section apply payment of such amount, together with interest on such amount (determined using the underpayment rate under section 6621 of such Code for the period beginning on the due date (without regard to extensions) for filing the return of such tax imposed for such taxable year and ending on the date of the election).
(d) Election.--
(1) IN GENERAL.--An election under this section to revoke an applicable small business corporation election under section 1362 of the Internal Revenue Code of 1986--
(A) may only be made during the period beginning on the date of the enactment of this Act and ending on December 31, 2009, and
(B) shall be made in such manner as the Secretary of the Treasury or the Secretary's delegate prescribes.
(2) CONDITIONS.--An election under this section shall not be effective unless the applicable small business corporation and all persons who are, or who have been, shareholders of such corporation during the S corporation period consent to--
(A) such election,
(B) the extension of the period of limitations for assessment and collection under subsection (c)(1)(A), and
(C) the application of rules relating to net operating loss carryovers under subsection (c)(1)(B).
(e) Definitions and Special Rules.--For purposes of this section--
(1) APPLICABLE SMALL BUSINESS CORPORATION.--The term ``applicable small business corporation'' means any small business corporation which--
(A) elected to be an S corporation under section 1362 of the Internal Revenue Code of 1986 at any time during the 5-year period ending on the date of the enactment of this Act, and
(B) had no more than 2 shareholders (determined without regard to any aggregation rules under section 1361(c) of such Code) at all times during such period during which the corporation was an S corporation,
(2) S CORPORATION PERIOD.--The term ``S corporation period'' means, with respect to any applicable small business corporation, the period of taxable years for which the election under section 1362 of such Code to be an S corporation was in effect before the application of this section.
(3) OTHER DEFINITIONS.--The terms ``S corporation'' and ``C corporation'' shall have the same meaning as when used in such Code.
SEC. 1213. EXCEPTION FOR TARP RECIPIENTS.
The provisions of , and amendments made by, this part shall not apply to--
On page 493, beginning with line 13, strike all through page 495, line 11, and insert the following:
PART IV--RULES RELATING TO DEBT INSTRUMENTS
SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING FROM INDEBTEDNESS DISCHARGED BY THE REACQUISITION OF A DEBT INSTRUMENT.
(a) In General.--Section 108 (relating to income from discharge of indebtedness) is amended by adding at the end the following new subsection:
``(i) Deferral and Ratable Inclusion of Income Arising From Indebtedness Discharged by the Reacquisition of a Debt Instrument.--
``(1) IN GENERAL.--At the election of the taxpayer, income from the discharge of indebtedness in connection with the reacquisition of a debt instrument after December 31, 2008, and before January 1, 2011, shall be includible in gross income ratably over the 5-taxable-year period beginning with--
``(A) in the case of a reacquisition occurring in 2009, the fifth taxable year following the taxable year in which the reacquisition occurs, and
``(B) in the case of a reacquisition occurring in 2010, the fourth taxable year following the taxable year in which the reacquisition occurs.
``(2) DEFERRAL OF DEDUCTION FOR ORIGINAL ISSUE DISCOUNT IN DEBT FOR DEBT EXCHANGES.--
``(A) IN GENERAL.--If, as part of a reacquisition to which paragraph (1) applies, any debt instrument is issued for the debt instrument being reacquired (or is treated as so issued under subsection (e)(4) and the regulations thereunder) and there is any original issue discount determined under subpart A of part V of subchapter P of this chapter with respect to the debt instrument so issued--
``(i) except as provided in clause (ii), no deduction otherwise allowable under this chapter shall be allowed to the issuer of such debt instrument with respect to the portion of such original issue discount which--
``(I) accrues before the 1st taxable year in the 5-taxable-year period in which income from the discharge of indebtedness attributable to the reacquisition of the debt instrument is includible under paragraph (1), and
``(II) does not exceed the income from the discharge of indebtedness with respect to the debt instrument being reacquired, and
``(ii) the aggregate amount of deductions disallowed under clause (i) shall be allowed as a deduction ratably over the 5-taxable-year period described in clause (i)(I).
If the amount of the original issue discount accruing before such 1st taxable year exceeds the income from the discharge of indebtedness with respect to the debt instrument being reacquired, the deductions shall be disallowed in the order in which the original issue discount is accrued.
``(B) DEEMED DEBT FOR DEBT EXCHANGES.--For purposes of subparagraph (A), if any debt instrument is issued by an issuer and the proceeds of such debt instrument are used directly or indirectly by the issuer to reacquire a debt instrument of the issuer, the debt instrument so issued shall be treated as issued for the debt instrument being reacquired. If only a portion of the proceeds from a debt instrument are so used, the rules of subparagraph (A) shall apply to the portion of any original
issue discount on the newly issued debt instrument which is equal to the portion of the proceeds from such instrument used to reacquire the outstanding instrument.
``(3) DEBT INSTRUMENT.--For purposes of this subsection, the term `debt instrument' means a bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness (within the meaning of section 1275(a)(1)).
``(4) REACQUISITION.--For purposes of this subsection--
``(A) IN GENERAL.--The term `reacquisition' means, with respect to any debt instrument, any acquisition of the debt instrument by--
``(i) the debtor which issued (or is otherwise the obligor under) the debt instrument, or
``(ii) any person related to such debtor.
Such term shall also include the complete forgiveness of the indebtedness by the holder of the debt instrument.
``(B) ACQUISITION.--The term `acquisition' shall, with respect to any debt instrument, include an acquisition of the debt instrument for cash, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, and the contribution of the debt instrument to capital.
``(5) OTHER DEFINITIONS AND RULES.--For purposes of this subsection--
``(A) RELATED PERSON.--The determination of whether a person is related to another person shall be made in the same manner as under subsection (e)(4).
``(B) ELECTION.--
``(i) IN GENERAL.--An issuer of a debt instrument shall make the election under this subsection with respect to any debt instrument by clearly identifying such debt instrument on the issuer's records as an instrument to which the election applies before the close of the day on which the reacquisition of the debt instrument occurs (or such other time as the Secretary may prescribe). Such election, once made, is irrevocable.
``(ii) PASS THROUGH ENTITIES.--In the case of a partnership, S corporation, or other pass through entity, the election under this subsection shall be made by the partnership, the S corporation, or other entity involved.
``(C) COORDINATION WITH OTHER EXCLUSIONS.--If a taxpayer elects to have this subsection apply to a debt instrument, subparagraphs (A), (B), (C), (D), and (E) of subsection (a)(1) shall not apply to the income from the discharge of such indebtedness for the taxable year of the election or any subsequent taxable year.
``(D) ACCELERATION OF DEFERRED ITEMS.--In the case of the death of the taxpayer, the liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), the cessation of business by the taxpayer, or similar circumstances, any item of income or deduction which is deferred under this subsection (and has not previously been taken into account) shall be taken into account in the taxable year in which such event occurs (or in the case of a title 11
case, the day before the petition is filed).
``(6) AUTHORITY TO PRESCRIBE REGULATIONS.--The Secretary may prescribe such rules and regulations as may be necessary or appropriate for purposes of applying this subsection.''.
(b) Effective Date.--The amendments made by this section shall apply to discharges in taxable years ending after December 31, 2008.
SEC. 1232. MODIFICATIONS OF RULES FOR ORIGINAL ISSUE DISCOUNT ON CERTAIN HIGH YIELD OBLIGATIONS.
(a) Suspension of Special Rules.--Section 163(e)(5) (relating to special rules for original issue discount on certain high yield obligations) is amended by redesignating subparagraph (F) as subparagraph (G) and by inserting after subparagraph (E) the following new subparagraph:
``(F) SUSPENSION OF APPLICATION OF PARAGRAPH.--
``(i) TEMPORARY SUSPENSION.--
``(I) IN GENERAL.--This paragraph shall not apply to any applicable high yield discount obligation issued after August 31, 2008, and before January 1, 2010. The preceding sentence shall not apply to any obligation the interest on which is interest described in section 871(h)(4) (without regard to subparagraph (D) thereof) or to any obligation issued to a related person (within the meaning of section 108(e)(4)).
``(ii) SECRETARIAL AUTHORITY TO SUSPEND APPLICATION.--The Secretary may suspend the application of this paragraph with respect to debt instruments issued after December 31, 2009, if the Secretary determines that such suspension is appropriate in light of distressed conditions in the debt capital markets.''.
(b) Interest Rate Used in Determining High Yield Obligations.--The last sentence of section 163(i)(1) is amended--
(1) by inserting ``(i)'' after ``regulation'', and
(2) by inserting ``, or (ii) permit, on a temporary basis, a rate to be used with respect to any debt instrument which is higher than the applicable Federal rate if the Secretary determines that such rate is appropriate in light of distressed conditions in the debt capital markets'' before the period at the end.
(c) Effective Date.--
(1) SUSPENSION.--The amendments made by subsection (a) shall apply to obligations issued after August 30, 2008, in taxable years ending after such date.
(2) INTEREST RATE AUTHORITY.--The amendments made by subsection (b) shall apply to obligations issued after the date of the enactment of this Act, in taxable years ending after such date.
SEC. 1233. MODIFICATION OF RULES RELATING TO CANCELLATION OF QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) Inclusion of All Mortgage Indebtedness.--Paragraph (2) of section 108(h) is amended by inserting ``and home equity indebtedness (within the meaning of section 163(h)(3)(C), applied by inserting `as of the date such indebtedness was secured by such residence' after `qualified residence' in clause (i)(I) thereof and by substituting `$250,000 ($125,000' for `$100,000 ($50,000' in clause (ii) thereof)'' before ``with respect to the principal residence of the taxpayer''.
(b) Simplification of Rules Relating to Certain Discharges.--Paragraph (3) of section 108(h) is amended--
(1) by striking ``or any other factor'' and all that follows and inserting ``or is in any other way compensation or in lieu of compensation.'', and
(2) by striking ``NOT RELATED TO TAXPAYER'S FINANCIAL CONDITION'' in the heading.
(c) Effective Date.--The amendments made by this section shall apply to discharges of indebtedness made on or after January 1, 2009.
On page 521, between lines 4 and 5, insert the following:
PART X--TREATMENT OF LIMITATIONS ON LOSSES AFTER CERTAIN OWNERSHIP CHANGES
SEC. 1291. TREATMENT OF CERTAIN OWNERSHIP CHANGES FOR PURPOSES OF LIMITATIONS ON NET OPERATING LOSS CARRYFORWARDS AND CERTAIN BUILT-IN LOSSES.
(a) In General.--Section 382 is amended by adding at the end the following new subsection:
``(n) Special Rule for Certain Ownership Changes.--
``(1) IN GENERAL.--The limitation contained in subsection (a) shall not apply in the case of an ownership change which--
``(A) is pursuant to a restructuring plan of a taxpayer required under a loan agreement or a commitment for a line of credit entered into with the Department of the Treasury under the Emergency Economic Stabilization Act of 2008, and
``(B) is intended to result in a rationalization of the costs, capitalization, and capacity with respect to the manufacturing workforce of, and suppliers to, the taxpayer and its subsidiaries.
``(2) SUBSEQUENT ACQUISITIONS.--Paragraph (1) shall not apply in the case of any subsequent ownership change unless such ownership change is described in such paragraph.
``(3) LIMITATION BASED ON CONTROL IN CORPORATION.--
``(A) IN GENERAL.--Paragraph (1) shall not apply in the case of any ownership change if, immediately after such ownership change, any person owns stock of the old loss corporation possessing 50 percent or more of the total combined voting power of all classes of stock entitled to vote, or of the total value of the stock of such corporation.
``(B) TREATMENT OF RELATED PERSONS.--
``(i) IN GENERAL.--Related persons shall be treated as a single person for purposes of this paragraph.
``(ii) RELATED PERSONS.--For purposes of clause (i), a person shall be treated as related to another person if--
``(I) such person bears a relationship to such other person described in section 267(b) or 707(b), or
``(II) such persons are members of a group of persons acting in concert.''.
(b) Effective Date.--The amendment made by this section shall apply to ownership changes after the date of the enactment of this Act.
Beginning on page 555, line 11, strike all through page 556, line 22, and insert the following:
SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT BONDS.
(a) Interest on Private Activity Bonds Issued During 2009 and 2010 Not Treated as Tax Preference Item.--Subparagraph (C) of section 57(a)(5) is amended by adding at the end a new clause:
``(vi) EXCEPTION FOR BONDS ISSUED IN 2009 AND 2010.--
``(I) IN GENERAL.--For purposes of clause (i), the term `private activity bond' shall not include any bond issued after December 31, 2008, and before January 1, 2011.
``(II) TREATMENT OF REFUNDING BONDS.--For purposes of subclause (I), a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).
``(III) EXCEPTION FOR CERTAIN REFUNDING BONDS.--Subclause (II) shall not apply to any refunding bond which is issued to refund any bond which was issued after December 31, 2003, and before January 1, 2009.''.
(b) No Adjustment to Adjusted Current Earnings for Interest on Tax-Exempt Bonds Issued During 2009 and 2010.--Subparagraph (B) of section 56(g)(4) is amended by adding at the end the following new clause:
``(iv) TAX EXEMPT INTEREST ON BONDS ISSUED IN 2009 AND 2010.--
``(I) IN GENERAL.--Clause (i) shall not apply in the case of any interest on a bond issued after December 31, 2008, and before January 1, 2011.
``(II) TREATMENT OF REFUNDING BONDS.--For purposes of subclause (I), a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).
``(III) EXCEPTION FOR CERTAIN REFUNDING BONDS.--Subclause (II) shall not apply to any refunding bond which is issued to refund any bond which was issued after December 31, 2003, and before January 1, 2009.''.
(c) Effective Date.--The amendments made by this section shall apply to obligations issued after December 31, 2008.
On page 587, after line 23, add the following:
SEC. 1904. DETERMINATION OF STANDARD MILEAGE RATE FOR CHARITABLE CONTRIBUTIONS DEDUCTION.
(a) In General.--Subsection (i) of section 170 is amended to read as follows:
``(i) Standard Mileage Rate for Use of Passenger Automobile.--
``(1) IN GENERAL.--For purposes of computing the deduction under this section for use of a passenger automobile, the standard mileage rate shall be 14 cents per mile.
``(2) SPECIAL RULE FOR 2009 AND 2010.--For miles traveled after the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009 and before January 1, 2011, the standard mileage rate shall be the rate determined by the Secretary, which rate shall not be less than the standard mileage rate used for purposes of section 213.''.
(b) Effective Date.--The amendment made by this section shall apply to miles traveled after the date of the enactment of this Act.
SEC. 1905. EXCLUSION FROM GROSS INCOME FOR CHARITABLE MILEAGE REIMBURSEMENTS.
(a) In General.--Part III of subchapter B of chapter 1 is amended by adding at the end the following new section:
``SEC. 139C. CHARITABLE MILEAGE REIMBURSEMENT.
``(a) In General.--In the case of an individual, gross income shall not include amounts received from an organization described in section 170(c)(2) as reimbursement of operating expenses with respect to the use of a passenger automobile for the benefit of such organization.
``(b) Limitation.--The amount excluded from gross income under subsection (a) shall not exceed the product of the standard mileage rate used for purposes of section 162 multiplied by the number of miles traveled for which such reimbursement is made.
``(c) Application to Volunteer Services Only.--Subsection (a) shall not apply with respect to any expenses relating to the performance of services for compensation.
``(d) No Double Benefit.--A taxpayer may not claim a deduction or credit under any other provision of this title with respect to reimbursements excluded from income under subsection (a).
``(e) Exemption From Reporting Requirements.--Section 6041 shall not apply with respect to reimbursements excluded from income under subsection (a).
``(f) Maintenance of Records.--For purposes of this section, no exclusion shall be allowed under subsection (a) for any reimbursement unless with respect to such reimbursement the taxpayer meets substantiation requirements similar to the requirements of section 274(d).
``(g) Termination.--This section shall not apply to any miles traveled after December 31, 2010.''.
(b) Conforming Amendment.--The table of sections for part III of subchapter B of chapter 1 is amended by adding at the end the following new item:
``Sec..139C..Charitable mileage reimbursement.''.
(c) Effective Date.--The amendments made by this section shall apply to miles traveled after the date of the enactment of this Act.
SEC. 1906. SPECIAL RULES FOR MODIFICATION OR DISPOSITION OF QUALIFIED MORTGAGES OR DISPOSITION OF FORECLOSURE PROPERTY BY REAL ESTATE MORTGAGE INVESTMENT CONDUITS.
(a) In General.--If a REMIC (as defined in section 860D(a) of the Internal Revenue Code of 1986) modifies the terms of or disposes of a troubled asset under the Troubled Asset Relief Program established by the Secretary of the Treasury under section 101(a) of the Emergency Economic Stabilization Act of 2008--
(1) such modification or disposition shall not be treated as a prohibited transaction under section 860F(a)(2) of such Code, and
(2) for purposes of part IV of subchapter M of chapter 1 of such Code--
(A) an interest in the REMIC shall not fail to be treated as a regular interest (as defined in section 860G(a)(1) of such Code), nor shall such newly modified loan fail to be treated as a qualified mortgage solely because of such modification or disposition, and
(B) any proceeds resulting from such modification or disposition shall be treated as amounts received under qualified mortgages.
(b) Effective Date.--This section shall apply to modifications and dispositions after the date of the enactment of this Act, in taxable years ending on or after such date.
SEC. 1907. EXTENSION OF REDUCTION IN RATE OF TAX ON QUALIFIED TIMBER GAIN OF CORPORATIONS.
(a) In General.--Section 1201(b)(1) is amended by striking ``1 year after such date'' and inserting ``3 years after such date''.
(b) Conforming Amendment.--Subparagraph (B) of section 1201(b)(3) is amended by striking ``1 year after such date'' and inserting ``3 years after such date''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 1908. EXTENSION OF TIMBER REIT MODERNIZATION AND MODIFICATION OF PROHIBITED TRANSACTION RULES FOR TIMBER PROPERTY.
(a) In General.--Paragraph (8) of section 856(c) is amended--
(1) by striking ``the taxpayer's first taxable year'' and inserting ``the taxpayer's third taxable year'', and
(2) by striking ``1 year after such date'' and inserting ``3 years after such date''.
(b) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 1909. EXTENSION OF QUALIFICATION OF MINERAL ROYALTY INCOME FOR TIMBER REITS.
(a) In General.--Section 856(c)(2)(I) is amended by inserting ``, second, or third'' after ``the first''.
(b) Effective Date.--The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 1910. FORMERLY HOMELESS YOUTH WHO ARE STUDENTS QUALIFIED FOR PURPOSES OF LOW INCOME HOUSING TAX CREDIT.
(a) In General.--Clause (i) of section 42(i)(3)(D) is amended by redesignating subclauses (II) and (III) as subclauses (III) and (IV), respectively, and by inserting after subclause (I) the following new subclause:
``(II) a student who previously was a homeless child or youth (as defined by section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a)),''.
(b) Effective Date.--The amendments made by subsection (a) shall apply to determinations made before, on, or after the date of the enactment of this Act.
SEC. 1911. DECREASED REQUIRED ESTIMATED TAX PAYMENTS IN 2009 FOR CERTAIN SMALL BUSINESSES.
Paragraph (1) of section 6654(d) is amended by adding at the end the following new subparagraph:
``(D) SPECIAL RULE FOR 2009.--
``(i) IN GENERAL.--Notwithstanding subparagraph (C), in the case of any taxable year beginning in 2009, clause (ii) of subparagraph (B) shall be applied to any qualified individual by substituting `90 percent' for `100 percent'.
``(ii) QUALIFIED INDIVIDUAL.--For purposes of this subparagraph, the term `qualified individual' means any individual if--
``(I) the adjusted gross income shown on the return of such individual for the preceding taxable year is less than $500,000, and
``(II) such individual certifies that more than 50 percent of the gross income shown on the return of such individual for the preceding taxable year was income from a small business.
A certification under subclause (II) shall be in such form and manner and filed at such time as the Secretary may by regulations prescribe.
``(iii) INCOME FROM A SMALL BUSINESS.--For purposes of clause (ii), income from a small business means, with respect to any individual, income from a trade or business the average number of employees of which was less than 500 employees for the calendar year ending with or within the preceding taxable year of the individual.
``(iv) SEPARATE RETURNS.--In the case of a married individual (within the meaning of section 7703) who files a separate return for the taxable year for which the amount of the installment is being determined, clause (ii)(I) shall be applied by substituting `$250,000' for `$500,000'.
``(v) ESTATES AND TRUSTS.--In the case of an estate or trust, adjusted gross income shall be determined as provided in section 67(e).''.
SEC. 1912. AVIATION PROGRAMS.
(a) Short Title.--This section may be cited as the ``Federal Aviation Administration Extension Act of 2009''.
(b) Extension of Aviation Programs for Fy 2009.--
(1) EXTENSION OF AVIATION TAXES.--The Internal Revenue Code of 1986 is amended by striking ``March 31, 2009'' and inserting ``September 30, 2009'' each place it appears in each of the following sections:
(A) Section 4081(d)(2)(B).
(B) Section 4261(j)(1)(A)(ii).
(C) Section 4271(d)(1)(A)(ii).
(2) EXTENSION OF EXPENDITURE AUTHORITY.--
(A) Such Code is amended by striking ``April 1, 2009'' each place it appears and inserting ``October 1, 2009'' in each of the following sections:
(i) Section 9502(d)(1).
(ii) Section 9502(e)(2).
(B) Paragraph (1) of section 9502(d) of such Code is amended by inserting ``or the Federal Aviation Administration Extension Act of 2009'' before the semicolon at the end of subparagraph (A).
(3) EXTENSION OF AIRPORT IMPROVEMENT PROGRAM.--
(A) Paragraph (6) of section 48103 of title 49, United States Code, is amended to read as follows:
``(6) $3,900,000,000 for fiscal year 2009.''.
(B) Section 47104(c) of such title is amended by striking ``March 31, 2009,'' and inserting ``September 30, 2009,''.
(4) EXTENSION OF EXPIRING AUTHORITIES.--
(A) Title 49, United States Code, is amended by striking the date specified in each of the following sections and inserting ``September 30, 2009'':
(i) Section 40117(l)(7).
(ii) Section 44303(b).
(iii) Section 47107(s)(3).
(iv) Section 47141(f).
(v) Section 49108.
(B) Section 44302(f)(1) of such title is amended--
(i) by striking ``March 31, 2009'' and inserting ``September 30, 2009''; and
(ii) by striking ``May 31, 2009'' and inserting ``December 31, 2009''.
(C) Section 47115(j) of such title is amended by striking ``2008, and the portion of fiscal year 2009 ending before April 1, 2009,'' and inserting ``2009,''.
(D) Section 161 of the Vision 100--Century of Aviation Reauthorization Act (49 U.S.C. 47109 note) is amended by striking ``before April 1, 2009,''.
(E) Section 186(d) of such Act (117 Stat. 2518) is amended by striking ``2008, and for the portion of fiscal year 2009 ending before April 1, 2009,'' and inserting ``2009,''.
(c) Effective Date.--The amendments made by this section shall take effect on April 1, 2009.
SEC. 1913. ENHANCED CONGRESSIONAL OVERSIGHT.
(a) Plan.--Not later than 30 days after the date of enactment of this Act, each authorizing committee of the Senate with jurisdiction over spending included in this division and division A shall prepare and publicly post on their website a plan detailing--
(1) spending or programmatic language contained in this division and division A which falls under their jurisdiction; and
(2) plans for oversight of spending under the jurisdiction of the committee, including congressional hearings.
(b) Implementation Reports.--Not later than 6 months and 1 year after the date of enactment of his Act, each committee described in subsection (a) shall prepare and post on their website a progress report towards fulfilling components of their oversight plan required by subsection (a) as well as any modifications to that plan.
(c) Joint Economic Committee.--Each Federal department or agency that receives and administers funding under this division and division A shall provide information and data on their implementation of this division and division A to each committee of the Senate with jurisdiction over such funding under this division and division A and to the Committee on Joint Economics.
SEC. 1914. EQUAL CREDIT AVAILABILITY.
Section 44(f) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(f)) is amended by adding at the end the following:
``(3) EQUAL CREDIT AVAILABILITY.--In the case of a person or government entity (other than a depository institution that is subject to paragraph (1) or (2)) in that State, the maximum annual percentage rate of interest shall be the greater of--
``(A) the maximum annual percentage rate allowed by the laws of that State; or
``(B) 17 percent.''.
On page 601, line 6, insert ``, except that such compensation is not required to be paid to an individual who is receiving stipends or other training allowances'' after ``1998''.
On page 601, line 17, insert ``less any deductible income as determined under State law'' after ``year''.
On page 619, line 13, insert ``(or another person pays on behalf of such individual)'' after ``pays''.
On page 692, between lines 7 and 8, insert the following:
(g) Impact on Trust Funds.--The Board of Trustees of the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t) shall include in the annual report submitted in 2010 under subsection (b)(2) of such sections 1817 and 1841 a description of the estimated short-term and long-term impact that the provisions of, and amendments made by, this
subtitle will have on such Trust Funds.
On page 707, between lines 21 and 22, insert the following:
``(D) For purposes of this paragraph, the term `reporting period' means, with respect to a fiscal year, any period (or periods), with respect to the fiscal year, as specified by the Secretary.''.
On page 716, between lines 18 and 19, insert the following:
SEC. 4204A. CHANGE IN DATE OF ANNUAL MEDPAC REPORT.
(a) In General.--Section 1805(b)(1)(C) of the Social Security Act (42 U.S.C. 1395b-6) is amended by striking ``March 1'' and inserting ``March 15''.
(b) Effective Date.--The amendment made by subsection (a) takes effect on April 1, 2009, and applies to reports submitted for 2010 and calendar years thereafter.
On page 726, line 7, insert ``(or to an employer or facility to which such provider has assigned payments)'' after ``such provider''.
On page 737, line 18, insert ``and, for purposes of the application of this section to the District of Columbia, payments under such part shall be deemed to be made on the basis of the FMAP'' after ``et. seq.)''.
On page 738, line 11, insert ``(including as such standards were proposed to be in effect under a State law enacted but not effective as of such date or a State plan amendment or waiver request under title XIX of such Act that was pending approval on such date)'' after ``2008''.
On page 740, strike lines 6 through 12, and insert the following:
(ii) on the basis of a restriction that was directed to be made under State law as in effect on July 1, 2008, and would have been in effect as of such date, but for a delay in the effective date of a waiver under section 1115 of such Act with respect to such restriction.
On page 753, between lines 2 and 3, insert the following:
SEC. 5006. CHIP ALLOTMENT ADJUSTMENTS.
Effective as if included in the enactment of the Children's Health Insurance Program Reauthorization Act of 2009, section 2104(m) of the Social Security Act, as added by section 102 of the Children's Health Insurance Program Reauthorization Act of 2009, is amended--
(1) by redesignating paragraph (7) as paragraph (8); and
(2) by inserting after paragraph (6), the following:
``(7) ADJUSTMENT OF FISCAL YEARS 2009 AND 2010 ALLOTMENTS TO ACCOUNT FOR CHANGES IN PROJECTED SPENDING FOR CERTAIN PREVIOUSLY APPROVED EXPANSION PROGRAMS.--In the case of one of the 50 States or the District of Columbia that has an approved State plan amendment effective January 1, 2006, to provide child health assistance through the provision of benefits under the State plan under title XIX for children from birth through age 5 whose family income does not exceed 200 percent of the poverty
line, the Secretary shall increase the allotments otherwise determined for the State for fiscal years 2009 and 2010 under paragraphs (1) and (2)(A)(i) in order to take into account changes in the projected total Federal payments to the State under this title for such fiscal years that are attributable to the provision of such assistance to such children.''.
(As printed in the Congressional Record for the Senate on Feb 10, 2009.)
