HR 6152 - Family Relief and Economic Stimulus Act

HR 6152

110th CONGRESS
2d Session

H. R. 6152

To stimulate the economy of the United States and provide financial relief to low-income families in the United States.

IN THE HOUSE OF REPRESENTATIVES

May 22, 2008

Mr. ENGLISH of Pennsylvania (for himself and Mr. GERLACH) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To stimulate the economy of the United States and provide financial relief to low-income families in the United States.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Family Relief and Economic Stimulus Act'.

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

Sec. 1. Short title; table of contents.

TITLE I--EMERGENCY UNEMPLOYMENT COMPENSATION

Sec. 101. Federal-State agreements.

Sec. 102. Emergency unemployment compensation account.

Sec. 103. Payments to States having agreements for the payment of emergency unemployment compensation.

Sec. 104. Financing provisions.

Sec. 105. Fraud and overpayments.

Sec. 106. Definitions.

Sec. 107. Applicability.

TITLE II--TAX PROVISIONS

Subtitle A--Penalty-Free IRA Distributions

Sec. 201. Penalty-free distributions from IRAs to avoid foreclosure on principal residence.

Sec. 202. Penalty-free distributions from IRAs for expenses during extended unemployment.

Subtitle B--Homeland Investment

Sec. 211. Allowance of deduction for dividends received from controlled foreign corporations for additional year.

Subtitle C--Suspension of Highway Fuels Taxes When Summer Blending in Effect

Sec. 221. Suspension of highway fuels taxes when summer blending in effect.

Subtitle D--Indexing for Capital Gains

Sec. 231. Indexing of certain assets for purposes of determining gain or loss.

TITLE III--EMERGENCY ASSISTANCE FOR REDEVELOPMENT OF ABANDONED AND FORECLOSED HOMES AND FOR WEATHERIZATION OF HOMES OF LOW-INCOME FAMILIES

Sec. 301. Direct appropriations.

Sec. 302. Allocation of appropriated amounts.

Sec. 303. Use of funds.

Sec. 304. Limitations.

Sec. 305. Rules of construction.

Sec. 306. Authority to specify alternative requirements.

Sec. 307. Periodic audits.

TITLE I--EMERGENCY UNEMPLOYMENT COMPENSATION

SEC. 101. FEDERAL-STATE AGREEMENTS.

(a) In General- Any State which desires to do so may enter into and participate in an agreement under this title with the Secretary of Labor (in this title referred to as the `Secretary'). Any State which is a party to an agreement under this title may, upon providing 30 days' written notice to the Secretary, terminate such agreement.

(b) Provisions of Agreement- Any agreement under subsection (a) shall provide that the State agency of the State will make payments of emergency unemployment compensation to individuals who--

(1) have exhausted all rights to regular compensation under the State law or under Federal law with respect to a benefit year (excluding any benefit year that ended before May 1, 2007);

(2) have no rights to regular compensation or extended compensation with respect to a week under such law or any other State unemployment compensation law or to compensation under any other Federal law (except as provided under subsection (e)); and

(3) are not receiving compensation with respect to such week under the unemployment compensation law of Canada.

(c) Exhaustion of Benefits- For purposes of subsection (b)(1), an individual shall be deemed to have exhausted such individual's rights to regular compensation under a State law when--

(1) no payments of regular compensation can be made under such law because such individual has received all regular compensation available to such individual based on employment or wages during such individual's base period; or

(2) such individual's rights to such compensation have been terminated by reason of the expiration of the benefit year with respect to which such rights existed.

(d) Weekly Benefit Amount, etc- For purposes of any agreement under this title--

(1) the amount of emergency unemployment compensation which shall be payable to any individual for any week of total unemployment shall be equal to the amount of the regular compensation (including dependents' allowances) payable to such individual during such individual's benefit year under the State law for a week of total unemployment;

(2) the terms and conditions of the State law which apply to claims for regular compensation and to the payment thereof shall apply to claims for emergency unemployment compensation and the payment thereof, except where otherwise inconsistent with the provisions of this title or with the regulations or operating instructions of the Secretary promulgated to carry out this title; and

(3) the maximum amount of emergency unemployment compensation payable to any individual for whom an emergency unemployment compensation account is established under section 102 shall not exceed the amount established in such account for such individual.

(e) Election by States- Notwithstanding any other provision of Federal law (and if State law permits), the Governor of a State that is in an extended benefit period may provide for the payment of emergency unemployment compensation prior to extended compensation to individuals who otherwise meet the requirements of this section.

SEC. 102. EMERGENCY UNEMPLOYMENT COMPENSATION ACCOUNT.

(a) In General- Any agreement under this title shall provide that the State will establish, for each eligible individual who files an application for emergency unemployment compensation, an emergency unemployment compensation account with respect to such individual's benefit year.

(b) Amount in Account-

(1) IN GENERAL- The amount established in an account under subsection (a) shall be equal to the lesser of--

(A) 50 percent of the total amount of regular compensation (including dependents' allowances) payable to the individual during the individual's benefit year under such law, or

(B) 13 times the individual's average weekly benefit amount for the benefit year.

(2) WEEKLY BENEFIT AMOUNT- For purposes of this subsection, an individual's weekly benefit amount for any week is the amount of regular compensation (including dependents' allowances) under the State law payable to such individual for such week for total unemployment.

(1) IN GENERAL- Notwithstanding any other provision of this section, if, at the time that the individual's account is exhausted or at any time thereafter, such individual's State is in an extended benefit period (as determined under paragraph (2)), then, such account shall be augmented by an amount equal to the amount originally established in such account (as determined under subsection (b)(1)).

(2) EXTENDED BENEFIT PERIOD- For purposes of paragraph (1), a State shall be considered to be in an extended benefit period, as of any given time, if--

(A) such a period is then in effect for such State under the Federal-State Extended Unemployment Compensation Act of 1970;

(B) such a period would then be in effect for such State under such Act if section 203(d) of such Act--

(i) were applied by substituting `4' for `5' each place it appears; and

(ii) did not include the requirement under paragraph (1)(A); or

(i) section 203(f) of such Act were applied to such State (regardless of whether the State by law had provided for such application); and

(ii) such section 203(f)--

(I) were applied by substituting `6.0' for `6.5' in paragraph (1)(A)(i); and

(II) did not include the requirement under paragraph (1)(A)(ii).

SEC. 103. PAYMENTS TO STATES HAVING AGREEMENTS FOR THE PAYMENT OF EMERGENCY UNEMPLOYMENT COMPENSATION.

(a) General Rule- There shall be paid to each State that has entered into an agreement under this title an amount equal to 100 percent of the emergency unemployment compensation paid to individuals by the State pursuant to such agreement.

(b) Treatment of Reimbursable Compensation- No payment shall be made to any State under this section in respect of any compensation to the extent the State is entitled to reimbursement in respect of such compensation under the provisions of any Federal law other than this title or chapter 85 of title 5, United States Code. A State shall not be entitled to any reimbursement under such chapter 85 in respect of any compensation to the extent the State is entitled to reimbursement under this title in respect of such compensation.

(c) Determination of Amount- Sums payable to any State by reason of such State having an agreement under this title shall be payable, either in advance or by way of reimbursement (as may be determined by the Secretary), in such amounts as the Secretary estimates the State will be entitled to receive under this title for each calendar month, reduced or increased, as the case may be, by any amount by which the Secretary finds that the Secretary's estimates for any prior calendar month were greater or less than the amounts which should have been paid to the State. Such estimates may be made on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency of the State involved.

SEC. 104. FINANCING PROVISIONS.

(a) In General- Funds in the extended unemployment compensation account (as established by section 905(a) of the Social Security Act (42 U.S.C. 1105(a)) of the Unemployment Trust Fund (as established by section 904(a) of such Act (42 U.S.C. 1104(a)) shall be used for the making of payments to States having agreements entered into under this title.

(b) Certification- The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each State the sums payable to such State under this title. The Secretary of the Treasury, prior to audit or settlement by the Government Accountability Office, shall make payments to the State in accordance with such certification, by transfers from the extended unemployment compensation account (as so established) to the account of such State in the Unemployment Trust Fund (as so established).

(c) Assistance to States- There are appropriated out of the employment security administration account (as established by section 901(a) of the Social Security Act (42 U.S.C. 1101(a)) of the Unemployment Trust Fund, without fiscal year limitation, such funds as may be necessary for purposes of assisting States (as provided in title III of the Social Security Act (42 U.S.C. 501 et seq.)) in meeting the costs of administration of agreements under this title.

(d) Appropriations for Certain Payments- There are appropriated from the general fund of the Treasury, without fiscal year limitation, to the extended unemployment compensation account (as so established) of the Unemployment Trust Fund (as so established) such sums as the Secretary estimates to be necessary to make the payments under this section in respect of--

(1) compensation payable under chapter 85 of title 5, United States Code; and

(2) compensation payable on the basis of services to which section 3309(a)(1) of the Internal Revenue Code of 1986 applies.

Amounts appropriated pursuant to the preceding sentence shall not be required to be repaid.

SEC. 105. FRAUD AND OVERPAYMENTS.

(a) In General- If an individual knowingly has made, or caused to be made by another, a false statement or representation of a material fact, or knowingly has failed, or caused another to fail, to disclose a material fact, and as a result of such false statement or representation or of such nondisclosure such individual has received an amount of emergency unemployment compensation under this title to which he was not entitled, such individual--

(1) shall be ineligible for further emergency unemployment compensation under this title in accordance with the provisions of the applicable State unemployment compensation law relating to fraud in connection with a claim for unemployment compensation; and

(2) shall be subject to prosecution under section 1001 of title 18, United States Code.

(b) Repayment- In the case of individuals who have received amounts of emergency unemployment compensation under this title to which they were not entitled, the State shall require such individuals to repay the amounts of such emergency unemployment compensation to the State agency, except that the State agency may waive such repayment if it determines that--

(1) the payment of such emergency unemployment compensation was without fault on the part of any such individual; and

(2) such repayment would be contrary to equity and good conscience.

(1) IN GENERAL- The State agency may recover the amount to be repaid, or any part thereof, by deductions from any emergency unemployment compensation payable to such individual under this title or from any unemployment compensation payable to such individual under any State or Federal unemployment compensation law administered by the State agency or under any other Federal law administered by the State agency which provides for the payment of any assistance or allowance with respect to any week of unemployment, during the 3-year period after the date such individuals received the payment of the emergency unemployment compensation to which they were not entitled, except that no single deduction may exceed 50 percent of the weekly benefit amount from which such deduction is made.

(2) OPPORTUNITY FOR HEARING- No repayment shall be required, and no deduction shall be made, until a determination has been made, notice thereof and an opportunity for a fair hearing has been given to the individual, and the determination has become final.

(d) Review- Any determination by a State agency under this section shall be subject to review in the same manner and to the same extent as determinations under the State unemployment compensation law, and only in that manner and to that extent.

SEC. 106. DEFINITIONS.

In this title, the terms `compensation', `regular compensation', `extended compensation', `additional compensation', `benefit year', `base period', `State', `State agency', `State law', and `week' have the respective meanings given such terms under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

SEC. 107. APPLICABILITY.

(a) In General- Except as provided in subsection (b), an agreement entered into under this title shall apply to weeks of unemployment--

(1) beginning after the date on which such agreement is entered into; and

(2) ending on or before February 1, 2009.

(b) Transition for Amount Remaining in Account-

(1) IN GENERAL- Subject to paragraphs (2) and (3), in the case of an individual who has amounts remaining in an account established under section 102 as of the last day of the last week (as determined in accordance with the applicable State law) ending on or before February 1, 2009, emergency unemployment compensation shall continue to be payable to such individual from such amounts for any week beginning after such last day for which the individual meets the eligibility requirements of this title.

(2) LIMIT ON AUGMENTATION- If the account of an individual is exhausted after the last day of such last week (as so determined), then section 102(c) shall not apply and such account shall not be augmented under such section, regardless of whether such individual's State is in an extended benefit period (as determined under paragraph (2) of such section).

(3) LIMIT ON COMPENSATION- No compensation shall be payable by reason of paragraph (1) for any week beginning after April 30, 2009.

TITLE II--TAX PROVISIONS

Subtitle A--Penalty-Free IRA Distributions

SEC. 201. PENALTY-FREE DISTRIBUTIONS FROM IRAS TO AVOID FORECLOSURE ON PRINCIPAL RESIDENCE.

(a) In General- Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 (relating to subsection not to apply to certain distributions) is amended by adding at the end the following new subparagraph:

`(H) QUALIFIED FORECLOSURE DISTRIBUTIONS- Distributions from an individual retirement plan to an individual which are qualified foreclosure distributions (as defined in paragraph (11)). Distributions shall not be taken into account under the preceding sentence if such distributions are described in subparagraph (A), (C), (D), (E), (F), or (G) or to the extent paragraph (1) does not apply to such distributions by reason of subparagraph (B).'.

(b) Qualified Foreclosure Distributions- Subsection (t) of section 72 of such Code (relating to 10-percent additional tax on early distributions from qualified retirement plans) is amended by adding at the end the following new paragraph:

`(11) QUALIFIED FORECLOSURE DISTRIBUTIONS- For purposes of paragraph (2)(H)--

`(A) IN GENERAL- The term `qualified foreclosure distribution' means any payment or distribution received by an individual after the individual has received a notice of foreclosure relating to any mortgage on the principal residence (within the meaning of section 121) of the individual.

`(B) LIMITATION- The aggregate payments or distributions which may be treated as qualified foreclosure distributions for a taxable year shall not exceed the amount paid on outstanding indebtedness secured by the principal residence of the taxpayer during the taxable year or the preceeding taxable year.'.

(c) Effective Date- The amendments made by this section shall apply to payments or distributions received after December 31, 2006.

SEC. 202. PENALTY-FREE DISTRIBUTIONS FROM IRAS FOR EXPENSES DURING EXTENDED UNEMPLOYMENT.

(a) In General- Subclause (III) of section 72(t)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

`(III) to the extent such distributions do not exceed the expenses during the taxable year with respect to the individual and the individual's spouse and dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof).'.

(b) Repayment- Subparagraph (D) of section 72(t) of such Code is amended by adding at the end the following new clause:

`(iv) AMOUNT DISTRIBUTED MAY BE REPAID-

`(I) IN GENERAL- Any individual who receives a distribution under this subparagraph, at any time during the 5-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an individual retirement plan of which such individual is a beneficiary.

`(II) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM IRAS- For purposes of this title, if a contribution is made pursuant to subclause (I) with respect to a distribution under clause (i), then, to the extent of the amount of the contribution, the distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to such plan in a direct trustee to trustee transfer within 60 days of the distribution.'.

(c) Clerical Amendment- The heading for subparagraph (D) of section 72(t)(2) of such Code is amended by striking `FOR HEALTH INSURANCE PREMIUMS'.

(d) Effective Date- The amendments made by this section shall apply to distributions received in taxable years beginning after December 31, 2006.

Subtitle B--Homeland Investment

SEC. 211. ALLOWANCE OF DEDUCTION FOR DIVIDENDS RECEIVED FROM CONTROLLED FOREIGN CORPORATIONS FOR ADDITIONAL YEAR.

(a) In General- Section 965 of the Internal Revenue Code of 1986 (relating to temporary dividends received deduction) is amended by adding at the end the following new subsection:

`(g) Allowance for Deduction for 2008-

`(1) IN GENERAL- In the case of the first taxable year beginning in 2008, subsection (f)(1) shall be applied by substituting `January 1, 2008,' for `the date of the enactment of this section'.

`(2) SPECIAL RULES- For purposes of paragraph (1)--

`(A) EXTRAORDINARY DIVIDENDS- Subsection (b)(2) shall be applied by substituting `June 30, 2007' for `June 30, 2003'.

`(B) DETERMINATIONS RELATING TO RELATED PARTY INDEBTEDNESS- Subsection (b)(3)(B) shall be applied by substituting `October 3, 2008' for `October 3, 2004'.

`(C) APPLICABLE FINANCIAL STATEMENT- Subsection (c)(1) shall be applied by substituting `June 30, 2007' for `June 30, 2003' each place it occurs.

`(D) DETERMINATIONS RELATING TO BASE PERIOD- Subsection (c)(2) shall be applied by substituting `June 30, 2007' for `June 30, 2003'.'.

(b) Effective Date- The amendment made by subsection (a) shall apply to taxable years ending on or after January 1, 2008.

Subtitle C--Suspension of Highway Fuels Taxes When Summer Blending in Effect

SEC. 221. SUSPENSION OF HIGHWAY FUELS TAXES WHEN SUMMER BLENDING IN EFFECT.

(a) Suspension of Highway Fuel Taxes on Gasoline, Diesel Fuel, and Kerosene-

(1) IN GENERAL- Section 4081 of the Internal Revenue Code of 1986 (relating to imposition of tax on gasoline, diesel fuel, and kerosene) is amended by adding at the end the following new subsection:

`(f) Suspension of Taxes on Gasoline, Diesel Fuel, and Kerosene-

`(1) IN GENERAL- During the suspension period, each rate of tax referred to in paragraph (2) shall be reduced to zero cents per gallon.

`(2) RATES OF TAX- The rates of tax referred to in this paragraph are the rates of tax otherwise applicable under--

`(A) clauses (i) and (iii) of subsection (a)(2)(A) (relating to gasoline, diesel fuel, and kerosene), determined after application of subsection (a)(2)(B) and without regard to subsection (a)(2)(C), and

`(B) paragraph (1) of section 4041(a) (relating to diesel fuel and kerosene) with respect to fuel sold for use or used in a diesel-powered highway vehicle.

`(3) SUSPENSION PERIOD- For purposes of this subsection, the term `suspension period' means the period in 2008 beginning on the date specified under the section 80.27 of title 40, Code of Federal Regulations, in May and ending on the date specified in September under such section.

`(4) MAINTENANCE OF TRUST FUND DEPOSITS- In determining the amounts to be appropriated to the Highway Trust Fund under section 9503 and to the Leaking Underground Storage Tank Trust Fund under 9508, an amount equal to the reduction in revenues to the Treasury by reason of this subsection shall be treated as taxes received in the Treasury under this section or section 4041.'.

(2) EFFECTIVE DATE- The amendment made by this subsection shall take effect on the date of the enactment of this Act.

(b) Floor Stock Refunds-

(1) IN GENERAL- If--

(A) before the tax suspension date, tax has been imposed under section 4081 of the Internal Revenue Code of 1986 on any highway motor fuel, and

(B) on such date such fuel is held by a dealer and has not been used and is intended for sale,

there shall be credited or refunded (without interest) to the person who paid such tax (hereafter in this subsection referred to as the `taxpayer') an amount equal to the excess of the tax paid by the taxpayer over the tax which would be imposed on such fuel had the taxable event occurred on such date.

(2) TIME FOR FILING CLAIMS- No credit or refund shall be allowed or made under this subsection unless--

(A) claim therefor is filed with the Secretary of the Treasury before the date which is 6 months after the tax suspension date based on a request submitted to the taxpayer before the date which is 3 months after the tax suspension date by the dealer who held the highway motor fuel on such date, and

(B) the taxpayer has repaid or agreed to repay the amount so claimed to such dealer or has obtained the written consent of such dealer to the allowance of the credit or the making of the refund.

(3) EXCEPTION FOR FUEL HELD IN RETAIL STOCKS- No credit or refund shall be allowed under this subsection with respect to any highway motor fuel in retail stocks held at the place where intended to be sold at retail.

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

(A) TAX SUSPENSION DATE- The term `tax suspension date' means the first day of the suspension period in effect under section 4081(f) of the Internal Revenue Code of 1986 (as added by subsection (a) of this section).

(B) HIGHWAY MOTOR FUEL- The term `highway motor fuel' has the meaning given such term for purposes of subsection (c).

(C) OTHER TERMS- The terms `dealer' and `held by a dealer' have the respective meanings given to such terms by section 6412 of such Code.

(5) CERTAIN RULES TO APPLY- Rules similar to the rules of subsections (b) and (c) of section 6412 of such Code shall apply for purposes of this subsection.

(1) IMPOSITION OF TAX- In the case of any highway motor fuel which is held on the tax restoration date by any person, there is hereby imposed a floor stocks tax equal to the excess of the tax which would be imposed on such fuel had the taxable event occurred on such date over the tax (if any) previously paid (and not credited or refunded) on such fuel.

(2) LIABILITY FOR TAX AND METHOD OF PAYMENT-

(A) LIABILITY FOR TAX- The person holding highway motor fuel on the tax restoration date to which the tax imposed by paragraph (1) applies shall be liable for such tax.

(B) METHOD OF PAYMENT- The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe.

(C) TIME FOR PAYMENT- The tax imposed by paragraph (1) shall be paid on or before the 45th day after the tax restoration date.

(3) DEFINITIONS- For purposes of this subsection--

(A) TAX RESTORATION DATE- The term `tax restoration date' means the first day after the suspension period (as defined in section 4081(f) of the Internal Revenue Code of 1986).

(B) HIGHWAY MOTOR FUEL- The term `highway motor fuel' means any liquid on which tax would have been imposed under section 4081 of the Internal Revenue Code of 1986 during the suspension period in effect under section 4081(f) of such Code but for the amendments made by subsection (a).

(C) HELD BY A PERSON- A highway motor 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).

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

(4) EXCEPTION FOR EXEMPT USES- The tax imposed by paragraph (1) shall not apply to any highway motor fuel held by any person exclusively for any use to the extent a credit or refund of the tax is allowable for such use.

(5) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL-

(A) IN GENERAL- No tax shall be imposed by paragraph (1) on any highway motor fuel held on the tax restoration date by any person if the aggregate amount of such highway motor 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.

(B) EXEMPT FUEL- For purposes of subparagraph (A), there shall not be taken into account any highway motor fuel held by any person which is exempt from the tax imposed by paragraph (1) by reason of paragraph (4).

(i) CORPORATIONS-

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

(II) CONTROLLED GROUP- The term `controlled group' has the meaning given to such term by subsection (a) of section 1563 of such Code; 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.

(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.

(6) OTHER LAWS APPLICABLE- All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4081 of such Code 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.

Subtitle D--Indexing for Capital Gains

SEC. 231. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF DETERMINING GAIN OR LOSS.

(a) In General- Part II of subchapter O of chapter 1 of the Internal Revenue Code of 1986 (relating to basis rules of general application) is amended by redesignating section 1023 as section 1024 and by inserting after section 1022 the following new section:

`SEC. 1023. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF DETERMINING GAIN OR LOSS.

`(a) General Rule-

`(1) INDEXED BASIS SUBSTITUTED FOR ADJUSTED BASIS- Solely for purposes of determining gain or loss on the sale or other disposition by a taxpayer (other than a corporation) of an indexed asset which has been held for more than 3 years, the indexed basis of the asset shall be substituted for its adjusted basis.

`(2) EXCEPTION FOR DEPRECIATION, ETC- The deductions for depreciation, depletion, and amortization shall be determined without regard to the application of paragraph (1) to the taxpayer or any other person.

`(3) WRITTEN DOCUMENTATION REQUIREMENT- Paragraph (1) shall apply only with respect to indexed assets for which the taxpayer has written documentation of the original purchase price paid or incurred by the taxpayer to acquire such asset.

`(b) Indexed Asset-

`(1) IN GENERAL- For purposes of this section, the term `indexed asset' means--

`(A) common stock in a C corporation (other than a foreign corporation), or

`(B) tangible property,

which is a capital asset or property used in the trade or business (as defined in section 1231(b)).

`(2) STOCK IN CERTAIN FOREIGN CORPORATIONS INCLUDED- For purposes of this section--

`(A) IN GENERAL- The term `indexed asset' includes common stock in a foreign corporation which is regularly traded on an established securities market.

`(B) EXCEPTION- Subparagraph (A) shall not apply to--

`(i) stock of a foreign investment company,

`(ii) stock in a passive foreign investment company (as defined in section 1296),

`(iii) stock in a foreign corporation held by a United States person who meets the requirements of section 1248(a)(2), and

`(iv) stock in a foreign personal holding company.

`(C) TREATMENT OF AMERICAN DEPOSITORY RECEIPTS- An American depository receipt for common stock in a foreign corporation shall be treated as common stock in such corporation.

`(c) Indexed Basis- For purposes of this section--

`(1) GENERAL RULE- The indexed basis for any asset is--

`(A) the adjusted basis of the asset, increased by

`(B) the applicable inflation adjustment.

`(2) APPLICABLE INFLATION ADJUSTMENT- The applicable inflation adjustment for any asset is an amount equal to--

`(A) the adjusted basis of the asset, multiplied by

`(B) the percentage (if any) by which--

`(i) the gross domestic product deflator for the last calendar quarter ending before the asset is disposed of, exceeds

`(ii) the gross domestic product deflator for the last calendar quarter ending before the asset was acquired by the taxpayer.

The percentage under subparagraph (B) shall be rounded to the nearest 1/10 of 1 percentage point.

`(3) GROSS DOMESTIC PRODUCT DEFLATOR- The gross domestic product deflator for any calendar quarter is the implicit price deflator for the gross domestic product for such quarter (as shown in the last revision thereof released by the Secretary of Commerce before the close of the following calendar quarter).

`(d) Suspension of Holding Period Where Diminished Risk of Loss; Treatment of Short Sales-

`(1) IN GENERAL- If the taxpayer (or a related person) enters into any transaction which substantially reduces the risk of loss from holding any asset, such asset shall not be treated as an indexed asset for the period of such reduced risk.

`(2) SHORT SALES-

`(A) IN GENERAL- In the case of a short sale of an indexed asset with a short sale period in excess of 3 years, for purposes of this title, the amount realized shall be an amount equal to the amount realized (determined without regard to this paragraph) increased by the applicable inflation adjustment. In applying subsection (c)(2) for purposes of the preceding sentence, the date on which the property is sold short shall be treated as the date of acquisition and the closing date for the sale shall be treated as the date of disposition.

`(B) SHORT SALE PERIOD- For purposes of subparagraph (A), the short sale period begins on the day that the property is sold and ends on the closing date for the sale.

`(e) Treatment of Regulated Investment Companies and Real Estate Investment Trusts-

`(1) ADJUSTMENTS AT ENTITY LEVEL-

`(A) IN GENERAL- Except as otherwise provided in this paragraph, the adjustment under subsection (a) shall be allowed to any qualified investment entity (including for purposes of determining the earnings and profits of such entity).

`(B) EXCEPTION FOR CORPORATE SHAREHOLDERS- Under regulations--

`(i) in the case of a distribution by a qualified investment entity (directly or indirectly) to a corporation--

`(I) the determination of whether such distribution is a dividend shall be made without regard to this section, and

`(II) the amount treated as gain by reason of the receipt of any capital gain dividend shall be increased by the percentage by which the entity's net capital gain for the taxable year (determined without regard to this section) exceeds the entity's net capital gain for such year determined with regard to this section, and

`(ii) there shall be other appropriate adjustments (including deemed distributions) so as to ensure that the benefits of this section are not allowed (directly or indirectly) to corporate shareholders of qualified investment entities.

For purposes of the preceding sentence, any amount includible in gross income under section 852(b)(3)(D) shall be treated as a capital gain dividend and an S corporation shall not be treated as a corporation.

`(C) EXCEPTION FOR QUALIFICATION PURPOSES- This section shall not apply for purposes of sections 851(b) and 856(c).

`(D) EXCEPTION FOR CERTAIN TAXES IMPOSED AT ENTITY LEVEL-

`(i) TAX ON FAILURE TO DISTRIBUTE ENTIRE GAIN- If any amount is subject to tax under section 852(b)(3)(A) for any taxable year, the amount on which tax is imposed under such section shall be increased by the percentage determined under subparagraph (B)(i)(II). A similar rule shall apply in the case of any amount subject to tax under paragraph (2) or (3) of section 857(b) to the extent attributable to the excess of the net capital gain over the deduction for dividends paid determined with reference to capital gain dividends only. The first sentence of this clause shall not apply to so much of the amount subject to tax under section 852(b)(3)(A) as is designated by the company under section 852(b)(3)(D).

`(ii) OTHER TAXES- This section shall not apply for purposes of determining the amount of any tax imposed by paragraph (4), (5), or (6) of section 857(b).

`(2) ADJUSTMENTS TO INTERESTS HELD IN ENTITY-

`(A) REGULATED INVESTMENT COMPANIES- Stock in a regulated investment company (within the meaning of section 851) shall be an indexed asset for any calendar quarter in the same ratio as--

`(i) the average of the fair market values of the indexed assets held by such company at the close of each month during such quarter, bears to

`(ii) the average of the fair market values of all assets held by such company at the close of each such month.

`(B) REAL ESTATE INVESTMENT TRUSTS- Stock in a real estate investment trust (within the meaning of section 856) shall be an indexed asset for any calendar quarter in the same ratio as--

`(i) the fair market value of the indexed assets held by such trust at the close of such quarter, bears to

`(ii) the fair market value of all assets held by such trust at the close of such quarter.

`(C) RATIO OF 80 PERCENT OR MORE- If the ratio for any calendar quarter determined under subparagraph (A) or (B) would (but for this subparagraph) be 80 percent or more, such ratio for such quarter shall be 100 percent.

`(D) RATIO OF 20 PERCENT OR LESS- If the ratio for any calendar quarter determined under subparagraph (A) or (B) would (but for this subparagraph) be 20 percent or less, such ratio for such quarter shall be zero.

`(E) LOOK-THRU OF PARTNERSHIPS- For purposes of this paragraph, a qualified investment entity which holds a partnership interest shall be treated (in lieu of holding a partnership interest) as holding its proportionate share of the assets held by the partnership.

`(3) TREATMENT OF RETURN OF CAPITAL DISTRIBUTIONS- Except as otherwise provided by the Secretary, a distribution with respect to stock in a qualified investment entity which is not a dividend and which results in a reduction in the adjusted basis of such stock shall be treated as allocable to stock acquired by the taxpayer in the order in which such stock was acquired.

`(4) QUALIFIED INVESTMENT ENTITY- For purposes of this subsection, the term `qualified investment entity' means--

`(A) a regulated investment company (within the meaning of section 851), and

`(B) a real estate investment trust (within the meaning of section 856).

`(f) Other Pass-Thru Entities-

`(1) PARTNERSHIPS-

`(A) IN GENERAL- In the case of a partnership, the adjustment made under subsection (a) at the partnership level shall be passed through to the partners.

`(B) SPECIAL RULE IN THE CASE OF SECTION 754 ELECTIONS- In the case of a transfer of an interest in a partnership with respect to which the election provided in section 754 is in effect--

`(i) the adjustment under section 743(b)(1) shall, with respect to the transferor partner, be treated as a sale of the partnership assets for purposes of applying this section, and

`(ii) with respect to the transferee partner, the partnership's holding period for purposes of this section in such assets shall be treated as beginning on the date of such adjustment.

`(2) S CORPORATIONS- In the case of an S corporation, the adjustment made under subsection (a) at the corporate level shall be passed through to the shareholders. This section shall not apply for purposes of determining the amount of any tax imposed by section 1374 or 1375.

`(3) COMMON TRUST FUNDS- In the case of a common trust fund, the adjustment made under subsection (a) at the trust level shall be passed through to the participants.

`(4) INDEXING ADJUSTMENT DISREGARDED IN DETERMINING LOSS ON SALE OF INTEREST IN ENTITY- Notwithstanding the preceding provisions of this subsection, for purposes of determining the amount of any loss on a sale or exchange of an interest in a partnership, S corporation, or common trust fund, the adjustment made under subsection (a) shall not be taken into account in determining the adjusted basis of such interest.

`(g) Dispositions Between Related Persons-

`(1) IN GENERAL- This section shall not apply to any sale or other disposition of property between related persons except to the extent that the basis of such property in the hands of the transferee is a substituted basis.

`(2) RELATED PERSONS DEFINED- For purposes of this section, the term `related persons' means--

`(A) persons bearing a relationship set forth in section 267(b), and

`(B) persons treated as single employer under subsection (b) or (c) of section 414.

`(h) Transfers To Increase Indexing Adjustment- If any person transfers cash, debt, or any other property to another person and the principal purpose of such transfer is to secure or increase an adjustment under subsection (a), the Secretary may disallow part or all of such adjustment or increase.

`(i) Special Rules- For purposes of this section--

`(1) TREATMENT OF IMPROVEMENTS, ETC- If there is an addition to the adjusted basis of any tangible property or of any stock in a corporation during the taxable year by reason of an improvement to such property or a contribution to capital of such corporation--

`(A) such addition shall never be taken into account under subsection (c)(1)(A) if the aggregate amount thereof during the taxable year with respect to such property or stock is less than $1,000, and

`(B) such addition shall be treated as a separate asset acquired at the close of such taxable year if the aggregate amount thereof during the taxable year with respect to such property or stock is $1,000 or more.

A rule similar to the rule of the preceding sentence shall apply to any other portion of an asset to the extent that separate treatment of such portion is appropriate to carry out the purposes of this section.

`(2) ASSETS WHICH ARE NOT INDEXED ASSETS THROUGHOUT HOLDING PERIOD- The applicable inflation adjustment shall be appropriately reduced for periods during which the asset was not an indexed asset.

`(3) TREATMENT OF CERTAIN DISTRIBUTIONS- A distribution with respect to stock in a corporation which is not a dividend shall be treated as a disposition.

`(4) SECTION CANNOT INCREASE ORDINARY LOSS- To the extent that (but for this paragraph) this section would create or increase a net ordinary loss to which section 1231(a)(2) applies or an ordinary loss to which any other provision of this title applies, such provision shall not apply. The taxpayer shall be treated as having a long-term capital loss in an amount equal to the amount of the ordinary loss to which the preceding sentence applies.

`(5) ACQUISITION DATE WHERE THERE HAS BEEN PRIOR APPLICATION OF SUBSECTION (a)(1) WITH RESPECT TO THE TAXPAYER- If there has been a prior application of subsection (a)(1) to an asset while such asset was held by the taxpayer, the date of acquisition of such asset by the taxpayer shall be treated as not earlier than the date of the most recent such prior application.

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

(b) Clerical Amendment- The table of sections for part II of subchapter O of chapter 1 of such Code is amended by striking the item relating to section 1023 and by inserting after the item relating to section 1022 the following new item:

`Sec. 1023. Indexing of certain assets for purposes of determining gain or loss.

`Sec. 1024. Cross references.'.

(c) Effective Date- The amendments made by this section shall apply to indexed assets acquired by the taxpayer after December 31, 2007, in taxable years ending after such date.

TITLE III--EMERGENCY ASSISTANCE FOR REDEVELOPMENT OF ABANDONED AND FORECLOSED HOMES AND FOR WEATHERIZATION OF HOMES OF LOW-INCOME FAMILIES

SEC. 301. DIRECT APPROPRIATIONS.

There are appropriated out of any money in the Treasury not otherwise appropriated for the fiscal year 2008, $4,000,000,000, to remain available until expended, for assistance to States and units of general local government (as such terms are defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302)) for the redevelopment of abandoned and foreclosed upon homes and residential properties and for the weatherization of homes of low-income families.

SEC. 302. ALLOCATION OF APPROPRIATED AMOUNTS.

(a) In General- The amounts appropriated or otherwise made available to States and units of general local government under this title shall be allocated based on a funding formula established by the Secretary of Housing and Urban Development (in this title referred to as the `Secretary').

(b) Formula To Be Devised Swiftly- The funding formula required under subsection (a)) shall be established not later than 60 days after the date of the enactment of this Act.

(c) Criteria- The funding formula required under subsection (a) shall ensure that any amounts appropriated or otherwise made available under this title are allocated to States and units of general local government with the greatest need, as such need is determined in the discretion of the Secretary based on--

(1) the number and percentage of home foreclosures in each State or unit of general local government;

(2) the number and percentage of homes financed by a subprime mortgage related loan in each State or unit of general local government;

(3) the number and percentage of homes in default or delinquency in each State or unit of general local government;

(4) the rate of unemployment in each State or unit of general local government; and

(5) the amount of assistance used within the State or unit of general local government under the Low-Income Home Energy Assistance Program under title XXVI of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.).

(d) Distribution- Amounts appropriated or otherwise made available under this title shall be distributed according to the funding formula established by the Secretary under subsection (a) not later than 30 days after the establishment of such formula.

SEC. 303. USE OF FUNDS.

(a) In General- Any State or unit of general local government that receives amounts pursuant to this title shall, not later than 18 months after the receipt of such amounts, use such amounts only as provided in subsection (c) to purchase and redevelop abandoned and foreclosed homes and residential properties or to weatherize homes of low-income families.

(b) Priority- Any State or unit of general local government that receives amounts pursuant to this title shall, in distributing such amounts, give priority emphasis and consideration to those metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate-income areas, and other areas with the greatest need, including those--

(1) with the greatest percentage of home foreclosures;

(2) with the highest percentage of homes financed by a subprime mortgage related loan;

(3) identified by the State or unit of general local government as likely to face a significant rise in the rate of home foreclosures; and

(4) having the greatest need for weatherization for homes of low-income families, as demonstrated by the amount of assistance used within the metropolitan area, metropolitan city, urban area, rural area, low- or moderate-income area, and other area under the Low-Income Home Energy Assistance Program under title XXVI of the Low-Income Home Energy Assistance Act of 1981.

(1) establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers;

(2) purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties;

(3) establish land banks for homes that have been foreclosed upon;

(4) demolish blighted structures; and

(5) conduct activities to rehabilitate and make improvements to homes of low-income families that--

(A) make such homes secure against cold, heat, wind, precipitation, or other inclement weather; and

(B) would be eligible for funding provided under the HOME Investment Partnerships Act (42 U.S.C. 12721 et seq.);

except that such activities may only be conducted with respect to homes of families who, at any time during the 36-month period ending upon the date of the enactment of this Act, have received assistance under the Low-Income Home Energy Assistance Program under title XXVI of the Low-Income Home Energy Assistance Act of 1981.

SEC. 304. LIMITATIONS.

(a) On Purchases- Any purchase of a foreclosed upon home or residential property under this title shall be at a discount from the current market appraised value of the home or property, taking into account its current condition, and such discount shall ensure that purchasers are paying below-market value for the home or property.

(b) Sale of Homes- If an abandoned or foreclosed upon home or residential property is purchased, redeveloped, or otherwise sold to an individual as a primary residence, then such sale shall be in an amount equal to or less than the cost to acquire and redevelop or rehabilitate such home or property up to a decent, safe, and habitable condition.

(1) REVENUES GENERATED FROM SALES- Any revenue generated from the sale, rental, redevelopment, rehabilitation, or any other eligible use that is in excess of the cost to acquire and redevelop (including reasonable development fees) or rehabilitate an abandoned or foreclosed upon home or residential property shall be provided to and used by the State or unit of general local government in accordance with, and in furtherance of, the intent and provisions of this title.

(2) OTHER REVENUES- Any revenue generated under paragraphs (1), (3) or (4) of section 303(c) shall be provided to and used by the State or unit of general local government in accordance with, and in furtherance of, the intent and provisions of this title.

SEC. 305. RULES OF CONSTRUCTION.

(a) In General- Except as otherwise provided by this title, amounts appropriated, revenues generated, or amounts otherwise made available to States and units of general local government under this title shall be treated as though such funds were community development block grant funds under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.).

(b) No Match- No matching funds shall be required in order for a State or unit of general local government to receive any amounts under this title.

SEC. 306. AUTHORITY TO SPECIFY ALTERNATIVE REQUIREMENTS.

(a) In General- In administering any amounts appropriated or otherwise made available under this title, the Secretary may specify alternative requirements to any provision under title I of the Housing and Community Development Act of 1974 (except for those related to fair housing, nondiscrimination, labor standards, and the environment) in accordance with the terms of this title and for the sole purpose of expediting the use of such funds.

(b) Notice- The Secretary shall provide written notice of the Secretary's intent to exercise the authority to specify alternative requirements under subsection (a) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives not later than 10 business days before such exercise of authority is to occur.

(1) IN GENERAL- Notwithstanding the authority of the Secretary under paragraph (1)--

(A) all of the funds appropriated or otherwise made available under this title shall be used with respect to individuals and families whose income does not exceed 120 percent of area median income; and

(B) not less than 25 percent of the funds appropriated or otherwise made available under this title shall be used for--

(i) the purchase and redevelopment of abandoned or foreclosed upon homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of area median income; or

(ii) weatherization activities for homes of individuals or families whose incomes do not exceed 50 percent of area median income.

(2) RECURRENT REQUIREMENT- The Secretary shall, by rule or order, ensure, to the maximum extent practicable and for the longest feasible term, that the sale, rental, or redevelopment of abandoned and foreclosed upon homes and residential properties under this title remain affordable to individuals or families described in paragraph (1).

SEC. 307. PERIODIC AUDITS.

In consultation with the Secretary of Housing and Urban Development, the Comptroller General of the United States shall conduct periodic audits to ensure that funds appropriated, made available, or otherwise distributed under this title are being used in a manner consistent with the criteria provided in this title.

END