[House Report 107-359]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-359
======================================================================
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENTS TO THE BILL H.R.
622, HOPE FOR CHILDREN ACT
_______
February 14 (legislative day, February 13), 2002.--Referred to the
House Calendar and ordered to be printed
_______
Mr. Hastings of Washington, from the Committee on Rules, submitted the
following
R E P O R T
[To accompany H. Res. 347]
The Committee on Rules, having had under consideration
House Resolution 347, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
summary of provisions of the resolution
The resolution provides for a single motion offered by the
chairman of the Committee on Ways and Means or his designee to
take from the Speaker's table the bill H.R. 622, the Hope for
Children Act, with Senate amendments thereto, and concur in
each of the Senate amendments with the amendment printed in
this report. The rule waives all points of order against the
motion. The rule provides that the Senate amendments and the
motion shall be considered as read. The rule provides one hour
of debate in the House equally divided and controlled by the
chairman and ranking minority member of the Committee on Ways
and Means. Finally, the rule provides that the previous
question shall be considered as ordered on the motion to final
adoption without intervening motion or demand for division of
the question.
The waiver of all points of order applies to the motion and
therefore applies to the amendment printed in this report as
part of the motion.
The waiver of all points of order includes a waiver of
clause 7 of rule XVI (prohibiting nongermane amendments). The
waiver also includes a waiver of section 302 (prohibiting
consideration of legislation providing new budget authority in
excess of a committee's allocation of such authority, section
306 (prohibiting consideration of legislation within the Budget
Committee's jurisdiction, unless reported by the Budget
Committee), and section 401 (prohibiting consideration of
legislation providing new entitlement authority which becomes
effective during the current fiscal year) of the Congressional
Budget Act of 1974.
summary of amendment included in the motion
Thomas--Amends the Internal Revenue Code to: (1) provide
for supplemental stimulus payments; and (2) accelerate the 25
percent individual income tax rate. Sets forth provisions
specifically applicable to business, including: (1) a special
depreciation allowance for certain property acquired after
September 10, 2001, and before September 11, 2004; (2) a
temporary increase in section 179 expensing; and (3) an
increased carryback period for certain losses. Extends varied
expiring provisions, including: (1) the credits for qualified
electric vehicles, work opportunity credit, and the welfare-to-
work credit; and (2) provisions concerning the taxable income
limit on percentage depletion for oil and natural gas produced
from marginal properties, parity in the application of certain
limits to mental health benefits, and the availability of
medical savings accounts. Reauthorizes Temporary Assistance for
Needy Families supplemental grants for population increases for
FY 2002. Provides special allowances for a designated ``New
York Liberty Zone'' for the area damaged in the September 11,
2001, terrorist attacks. Provides a program of temporary
extended unemployment compensation. Establishes a displaced
worker health insurance credit. Amends the Workforce Investment
Act of 1998, with respect to national emergency grants, to
authorize grants for employment and training assistance and
temporary health care coverage assistance to workers affected
by major economic dislocations. Provides for temporary State
health care assistance.
text of amendment included in the motion
In lieu of the matter proposed to be inserted by the
amendment of the Senate to the text of the bill, insert the
following:
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Economic Security
and Worker Assistance Act of 2002''.
(b) References to Internal Revenue Code of 1986.--Except as otherwise
expressly provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--
Sec. 1. Short title; etc.
TITLE I--INDIVIDUAL PROVISIONS
Sec. 101. Supplemental stimulus payments.
Sec. 102. Acceleration of 25 percent individual income tax rate.
TITLE II--BUSINESS PROVISIONS
Sec. 201. Special depreciation allowance for certain property acquired
after September 10, 2001, and before September 11, 2004.
Sec. 202. Temporary increase in expensing under section 179.
Sec. 203. Alternative minimum tax reform.
Sec. 204. Carryback of certain net operating losses allowed for 5
years.
Sec. 205. Recovery period for depreciation of certain leasehold
improvements.
TITLE III--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS
Subtitle A--Extensions
Sec. 301. Allowance of nonrefundable personal credits against regular
and minimum tax liability.
Sec. 302. Credit for qualified electric vehicles.
Sec. 303. Credit for electricity produced from certain renewable
resources.
Sec. 304. Work opportunity credit.
Sec. 305. Welfare-to-work credit.
Sec. 306. Deduction for clean-fuel vehicles and certain refueling
property.
Sec. 307. Taxable income limit on percentage depletion for oil and
natural gas produced from marginal properties.
Sec. 308. Qualified zone academy bonds.
Sec. 309. Cover over of tax on distilled spirits.
Sec. 310. Parity in the application of certain limits to mental health
benefits.
Sec. 311. Temporary special rules for taxation of life insurance
companies.
Sec. 312. Availability of medical savings accounts.
Sec. 313. Incentives for Indian employment and property on Indian
reservations.
Sec. 314. Subpart F exemption for active financing.
Sec. 315. Repeal of requirement for approved diesel or kerosene
terminals.
Subtitle B--Temporary Assistance for Needy Families
Sec. 321. Reauthorization of TANF supplemental grants for population
increases for fiscal year 2002.
Sec. 322. 1-year extension of contingency fund under the TANF program.
TITLE IV--TAX INCENTIVES FOR NEW YORK CITY AND DISTRESSED AREAS
Sec. 401. Tax benefits for area of New York City damaged in terrorist
attacks on September 11, 2001.
TITLE V--MISCELLANEOUS AND TECHNICAL PROVISIONS
Subtitle A--General Miscellaneous Provisions
Sec. 501. Allowance of electronic 1099's.
Sec. 502. Excluded cancellation of indebtedness income of S corporation
not to result in adjustment to basis of stock of shareholders.
Sec. 503. Limitation on use of nonaccrual experience method of
accounting.
Sec. 504. Exclusion for foster care payments to apply to payments by
qualified placement agencies.
Sec. 505. Interest rate range for additional funding requirements.
Sec. 506. Adjusted gross income determined by taking into account
certain expenses of elementary and secondary school teachers.
Subtitle B--Technical Corrections
Sec. 511. Amendments related to Economic Growth and Tax Relief
Reconciliation Act of 2001.
Sec. 512. Amendments related to Community Renewal Tax Relief Act of
2000.
Sec. 513. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 514. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 515. Amendment related to the Balanced Budget Act of 1997.
Sec. 516. Other technical corrections.
Sec. 517. Clerical amendments.
Sec. 518. Additional corrections.
TITLE VI--UNEMPLOYMENT ASSISTANCE
Sec. 601. Short title.
Sec. 602. Federal-State agreements.
Sec. 603. Temporary extended unemployment compensation account.
Sec. 604. Payments to States having agreements for the payment of
temporary extended unemployment compensation.
Sec. 605. Financing provisions.
Sec. 606. Fraud and overpayments.
Sec. 607. Definitions.
Sec. 608. Applicability.
Sec. 609. Special Reed Act transfer in fiscal year 2002.
TITLE VII--DISPLACED WORKER HEALTH INSURANCE CREDIT
Sec. 701. Displaced worker health insurance credit.
Sec. 702. Advance payment of displaced worker health insurance credit.
TITLE VIII--EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY HEALTH
CARE COVERAGE ASSISTANCE
Sec. 801. Employment and training assistance and temporary health care
coverage assistance.
TITLE IX--TEMPORARY STATE HEALTH CARE ASSISTANCE
Sec. 901. Temporary State health care assistance.
TITLE X--SOCIAL SECURITY HELD HARMLESS; BUDGETARY TREATMENT OF ACT
Sec. 1001. No impact on social security trust funds.
Sec. 1002. Emergency designation.
TITLE I--INDIVIDUAL PROVISIONS
SEC. 101. SUPPLEMENTAL STIMULUS PAYMENTS.
(a) In General.--Section 6428 (relating to acceleration of 10 percent
income tax rate bracket benefit for 2001) is amended by adding at the
end the following new subsection:
``(f) Supplemental Stimulus Payments.--
``(1) In general.--Each individual who was an eligible
individual for such individual's first taxable year beginning
in 2000 and who, before October 16, 2001, filed a return of tax
imposed by subtitle A for such taxable year shall be treated as
having made a payment against the tax imposed by chapter 1 for
such first taxable year in an amount equal to the supplemental
refund amount for such taxable year.
``(2) Supplemental refund amount.--For purposes of this
subsection, the supplemental refund amount is an amount equal
to the excess (if any) of--
``(A)(i) $600 in the case of taxpayers to whom
section 1(a) applies,
``(ii) $500 in the case of taxpayers to whom section
1(b) applies, and
``(iii) $300 in the case of taxpayers to whom
subsections (c) or (d) of section 1 applies, over
``(B) the taxpayer's advance refund amount under
subsection (e).
``(3) Timing of payments.--In the case of any overpayment
attributable to this subsection, the Secretary shall, subject
to the provisions of this title, refund or credit such
overpayment as rapidly as possible.
``(4) No interest.--No interest shall be allowed on any
overpayment attributable to this subsection.''
(b) Conforming Amendments.--
(1) Subparagraph (A) of section 6428(d)(1) is amended by
striking ``subsection (e)'' and inserting ``subsections (e) and
(f)''.
(2) Subparagraph (B) of section 6428(d)(1) is amended by
striking ``subsection (e)'' and inserting ``subsection (e) or
(f)''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 102. ACCELERATION OF 25 PERCENT INDIVIDUAL INCOME TAX RATE.
(a) In General.--The table contained in paragraph (2) of section 1(i)
(relating to reductions in rates after June 30, 2001) is amended--
(1) by striking ``27.0%'' and inserting ``25.0%'', and
(2) by striking ``26.0%'' and inserting ``25.0%''.
(b) Reduction Not To Increase Minimum Tax.--
(1) Subparagraph (A) of section 55(d)(1) is amended by
striking ``($49,000 in the case of taxable years beginning in
2001, 2002, 2003, and 2004)'' and inserting ``($49,000 in the
case of taxable years beginning in 2001, $52,200 in the case of
taxable years beginning in 2002 or 2003, and $50,700 in the
case of taxable years beginning in 2004)''.
(2) Subparagraph (B) of section 55(d)(1) is amended by
striking ``($35,750 in the case of taxable years beginning in
2001, 2002, 2003, and 2004)'' and inserting ``($35,750 in the
case of taxable years beginning in 2001, $37,350 in the case of
taxable years beginning in 2002 or 2003, and $36,600 in the
case of taxable years beginning in 2004)''.
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
(d) Section 15 Not To Apply.--No amendment made by this section shall
be treated as a change in a rate of tax for purposes of section 15 of
the Internal Revenue Code of 1986.
TITLE II--BUSINESS PROVISIONS
SEC. 201. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED
AFTER SEPTEMBER 10, 2001, AND BEFORE SEPTEMBER 11,
2004.
(a) In General.--Section 168 (relating to accelerated cost recovery
system) is amended by adding at the end the following new subsection:
``(k) Special Allowance for Certain Property Acquired After September
10, 2001, and Before September 11, 2004.--
``(1) Additional allowance.--In the case of any qualified
property--
``(A) the depreciation deduction provided by section
167(a) for the taxable year in which such property is
placed in service shall include an allowance equal to
30 percent of the adjusted basis of the qualified
property, and
``(B) the adjusted basis of the qualified property
shall be reduced by the amount of such deduction before
computing the amount otherwise allowable as a
depreciation deduction under this chapter for such
taxable year and any subsequent taxable year.
``(2) Qualified property.--For purposes of this subsection--
``(A) In general.--The term `qualified property'
means property--
``(i)(I) to which this section applies which
has a recovery period of 20 years or less or
which is water utility property, or
``(II) which is computer software (as defined
in section 167(f)(1)(B)) for which a deduction
is allowable under section 167(a) without
regard to this subsection,
``(ii) the original use of which commences
with the taxpayer after September 10, 2001,
``(iii) which is--
``(I) acquired by the taxpayer after
September 10, 2001, and before
September 11, 2004, but only if no
written binding contract for the
acquisition was in effect before
September 11, 2001, or
``(II) acquired by the taxpayer
pursuant to a written binding contract
which was entered into after September
10, 2001, and before September 11,
2004, and
``(iv) which is placed in service by the
taxpayer before January 1, 2005, or, in the
case of property described in subparagraph (B),
before January 1, 2006.
``(B) Certain property having longer production
periods treated as qualified property.--
``(i) In general.--The term `qualified
property' includes property--
``(I) which meets the requirements of
clauses (i), (ii), and (iii) of
subparagraph (A),
``(II) which has a recovery period of
at least 10 years or is transportation
property, and
``(III) which is subject to section
263A by reason of clause (ii) or (iii)
of subsection (f)(1)(B) thereof.
``(ii) Only pre-september 11, 2004, basis
eligible for additional allowance.--In the case
of property which is qualified property solely
by reason of clause (i), paragraph (1) shall
apply only to the extent of the adjusted basis
thereof attributable to manufacture,
construction, or production before September
11, 2004.
``(iii) Transportation property.--For
purposes of this subparagraph, the term
`transportation property' means tangible
personal property used in the trade or business
of transporting persons or property.
``(C) Exceptions.--
``(i) Alternative depreciation property.--The
term `qualified property' shall not include any
property to which the alternative depreciation
system under subsection (g) applies,
determined--
``(I) without regard to paragraph (7)
of subsection (g) (relating to election
to have system apply), and
``(II) after application of section
280F(b) (relating to listed property
with limited business use).
``(ii) Election out.--If a taxpayer makes an
election under this clause with respect to any
class of property for any taxable year, this
subsection shall not apply to all property in
such class placed in service during such
taxable year.
``(iii) Qualified leasehold improvement
property.--The term `qualified property' shall
not include any qualified leasehold improvement
property (as defined in section 168(e)(6)).
``(D) Special rules.--
``(i) Self-constructed property.--In the case
of a taxpayer manufacturing, constructing, or
producing property for the taxpayer's own use,
the requirements of clause (iii) of
subparagraph (A) shall be treated as met if the
taxpayer begins manufacturing, constructing, or
producing the property after September 10,
2001, and before September 11, 2004.
``(ii) Sale-leasebacks.--For purposes of
subparagraph (A)(ii), if property--
``(I) is originally placed in service
after September 10, 2001, by a person,
and
``(II) sold and leased back by such
person within 3 months after the date
such property was originally placed in
service,
such property shall be treated as originally
placed in service not earlier than the date on
which such property is used under the leaseback
referred to in subclause (II).
``(E) Coordination with section 280f.--For purposes
of section 280F--
``(i) Automobiles.--In the case of a
passenger automobile (as defined in section
280F(d)(5)) which is qualified property, the
Secretary shall increase the limitation under
section 280F(a)(1)(A)(i) by $4,600.
``(ii) Listed property.--The deduction
allowable under paragraph (1) shall be taken
into account in computing any recapture amount
under section 280F(b)(2).''
(b) Allowance Against Alternative Minimum Tax.--
(1) In general.--Section 56(a)(1)(A) (relating to
depreciation adjustment for alternative minimum tax) is amended
by adding at the end the following new clause:
``(iii) Additional allowance for certain
property acquired after september 10, 2001, and
before september 11, 2004.--The deduction under
section 168(k) shall be allowed.''
(2) Conforming amendment.--Clause (i) of section 56(a)(1)(A)
is amended by striking ``clause (ii)'' both places it appears
and inserting ``clauses (ii) and (iii)''.
(c) Effective Date.--The amendments made by this section shall apply
to property placed in service after September 10, 2001, in taxable
years ending after such date.
SEC. 202. TEMPORARY INCREASE IN EXPENSING UNDER SECTION 179.
(a) In General.--The table contained in section 179(b)(1) (relating
to dollar limitation) is amended to read as follows:
``If the taxable year
The applicable
begins in:
amount is:
2001............................... $24,000
2002 or 2003....................... $40,000
2004 or thereafter................. $25,000.''
(b) Temporary Increase in Amount of Property Triggering Phaseout of
Maximum Benefit.--Paragraph (2) of section 179(b) is amended by
inserting before the period ``($325,000 in the case of taxable years
beginning during 2002 or 2003)''.
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 203. ALTERNATIVE MINIMUM TAX REFORM.
(a) Repeal of Preference for Depreciation.--
(1) Paragraph (1) of section 56(a) is amended by adding at
the end the following new subparagraph:
``(E) Termination.--This paragraph shall not apply to
property placed in service in taxable years beginning
after December 31, 2001.''
(2) Paragraph (5) of section 56(a) is amended by adding at
the end: ``This paragraph shall not apply to property placed in
service in taxable years beginning after December 31, 2001.''
(b) Repeal of 90 Percent Limitation on Foreign Tax Credits.--
(1) Subsection (a) of section 59 is amended by striking
paragraph (2) and by redesignating paragraphs (3) and (4) as
paragraphs (2) and (3), respectively.
(2) Subclause (II) of section 53(d)(1)(B)(i) is amended by
striking ``and if section 59(a)(2) did not apply''.
(c) Repeal of 90 Percent Limitation on Net Operating Loss
Deduction.--Subparagraph (A) of section 56(d)(1), as amended by section
204, is amended to read as follows:
``(A) the amount of such deduction shall not exceed
alternative minimum taxable income determined without
regard to such deduction, and''.
(d) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 204. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED FOR 5
YEARS.
(a) In General.--Paragraph (1) of section 172(b) (relating to years
to which loss may be carried) is amended by adding at the end the
following new subparagraph:
``(H) In the case of a taxpayer which has a net
operating loss for any taxable year ending during 2001
or 2002, subparagraph (A)(i) shall be applied by
substituting `5' for `2' and subparagraph (F) shall not
apply.''
(b) Election To Disregard 5-Year Carryback.--Section 172 (relating to
net operating loss deduction) is amended by redesignating subsection
(j) as subsection (k) and by inserting after subjection (i) the
following new subsection:
``(j) Election To Disregard 5-Year Carryback for Certain Net
Operating Losses.--Any taxpayer entitled to a 5-year carryback under
subsection (b)(1)(H) from any loss year may elect to have the carryback
period with respect to such loss year determined without regard to
subsection (b)(1)(H). Such election shall be made in such manner as may
be prescribed by the Secretary and shall be made by the due date
(including extensions of time) for filing the taxpayer's return for the
taxable year of the net operating loss. Such election, once made for
any taxable year, shall be irrevocable for such taxable year.''
(c) Temporary Suspension of 90 Percent Limit on Certain NOL
Carrybacks.--
(1) In general.--Subparagraph (A) of section 56(d)(1)
(relating to general rule defining alternative tax net
operating loss deduction) is amended to read as follows:
``(A) the amount of such deduction shall not exceed
the sum of--
``(i) the lesser of--
``(I) the amount of such deduction
attributable to net operating losses
(other than the deduction attributable
to carrybacks described in clause
(ii)(I)), or
``(II) 90 percent of alternative
minimum taxable income determined
without regard to such deduction, plus
``(ii) the lesser of--
``(I) the amount of such deduction
attributable to carrybacks of net
operating losses for taxable years
ending during 2001 or 2002, or
``(II) alternative minimum taxable
income determined without regard to
such deduction reduced by the amount
determined under clause (i), and''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning before January 1, 2002.
(d) Effective Date.--Except as provided in subsection (c), the
amendments made by this section shall apply to net operating losses for
taxable years ending after December 31, 2000.
SEC. 205. RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN LEASEHOLD
IMPROVEMENTS.
(a) 15-Year Recovery Period.--Subparagraph (E) of section 168(e)(3)
(relating to 15-year property) is amended by striking ``and'' at the
end of clause (ii), by striking the period at the end of clause (iii)
and inserting ``, and'', and by adding at the end the following new
clause:
``(iv) any qualified leasehold improvement
property.''
(b) Qualified Leasehold Improvement Property.--Subsection (e) of
section 168 is amended by adding at the end the following new
paragraph:
``(6) Qualified leasehold improvement property.--
``(A) In general.--The term `qualified leasehold
improvement property' means any improvement to an
interior portion of a building which is nonresidential
real property if--
``(i) such improvement is made under or
pursuant to a lease (as defined in subsection
(h)(7))--
``(I) by the lessee (or any
sublessee) of such portion, or
``(II) by the lessor of such portion,
``(ii) such portion is to be occupied
exclusively by the lessee (or any sublessee) of
such portion, and
``(iii) such improvement is placed in service
more than 3 years after the date the building
was first placed in service.
``(B) Certain improvements not included.--Such term
shall not include any improvement for which the
expenditure is attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component benefiting a
common area, and
``(iv) the internal structural framework of
the building.
``(C) Definitions and special rules.--For purposes of
this paragraph--
``(i) Commitment to lease treated as lease.--
A commitment to enter into a lease shall be
treated as a lease, and the parties to such
commitment shall be treated as lessor and
lessee, respectively.
``(ii) Related persons.--A lease between
related persons shall not be considered a
lease. For purposes of the preceding sentence,
the term `related persons' means--
``(I) members of an affiliated group
(as defined in section 1504), and
``(II) persons having a relationship
described in subsection (b) of section
267; except that, for purposes of this
clause, the phrase `80 percent or more'
shall be substituted for the phrase
`more than 50 percent' each place it
appears in such subsection.
``(D) Improvements made by lessor.--
``(i) In general.--In the case of an
improvement made by the person who was the
lessor of such improvement when such
improvement was placed in service, such
improvement shall be qualified leasehold
improvement property (if at all) only so long
as such improvement is held by such person.
``(ii) Exception for changes in form of
business.--Property shall not cease to be
qualified leasehold improvement property under
clause (i) by reason of--
``(I) death,
``(II) a transaction to which section
381(a) applies, or
``(III) a mere change in the form of
conducting the trade or business so
long as the property is retained in
such trade or business as qualified
leasehold improvement property and the
taxpayer retains a substantial interest
in such trade or business.
``(iii) Treatment of failures to maintain
substantial interest in trade or business.--In
the case of property to which clause (ii)(III)
would apply but for the failure of the taxpayer
to retain a substantial interest in a trade or
business, the remaining adjusted basis of such
property shall be depreciated under this
section over 39 years.''
(c) Requirement To Use Straight Line Method.--Paragraph (3) of
section 168(b) is amended by adding at the end the following new
subparagraph:
``(G) Qualified leasehold improvement property
described in subsection (e)(6).''
(d) Alternative System.--The table contained in section 168(g)(3)(B)
is amended by adding at the end the following new item:
``(E)(iv).......................................... 15''.
(e) Effective Date.--The amendments made by this section shall apply
to qualified leasehold improvement property placed in service after
September 10, 2001.
TITLE III--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS
Subtitle A--Extensions
SEC. 301. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS AGAINST REGULAR
AND MINIMUM TAX LIABILITY.
(a) In General.--Paragraph (2) of section 26(a) is amended--
(1) by striking ``rule for 2000 and 2001.--'' and inserting
``rule for 2000, 2001, 2002, and 2003.--'', and
(2) by striking ``during 2000 or 2001,'' and inserting
``during 2000, 2001, 2002, or 2003,''.
(b) Conforming Amendments.--
(1) Section 904(h) is amended by striking ``during 2000 or
2001'' and inserting ``during 2000, 2001, 2002, or 2003''.
(2) The amendments made by sections 201(b), 202(f), and
618(b) of the Economic Growth and Tax Relief Reconciliation Act
of 2001 shall not apply to taxable years beginning during 2002
and 2003.
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 302. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) In General.--Section 30 is amended--
(1) in subsection (b)(2)--
(A) by striking ``December 31, 2001,'' and inserting
``December 31, 2003,'', and
(B) in subparagraphs (A), (B), and (C), by striking
``2002'', ``2003'', and ``2004'', respectively, and
inserting ``2004'', ``2005'', and ``2006'',
respectively, and
(2) in subsection (e), by striking ``December 31, 2004'' and
inserting ``December 31, 2006''.
(b) Conforming Amendments.--
(1) Subparagraph (C) of section 280F(a)(1) is amended by
adding at the end the following new clause:
``(iii) Application of subparagraph.--This
subparagraph shall apply to property placed in
service after August 5, 1997, and before
January 1, 2007.''
(2) Subsection (b) of section 971 of the Taxpayer Relief Act
of 1997 is amended by striking ``and before January 1, 2005''.
(c) Effective Date.--The amendments made by this section shall apply
to property placed in service after December 31, 2001.
SEC. 303. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE
RESOURCES.
(a) In General.--Subparagraphs (A), (B), and (C) of section 45(c)(3)
are both amended by striking ``2002'' and inserting ``2004''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to facilities placed in service after December 31, 2001.
SEC. 304. WORK OPPORTUNITY CREDIT.
(a) In General.--Subparagraph (B) of section 51(c)(4) is amended by
striking ``2001'' and inserting ``2003''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to individuals who begin work for the employer after December 31, 2001.
SEC. 305. WELFARE-TO-WORK CREDIT.
(a) In General.--Subsection (f) of section 51A is amended by striking
``2001'' and inserting ``2003''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to individuals who begin work for the employer after December 31, 2001.
SEC. 306. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN REFUELING
PROPERTY.
(a) In General.--Section 179A is amended--
(1) in subsection (b)(1)(B)--
(A) by striking ``December 31, 2001,'' and inserting
``December 31, 2003,'', and
(B) in clauses (i), (ii), and (iii), by striking
``2002'', ``2003'', and ``2004'', respectively, and
inserting ``2004'', ``2005'', and ``2006'',
respectively, and
(2) in subsection (f), by striking ``December 31, 2004'' and
inserting ``December 31, 2006''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to property placed in service after December 31, 2001.
SEC. 307. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR OIL AND
NATURAL GAS PRODUCED FROM MARGINAL PROPERTIES.
(a) In General.--Subparagraph (H) of section 613A(c)(6) is amended by
striking ``2002'' and inserting ``2004''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to taxable years beginning after December 31, 2001.
SEC. 308. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Paragraph (1) of section 1397E(e) is amended by
striking ``2000, and 2001'' and inserting ``2000, 2001, 2002, and
2003''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to obligations issued after the date of the enactment of this Act.
SEC. 309. COVER OVER OF TAX ON DISTILLED SPIRITS.
(a) In General.--Paragraph (1) of section 7652(f) is amended by
striking ``January 1, 2002'' and inserting ``January 1, 2004''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to articles brought into the United States after December 31, 2001.
SEC. 310. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH
BENEFITS.
(a) In General.--Subsection (f) of section 9812, as amended by the
Departments of Labor, Health and Human Services, and Education, and
Related Agencies Appropriations Act, 2002, is amended to read as
follows:
``(f) Application of Section.--This section shall not apply to
benefits for services furnished--
``(1) on or after September 30, 2001, and before January 10,
2002, and
``(2) after December 31, 2003.''
(b) Effective Date.--The amendment made by subsection (a) shall apply
to plan years beginning after December 31, 2000.
SEC. 311. TEMPORARY SPECIAL RULES FOR TAXATION OF LIFE INSURANCE
COMPANIES.
(a) Reduction in Mutual Life Insurance Company Deductions Not To
Apply in Certain Years.--Section 809 (relating to reduction in certain
deductions of material life insurance companies) is amended by adding
at the end the following:
``(j) Differential Earnings Rate Treated as Zero for Certain Years.--
Notwithstanding subsection (c) or (f), the differential earnings rate
shall be treated as zero for purposes of computing both the
differential earnings amount and the recomputed differential earnings
amount for a mutual life insurance company's taxable years beginning in
2001, 2002, or 2003.''
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2000.
SEC. 312. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.
(a) In General.--Paragraphs (2) and (3)(B) of section 220(i)
(defining cut-off year) are each amended by striking ``2002'' each
place it appears and inserting ``2003''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 220(j) is amended by striking
``1998, 1999, or 2001'' each place it appears and inserting
``1998, 1999, 2001, or 2002''.
(2) Subparagraph (A) of section 220(j)(4) is amended by
striking ``and 2001'' and inserting ``2001, and 2002''.
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 2002.
SEC. 313. INCENTIVES FOR INDIAN EMPLOYMENT AND PROPERTY ON INDIAN
RESERVATIONS.
(a) Employment.--Subsection (f) of section 45A is amended by striking
``December 31, 2003'' and inserting ``December 31, 2004''.
(b) Property.--Paragraph (8) of section 168(j) is amended by striking
``December 31, 2003'' and inserting ``December 31, 2004''.
SEC. 314. SUBPART F EXEMPTION FOR ACTIVE FINANCING.
(a) In General.--
(1) Section 953(e)(10) is amended--
(A) by striking ``January 1, 2002'' and inserting
``January 1, 2007'', and
(B) by striking ``December 31, 2001'' and inserting
``December 31, 2006''.
(2) Section 954(h)(9) is amended by striking ``January 1,
2002'' and inserting ``January 1, 2007''.
(b) Life Insurance and Annuity Contracts.--
(1) In general.--Subparagraph (B) of section 954(i)(4) is
amended to read as follows:
``(B) Life insurance and annuity contracts.--
``(i) In general.--Except as provided in
clause (ii), the amount of the reserve of a
qualifying insurance company or qualifying
insurance company branch for any life insurance
or annuity contract shall be equal to the
greater of--
``(I) the net surrender value of such
contract (as defined in section
807(e)(1)(A)), or
``(II) the reserve determined under
paragraph (5).
``(ii) Ruling request, etc.--The amount of
the reserve under clause (i) shall be the
foreign statement reserve for the contract
(less any catastrophe, deficiency,
equalization, or similar reserves), if,
pursuant to a ruling request submitted by the
taxpayer or as provided in published guidance,
the Secretary determines that the factors taken
into account in determining the foreign
statement reserve provide an appropriate means
of measuring income.''
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 315. REPEAL OF REQUIREMENT FOR APPROVED DIESEL OR KEROSENE
TERMINALS.
(a) In General.--Subsection (e) of section 4101 is hereby repealed.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect on January 1, 2002.
Subtitle B--Temporary Assistance for Needy Families
SEC. 321. REAUTHORIZATION OF TANF SUPPLEMENTAL GRANTS FOR POPULATION
INCREASES FOR FISCAL YEAR 2002.
Section 403(a)(3) of the Social Security Act (42 U.S.C. 603(a)(3)) is
amended by adding at the end the following:
``(H) Reauthorization of grants for fiscal year
2002.--Notwithstanding any other provision of this
paragraph--
``(i) any State that was a qualifying State
under this paragraph for fiscal year 2001 or
any prior fiscal year shall be entitled to
receive from the Secretary for fiscal year 2002
a grant in an amount equal to the amount
required to be paid to the State under this
paragraph for the most recent fiscal year in
which the State was a qualifying State;
``(ii) subparagraph (G) shall be applied as
if `2002' were substituted for `2001'; and
``(iii) out of any money in the Treasury of
the United States not otherwise appropriated,
there are appropriated for fiscal year 2002
such sums as are necessary for grants under
this subparagraph.''.
SEC. 322. 1-YEAR EXTENSION OF CONTINGENCY FUND UNDER THE TANF PROGRAM.
Section 403(b) of the Social Security Act (42 U.S.C. 603(b)) is
amended--
(1) in paragraph (2), by striking ``and 2001'' and inserting
``2001, and 2002''; and
(2) in paragraph (3)(C)(ii), by striking ``2001'' and
inserting ``2002''.
TITLE IV--TAX INCENTIVES FOR NEW YORK CITY AND DISTRESSED AREAS
SEC. 401. TAX BENEFITS FOR AREA OF NEW YORK CITY DAMAGED IN TERRORIST
ATTACKS ON SEPTEMBER 11, 2001.
(a) In General.--Chapter 1 is amended by adding at the end the
following new subchapter:
``Subchapter Y--New York Liberty Zone Benefits
``Sec. 1400L. Tax benefits for New York
Liberty Zone.
``SEC. 1400L. TAX BENEFITS FOR NEW YORK LIBERTY ZONE.
``(a) Expansion of Work Opportunity Tax Credit.--
``(1) In general.--For purposes of section 51, a New York
Liberty Zone business employee shall be treated as a member of
a targeted group.
``(2) New york liberty zone business employee.--For purposes
of this subsection--
``(A) In general.--The term `New York Liberty Zone
business employee' means, with respect to any period,
any employee of a New York Liberty Zone business if
substantially all the services performed during such
period by such employee for such business are performed
in the New York Liberty Zone.
``(B) Inclusion of certain employees outside the new
york liberty zone.--
``(i) In general.--In the case of a New York
Liberty Zone business described in subclause
(II) of subparagraph (C)(i), the term `New York
Liberty Zone business employee' includes any
employee of such business (not described in
subparagraph (A)) if substantially all the
services performed during such period by such
employee for such business are performed in the
City of New York, New York.
``(ii) Limitation.--The number of employees
of such a business that are treated as New York
Liberty zone business employees on any day by
reason of clause (i) shall not exceed the
excess of--
``(I) the number of employees of such
business on September 11, 2001, in the
New York Liberty Zone, over
``(II) the number of New York Liberty
Zone business employees (determined
without regard to this subparagraph) of
such business on the day to which the
limitation is being applied.
The Secretary may require any trade or business
to have the number determined under subclause
(I) verified by the New York State Department
of Labor.
``(C) New york liberty zone business.--
``(i) In general.--The term `New York Liberty
Zone business' means any trade or business
which is--
``(I) located in the New York Liberty
Zone, or
``(II) located in the City of New
York, New York, outside the New York
Liberty Zone, as a result of the
physical destruction or damage of such
place of business by the September 11,
2001, terrorist attack.
``(ii) Credit not allowed for large
businesses.--The term `New York Liberty Zone
business' shall not include any trade or
business for any taxable year if such trade or
business employed an average of more than 200
employees on business days during the taxable
year.
``(D) Special rules for determining amount of
credit.--For purposes of applying subpart F of part IV
of subchapter B of this chapter to wages paid or
incurred to any New York Liberty Zone business
employee--
``(i) section 51(a) shall be applied by
substituting `qualified wages' for `qualified
first-year wages',
``(ii) the rules of section 52 shall apply
for purposes of determining the number of
employees under subparagraph (B),
``(iii) subsections (c)(4) and (i)(2) of
section 51 shall not apply, and
``(iv) in determining qualified wages, the
following shall apply in lieu of section 51(b):
``(I) Qualified wages.--The term
`qualified wages' means wages paid or
incurred by the employer to individuals
who are New York Liberty Zone business
employees of such employer for work
performed during calendar year 2002 or
2003.
``(II) Only first $6,000 of wages per
calendar year taken into account.--The
amount of the qualified wages which may
be taken into account with respect to
any individual shall not exceed $6,000
per calendar year.
``(b) Special Allowance for Certain Property Acquired After September
10, 2001.--
``(1) Additional allowance.--In the case of any qualified New
York Liberty Zone property--
``(A) the depreciation deduction provided by section
167(a) for the taxable year in which such property is
placed in service shall include an allowance equal to
30 percent of the adjusted basis of such property, and
``(B) the adjusted basis of the qualified New York
Liberty Zone property shall be reduced by the amount of
such deduction before computing the amount otherwise
allowable as a depreciation deduction under this
chapter for such taxable year and any subsequent
taxable year.
``(2) Qualified new york liberty zone property.--For purposes
of this subsection--
``(A) In general.--The term `qualified New York
Liberty Zone property' means property--
``(i)(I) to which section 168 applies which
has a recovery period of 20 years or less or
which is water utility property,
``(II) which is computer software (as defined
in section 167(f)(1)(B)) for which a deduction
is allowable under section 167(a) without
regard to this subsection, or
``(III) which is nonresidential real
property, or residential rental property, which
is described in subparagraph (B),
``(ii) substantially all of the use of which
is in the New York Liberty Zone and is in the
active conduct of a trade or business by the
taxpayer in such Zone,
``(iii) the original use of which in the New
York Liberty Zone commences with the taxpayer
after September 10, 2001,
``(iv) which is acquired by the taxpayer by
purchase (as defined in section 179(d)) after
September 10, 2001, but only if no written
binding contract for the acquisition was in
effect before September 11, 2001, and
``(v) which is placed in service by the
taxpayer on or before the termination date.
The term `termination date' means December 31, 2006
(December 31, 2009, in the case of nonresidential real
property and residential rental property).
``(B) Eligible real property.--Nonresidential real
property or residential rental property is described in
this subparagraph only to the extent it rehabilitates
real property damaged, or replaces real property
destroyed or condemned, as a result of the September
11, 2001, terrorist attack. For purposes of the
preceding sentence, property shall be treated as
replacing real property destroyed or condemned if, as
part of an integrated plan, such property replaces real
property which is included in a continuous area which
includes real property destroyed or condemned.
``(C) Exceptions.--
``(i) Alternative depreciation property.--The
term `qualified New York Liberty Zone property'
shall not include any property to which the
alternative depreciation system under section
168(g) applies, determined--
``(I) without regard to paragraph (7)
of section 168(g) (relating to election
to have system apply), and
``(II) after application of section
280F(b) (relating to listed property
with limited business use).
``(ii) 30 percent additional allowance
property.--Such term shall not include property
to which section 168(k) applies.
``(iii) Qualified leasehold improvement
property.--Such term shall not include any
qualified leasehold improvement property (as
defined in section 168(e)(6)).
``(iv) Election out.--If a taxpayer makes an
election under this clause with respect to any
class of property for any taxable year, this
subsection shall not apply to all property in
such class placed in service during such
taxable year.
``(D) Special rules.--
``(i) Self-constructed property.--In the case
of a taxpayer manufacturing, constructing, or
producing property for the taxpayer's own use,
the requirements of clause (iv) of subparagraph
(A) shall be treated as met if the taxpayer
begins manufacturing, constructing, or
producing the property after September 10,
2001.
``(ii) Sale-leasebacks.--For purposes of
subparagraph (A)(iii), if property--
``(I) is originally placed in service
after September 10, 2001, by a person,
and
``(II) is sold and leased back by
such person within 3 months after the
date such property was originally
placed in service,
such property shall be treated as originally
placed in service not earlier than the date on
which such property is used under the leaseback
referred to in subclause (II).
``(E) Allowance against alternative minimum tax.--The
deduction allowed by this subsection shall be allowed
in determining alternative minimum taxable income under
section 55.
``(c) 5-Year Recovery Period for Depreciation of Certain Leasehold
Improvements.--
``(1) In general.--For purposes of section 168, the term `5-
year property' includes any qualified New York Liberty Zone
leasehold improvement property.
``(2) Qualified new york liberty zone leasehold improvement
property.--For purposes of this section, the term `qualified
New York Liberty Zone leasehold improvement property' means
qualified leasehold improvement property (as defined in section
168(e)(6)) if--
``(A) such building is located in the New York
Liberty Zone,
``(B) such improvement is placed in service after
September 10, 2001, and before January 1, 2007, and
``(C) no written binding contract for such
improvement was in effect before September 11, 2001.
``(3) Requirement to use straight line method.--The
applicable depreciation method under section 168 shall be the
straight line method in the case of qualified New York Liberty
Zone leasehold improvement property.
``(4) 9-year recovery period under alternative system.--For
purposes of section 168(g), the class life of qualified New
York Liberty Zone leasehold improvement property shall be 9
years.
``(d) Tax-Exempt Bond Financing.--
``(1) In general.--For purposes of this title, any qualified
New York Liberty Bond shall be treated as an exempt facility
bond.
``(2) Qualified new york liberty bond.--For purposes of this
subsection, the term `qualified New York Liberty Bond' means
any bond issued as part of an issue if--
``(A) 95 percent or more of the net proceeds (as
defined in section 150(a)(3)) of such issue are to be
used for qualified project costs,
``(B) such bond is issued by the State of New York or
any political subdivision thereof,
``(C) the Governor or the Mayor designates such bond
for purposes of this section, and
``(D) such bond is issued after the the date of the
enactment of this section and before January 1, 2005.
``(3) Limitations on amount of bonds.--
``(A) Aggregate amount designated.--The maximum
aggregate face amount of bonds which may be designated
under this subsection shall not exceed $8,000,000,000,
of which not to exceed $4,000,000,000 may be designated
by the Governor and not to exceed $4,000,000,000 may be
designated by the Mayor.
``(B) Specific limitations.--The aggregate face
amount of bonds issued which are to be used for--
``(i) costs for property located outside the
New York Liberty Zone shall not exceed
$2,000,000,000,
``(ii) residential rental property shall not
exceed $1,600,000,000, and
``(iii) costs with respect to property used
for retail sales of tangible property and
functionally related and subordinate property
shall not exceed $800,000,000.
The limitations under clauses (i), (ii), and (iii)
shall be allocated proportionately between the bonds
designated by the Governor and the bonds designated by
the Mayor in proportion to the respective amounts of
bonds designated by each.
``(C) Movable property.--No bonds shall be issued
which are to be used for movable fixtures and
equipment.
``(4) Qualified project costs.--For purposes of this
subsection--
``(A) In general.--The term `qualified project costs'
means the cost of acquisition, construction,
reconstruction, and renovation of--
``(i) nonresidential real property and
residential rental property (including fixed
tenant improvements associated with such
property) located in the New York Liberty Zone,
and
``(ii) public utility property (as defined in
section 168(i)(10)) located in the New York
Liberty Zone.
``(B) Costs for certain property outside zone
included.--Such term includes the cost of acquisition,
construction, reconstruction, and renovation of
nonresidential real property (including fixed tenant
improvements associated with such property) located
outside the New York Liberty Zone but within the City
of New York, New York, if such property is part of a
project which consists of at least 100,000 square feet
of usable office or other commercial space located in a
single building or multiple adjacent buildings.
``(5) Special rules.--In applying this title to any qualified
New York Liberty Bond, the following modifications shall apply:
``(A) Section 146 (relating to volume cap) shall not
apply.
``(B) Section 147(d) (relating to acquisition of
existing property not permitted) shall be applied by
substituting `50 percent' for `15 percent' each place
it appears.
``(C) Section 148(f)(4)(C) (relating to exception
from rebate for certain proceeds to be used to finance
construction expenditures) shall apply to the available
construction proceeds of bonds issued under this
section.
``(D) Repayments of principal on financing provided
by the issue--
``(i) may not be used to provide financing,
and
``(ii) must be used not later than the close
of the 1st semiannual period beginning after
the date of the repayment to redeem bonds which
are part of such issue.
The requirement of clause (ii) shall be treated as met
with respect to amounts received within 10 years after
the date of issuance of the issue (or, in the case of a
refunding bond, the date of issuance of the original
bond) if such amounts are used by the close of such 10
years to redeem bonds which are part of such issue.
``(E) Section 57(a)(5) shall not apply.
``(6) Separate issue treatment of portions of an issue.--This
subsection shall not apply to the portion of an issue which (if
issued as a separate issue) would be treated as a qualified
bond or as a bond that is not a private activity bond
(determined without regard to paragraph (1)), if the issuer
elects to so treat such portion.
``(e) Advance Refundings of Certain Tax-Exempt Bonds.--
``(1) In general.--With respect to a bond described in
paragraph (2) issued as part of an issue 90 percent (95 percent
in the case of a bond described in paragraph (2)(C)) or more of
the net proceeds (as defined in section 150(a)(3)) of which
were used to finance facilities located within the City of New
York, New York (or property which is functionally related and
subordinate to facilities located within the City of New York
for the furnishing of water), one additional advanced refunding
after the date of the enactment of this section and before
January 1, 2005, shall be allowed under the applicable rules of
section 149(d) if--
``(A) the Governor or the Mayor designates the
advance refunding bond for purposes of this subsection,
and
``(B) the requirements of paragraph (4) are met.
``(2) Bonds described.--A bond is described in this paragraph
if such bond was outstanding on September 11, 2001, and is--
``(A) a State or local bond (as defined in section
103(c)(1)) which is a general obligation of the City of
New York, New York,
``(B) a State or local bond (as so defined) other
than a private activity bond (as defined in section
141(a)) issued by the New York Municipal Water Finance
Authority or the Metropolitan Transportation Authority
of the State of New York, or
``(C) a qualified 501(c)(3) bond (as defined in
section 145(a)) which is a qualified hospital bond (as
defined in section 145(c)) issued by or on behalf of
the State of New York or the City of New York, New
York.
``(3) Aggregate limit.--For purposes of paragraph (1), the
maximum aggregate face amount of bonds which may be designated
under this subsection by the Governor shall not exceed
$4,500,000,000 and the maximum aggregate face amount of bonds
which may be designated under this subsection by the Mayor
shall not exceed $4,500,000,000.
``(4) Additional requirements.--The requirements of this
paragraph are met with respect to any advance refunding of a
bond described in paragraph (2) if--
``(A) no advance refundings of such bond would be
allowed under any provision of law after September 11,
2001,
``(B) the advance refunding bond is the only other
outstanding bond with respect to the refunded bond, and
``(C) the requirements of section 148 are met with
respect to all bonds issued under this subsection.
``(f) Increase in Expensing Under Section 179.--
``(1) In general.--For purposes of section 179--
``(A) the limitation under section 179(b)(1) shall be
increased by the lesser of--
``(i) $35,000, or
``(ii) the cost of section 179 property which
is qualified New York Liberty Zone property
placed in service during the taxable year, and
``(B) the amount taken into account under section
179(b)(2) with respect to any section 179 property
which is qualified New York Liberty Zone property shall
be 50 percent of the cost thereof.
``(2) Qualified new york liberty zone property.--For purposes
of this subsection, the term `qualified New York Liberty Zone
property' has the meaning given such term by subsection (b)(2).
``(3) Recapture.--Rules similar to the rules under section
179(d)(10) shall apply with respect to any qualified New York
Liberty Zone property which ceases to be used in the New York
Liberty Zone.
``(g) Extension of Replacement Period for Nonrecognition of Gain.--
Notwithstanding subsections (g) and (h) of section 1033, clause (i) of
section 1033(a)(2)(B) shall be applied by substituting `5 years' for `2
years' with respect to property which is compulsorily or involuntarily
converted as a result of the terrorist attacks on September 11, 2001,
in the New York Liberty Zone but only if substantially all of the use
of the replacement property is in the City of New York, New York.
``(h) New York Liberty Zone.--For purposes of this section, the term
`New York Liberty Zone' means the area located on or south of Canal
Street, East Broadway (east of its intersection with Canal Street), or
Grand Street (east of its intersection with East Broadway) in the
Borough of Manhattan in the City of New York, New York.
``(i) References to Governor and Mayor.--For purposes of this
section, the terms `Governor' and `Mayor' mean the Governor of the
State of New York and the Mayor of the City of New York, New York,
respectively.''
(b) Credit Allowed Against Regular and Minimum Tax.--
(1) In general.--Subsection (c) of section 38 (relating to
limitation based on amount of tax) is amended by redesignating
paragraph (3) as paragraph (4) and by inserting after paragraph
(2) the following new paragraph:
``(3) Special rules for new york liberty zone business
employee credit.--
``(A) In general.--In the case of the New York
Liberty Zone business employee credit--
``(i) this section and section 39 shall be
applied separately with respect to such credit,
and
``(ii) in applying paragraph (1) to such
credit--
``(I) the tentative minimum tax shall
be treated as being zero, and
``(II) the limitation under paragraph
(1) (as modified by subclause (I))
shall be reduced by the credit allowed
under subsection (a) for the taxable
year (other than the New York Liberty
Zone business employee credit).
``(B) New york liberty zone business employee
credit.--For purposes of this subsection, the term `New
York Liberty Zone business employee credit' means the
portion of work opportunity credit under section 51
determined under section 1400L(a).''
(2) Conforming amendment.--Subclause (II) of section
38(c)(2)(A)(ii) is amended by inserting ``or the New York
Liberty Zone business employee credit'' after ``employment
credit''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years ending after December 31, 2001.
(c) Clerical Amendment.--The table of subchapters for chapter 1 is
amended by adding at the end the following new item:
``Subchapter Y--New York Liberty Zone
Benefits.''
TITLE V--MISCELLANEOUS AND TECHNICAL PROVISIONS
Subtitle A--General Miscellaneous Provisions
SEC. 501. ALLOWANCE OF ELECTRONIC 1099'S.
Any person required to furnish a statement under any section of
subpart B of part III of subchapter A of chapter 61 of the Internal
Revenue Code of 1986 for any taxable year ending after the date of the
enactment of this Act, may electronically furnish such statement
(without regard to any first class mailing requirement) to any
recipient who has consented to the electronic provision of the
statement in a manner similar to the one permitted under regulations
issued under section 6051 of such Code or in such other manner as
provided by the Secretary.
SEC. 502. EXCLUDED CANCELLATION OF INDEBTEDNESS INCOME OF S CORPORATION
NOT TO RESULT IN ADJUSTMENT TO BASIS OF STOCK OF
SHAREHOLDERS.
(a) In General.--Subparagraph (A) of section 108(d)(7) (relating to
certain provisions to be applied at corporate level) is amended by
inserting before the period ``, including by not taking into account
under section 1366(a) any amount excluded under subsection (a) of this
section''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by this section shall apply to discharges of
indebtedness after October 11, 2001, in taxable years ending
after such date.
(2) Exception.--The amendment made by this section shall not
apply to any discharge of indebtedness before March 1, 2002,
pursuant to a plan of reorganization filed with a bankruptcy
court on or before October 11, 2001.
SEC. 503. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD OF
ACCOUNTING.
(a) In General.--Paragraph (5) of section 448(d) is amended to read
as follows:
``(5) Special rule for certain services.--
``(A) In general.--In the case of any person using an
accrual method of accounting with respect to amounts to
be received for the performance of services by such
person, such person shall not be required to accrue any
portion of such amounts which (on the basis of such
person's experience) will not be collected if--
``(i) such services are in fields referred to
in paragraph (2)(A), or
``(ii) such person meets the gross receipts
test of subsection (c) for all prior taxable
years.
``(B) Exception.--This paragraph shall not apply to
any amount if interest is required to be paid on such
amount or there is any penalty for failure to timely
pay such amount.
``(C) Regulations.--The Secretary shall prescribe
regulations to permit taxpayers to determine amounts
referred to in subparagraph (A) using computations or
formulas which, based on experience, accurately reflect
the amount of income that will not be collected by such
person. A taxpayer may adopt, or request consent of the
Secretary to change to, a computation or formula that
clearly reflects the taxpayer's experience. A request
under the preceding sentence shall be approved if such
computation or formula clearly reflects the taxpayer's
experience.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment
of this Act.
(2) Change in method of accounting.--In the case of any
taxpayer required by the amendments made by this section to
change its method of accounting for its first taxable year
ending after the date of the enactment of this Act--
(A) such change shall be treated as initiated by the
taxpayer,
(B) such change shall be treated as made with the
consent of the Secretary of the Treasury, and
(C) the net amount of the adjustments required to be
taken into account by the taxpayer under section 481 of
the Internal Revenue Code of 1986 shall be taken into
account over a period of 4 years (or if less, the
number of taxable years that the taxpayer used the
method permitted under section 448(d)(5) of such Code
as in effect before the date of the enactment of this
Act) beginning with such first taxable year.
SEC. 504. EXCLUSION FOR FOSTER CARE PAYMENTS TO APPLY TO PAYMENTS BY
QUALIFIED PLACEMENT AGENCIES.
(a) In General.--The matter preceding subparagraph (B) of section
131(b)(1) (defining qualified foster care payment) is amended to read
as follows:
``(1) In general.--The term `qualified foster care payment'
means any payment made pursuant to a foster care program of a
State or political subdivision thereof--
``(A) which is paid by--
``(i) a State or political subdivision
thereof, or
``(ii) a qualified foster care placement
agency, and''.
(b) Qualified Foster Individuals To Include Individuals Placed by
Qualified Placement Agencies.--Subparagraph (B) of section 131(b)(2)
(defining qualified foster individual) is amended to read as follows:
``(B) a qualified foster care placement agency.''
(c) Qualified Foster Care Placement Agency Defined.--Subsection (b)
of section 131 is amended by redesignating paragraph (3) as paragraph
(4) and by inserting after paragraph (2) the following new paragraph:
``(3) Qualified foster care placement agency.--The term
`qualified foster care placement agency' means any placement
agency which is licensed or certified by--
``(A) a State or political subdivision thereof, or
``(B) an entity designated by a State or political
subdivision thereof,
for the foster care program of such State or political
subdivision to make foster care payments to providers of foster
care.''
(d) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 505. INTEREST RATE RANGE FOR ADDITIONAL FUNDING REQUIREMENTS.
(a) Amendments to the Internal Revenue Code of 1986.--
(1) Special rule.--Clause (i) of section 412(l)(7)(C)
(relating to interest rate) is amended by adding at the end the
following new subclause:
``(III) Special rule for 2002 and
2003.--For a plan year beginning in
2002 or 2003, notwithstanding subclause
(I), in the case that the rate of
interest used under subsection (b)(5)
exceeds the highest rate permitted
under subclause (I), the rate of
interest used to determine current
liability under this subsection may
exceed the rate of interest otherwise
permitted under subclause (I); except
that such rate of interest shall not
exceed 120 percent of the weighted
average referred to in subsection
(b)(5)(B)(ii).''
(2) Quarterly contributions.--Subsection (m) of section 412
is amended by adding at the end the following new paragraph:
``(7) Special rules for 2002 and 2004.--In any case in which
the interest rate used to determine current liability is
determined under subsection (l)(7)(C)(i)(III)--
``(A) 2002.--For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2002, the
current liability for the preceding plan year shall be
redetermined using 120 percent as the specified
percentage determined under subsection
(l)(7)(C)(i)(II).
``(B) 2004.--For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2004, the
current liability for the preceding plan year shall be
redetermined using 105 percent as the specified
percentage determined under subsection
(l)(7)(C)(i)(II).''
(b) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) Special rule.--Clause (i) of section 302(d)(7)(C) of such
Act (29 U.S.C. 1082(d)(7)(C)) is amended by adding at the end
the following new subclause:
``(III) Special rule for 2002 and
2003.--For a plan year beginning in
2002 or 2003, notwithstanding subclause
(I), in the case that the rate of
interest used under subsection (b)(5)
exceeds the highest rate permitted
under subclause (I), the rate of
interest used to determine current
liability under this subsection may
exceed the rate of interest otherwise
permitted under subclause (I); except
that such rate of interest shall not
exceed 120 percent of the weighted
average referred to in subsection
(b)(5)(B)(ii).''
(2) Quarterly contributions.--Subsection (e) of section 302
of such Act (29 U.S.C. 1082) is amended by adding at the end
the following new paragraph:
``(7) Special rules for 2002 and 2004.--In any case in which
the interest rate used to determine current liability is
determined under subsection (d)(7)(C)(i)(III)--
``(A) 2002.--For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2002, the
current liability for the preceding plan year shall be
redetermined using 120 percent as the specified
percentage determined under subsection
(d)(7)(C)(i)(II).
``(B) 2004.--For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2004, the
current liability for the preceding plan year shall be
redetermined using 105 percent as the specified
percentage determined under subsection
(d)(7)(C)(i)(II).''
(c) PBGC.--Clause (iii) of section 4006(a)(3)(E) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)(E)) is
amended by adding at the end the following new subclause:
``(IV) In the case of plan years beginning after December 31, 2001,
and before January 1, 2004, subclause (II) shall be applied by
substituting `100 percent' for `85 percent'. Subclause (III) shall be
applied for such years without regard to the preceding sentence. Any
reference to this clause by any other sections or subsections shall be
treated as a reference to this clause without regard to this
subclause.''
SEC. 506. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO ACCOUNT
CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL
TEACHERS.
(a) In General.--Section 62(a)(2) (relating to certain trade and
business deductions of employees) is amended by adding at the end the
following:
``(D) Certain expenses of elementary and secondary
school teachers.--In the case of taxable years
beginning during 2002 or 2003, the deductions allowed
by section 162 which consist of expenses, not in excess
of $250, paid or incurred by an eligible educator in
connection with books, supplies (other than nonathletic
supplies for courses of instruction in health or
physical education), computer equipment (including
related software and services) and other equipment, and
supplementary materials used by the eligible educator
in the classroom.''.
(b) Eligible Educator.--Section 62 is amended by adding at the end
the following:
``(d) Definition; Special Rules.--
``(1) Eligible educator.--
``(A) In general.--For purposes of subsection
(a)(2)(D), the term `eligible educator' means, with
respect to any taxable year, an individual who is a
kindergarten through grade 12 teacher, instructor,
counselor, principal, or aide in a school for at least
900 hours during a school year.
``(B) School.--The term `school' means any school
which provides elementary education or secondary
education (kindergarten through grade 12), as
determined under State law.
``(2) Coordination with exclusions.--A deduction shall be
allowed under subsection (a)(2)(D) for expenses only to the
extent the amount of such expenses exceeds the amount
excludable under section 135, 529(c)(1), or 530(d)(2) for the
taxable year.''.
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
Subtitle B--Technical Corrections
SEC. 511. AMENDMENTS RELATED TO ECONOMIC GROWTH AND TAX RELIEF
RECONCILIATION ACT OF 2001.
(a) Amendments Related to Section 101 of the Act.--
(1) In general.--Subsection (b) of section 6428 is amended to
read as follows:
``(b) Credit Treated as Nonrefundable Personal Credit.--For purposes
of this title, the credit allowed under this section shall be treated
as a credit allowable under subpart A of part IV of subchapter A of
chapter 1.''.
(2) Conforming amendments.--
(A) Subsection (d) of section 6428 is amended to read
as follows:
``(d) Coordination with Advance Refunds of Credit.--
``(1) In general.--The amount of credit which would (but for
this paragraph) be allowable under this section shall be
reduced (but not below zero) by the aggregate refunds and
credits made or allowed to the taxpayer under subsection (e).
Any failure to so reduce the credit shall be treated as arising
out of a mathematical or clerical error and assessed according
to section 6213(b)(1).
``(2) Joint returns.--In the case of a refund or credit made
or allowed under subsection (e) with respect to a joint return,
half of such refund or credit shall be treated as having been
made or allowed to each individual filing such return.''.
(B) Paragraph (2) of section 6428(e) is amended to
read as follows:
``(2) Advance refund amount.--For purposes of paragraph (1),
the advance refund amount is the amount that would have been
allowed as a credit under this section for such first taxable
year if--
``(A) this section (other than subsections (b) and
(d) and this subsection) had applied to such taxable
year, and
``(B) the credit for such taxable year were not
allowed to exceed the excess (if any) of--
``(i) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax
imposed by section 55, over
``(ii) the sum of the credits allowable under
part IV of subchapter A of chapter 1 (other
than the credits allowable under subpart C
thereof, relating to refundable credits).''
(b) Amendment Related to Section 201 of the Act.--Subparagraph (B) of
section 24(d)(1) is amended by striking ``amount of credit allowed by
this section'' and inserting ``aggregate amount of credits allowed by
this subpart''.
(c) Amendments Related to Section 202 of the Act.--
(1) Corrections to credit for adoption expenses.--
(A) Paragraph (1) of section 23(a) is amended to read
as follows:
``(1) In general.--In the case of an individual, there shall
be allowed as a credit against the tax imposed by this chapter
the amount of the qualified adoption expenses paid or incurred
by the taxpayer.''
(B) Subsection (a) of section 23 is amended by adding
at the end the following new paragraph:
``(3) $10,000 credit for adoption of child with special needs
regardless of expenses.--In the case of an adoption of a child
with special needs which becomes final during a taxable year,
the taxpayer shall be treated as having paid during such year
qualified adoption expenses with respect to such adoption in an
amount equal to the excess (if any) of $10,000 over the
aggregate qualified adoption expenses actually paid or incurred
by the taxpayer with respect to such adoption during such
taxable year and all prior taxable years.''
(C) Paragraph (2) of section 23(a) is amended by
striking the last sentence.
(D) Paragraph (1) of section 23(b) is amended by
striking ``subsection (a)(1)(A)'' and inserting
``subsection (a)''.
(E) Subsection (i) of section 23 is amended by
striking ``the dollar limitation in subsection (b)(1)''
and inserting ``the dollar amounts in subsections
(a)(3) and (b)(1)''.
(F) Expenses paid or incurred during any taxable year
beginning before January 1, 2002, may be taken into
account in determining the credit under section 23 of
the Internal Revenue Code of 1986 only to the extent
the aggregate of such expenses does not exceed the
applicable limitation under section 23(b)(1) of such
Code as in effect on the day before the date of the
enactment of the Economic Growth and Tax Relief
Reconciliation Act of 2001.
(2) Corrections to exclusion for employer-provided adoption
assistance.--
(A) Subsection (a) of section 137 is amended to read
as follows:
``(a) Exclusion.--
``(1) In general.--Gross income of an employee does not
include amounts paid or expenses incurred by the employer for
qualified adoption expenses in connection with the adoption of
a child by an employee if such amounts are furnished pursuant
to an adoption assistance program.
``(2) $10,000 exclusion for adoption of child with special
needs regardless of expenses.--In the case of an adoption of a
child with special needs which becomes final during a taxable
year, the qualified adoption expenses with respect to such
adoption for such year shall be increased by an amount equal to
the excess (if any) of $10,000 over the actual aggregate
qualified adoption expenses with respect to such adoption
during such taxable year and all prior taxable years.''
(B) Paragraph (2) of section 137(b) is amended by
striking ``subsection (a)(1)'' and inserting
``subsection (a)''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2002;
except that the amendments made by paragraphs (1)(C), (1)(D),
and (2)(B) shall apply to taxable years beginning after
December 31, 2001.
(d) Amendments Related to Section 205 of the Act.--
(1) Section 45F(d)(4)(B) is amended by striking ``subpart A,
B, or D of this part'' and inserting ``this chapter or for
purposes of section 55''.
(2) Section 38(b)(15) is amended by striking ``45F'' and
inserting ``45F(a)''.
(e) Amendments Related to Section 301 of the Act.--
(1) Section 63(c)(2) is amended--
(A) in subparagraph (A), by striking ``subparagraph
(C)'' and inserting ``subparagraph (D)'',
(B) by striking ``or'' at the end of subparagraph
(B),
(C) by redesignating subparagraph (C) as subparagraph
(D),
(D) by inserting after subparagraph (B) the following
new subparagraph:
``(C) one-half of the amount allowable under
subparagraph (A) in the case of a married individual
filing a separate return, or'', and
(E) by inserting the following flush sentence at the
end:
``If any amount determined under subparagraph (A) is
not a multiple of $50, such amount shall be rounded to
the next lowest multiple of $50.''
(2)(A) Section 63(c)(4) is amended by striking ``paragraph
(2) or (5)'' and inserting ``paragraph (2)(B), (2)(D), or
(5)''.
(B) Section 63(c)(4)(B)(i) is amended by striking ``paragraph
(2)'' and inserting ``paragraph (2)(B), (2)(D),''.
(C) Section 63(c)(4) is amended by striking the flush
sentence at the end (as added by section 301(c)(2) of Public
Law 107-17).
(f) Amendment Related to Section 401 of the Act.--Section
530(d)(4)(B)(iv) is amended by striking ``because the taxpayer elected
under paragraph (2)(C) to waive the application of paragraph (2)'' and
inserting ``by application of paragraph (2)(C)(i)(II)''.
(g) Amendments Related to Section 511 of the Act.--
(1) Section 2511(c) is amended by striking ``taxable gift
under section 2503,'' and inserting ``transfer of property by
gift,''.
(2) Section 2101(b) is amended by striking the last sentence.
(h) Amendment Related to Section 532 of the Act.--Section 2016 is
amended by striking ``any State, any possession of the United States,
or the District of Columbia,''.
(i) Amendments Relating to Section 602 of the Act.--
(1) Subparagraph (A) of section 408(q)(3) is amended to read
as follows:
``(A) Qualified employer plan.--The term `qualified
employer plan' has the meaning given such term by
section 72(p)(4)(A)(i); except that such term shall
also include an eligible deferred compensation plan (as
defined in section 457(b)) of an eligible employer
described in section 457(e)(1)(A).''.
(2) Section 4(c) of Employee Retirement Income Security Act
of 1974 is amended--
(A) by inserting ``and part 5 (relating to
administration and enforcement)'' before the period at
the end, and
(B) by adding at the end the following new sentence:
``Such provisions shall apply to such accounts and
annuities in a manner similar to their application to a
simplified employee pension under section 408(k) of the
Internal Revenue Code of 1986.''.
(j) Amendments Relating to Section 611 of the Act.--
(1) Section 408(k) is amended--
(A) in paragraph (2)(C) by striking ``$300'' and
inserting ``$450'', and
(B) in paragraph (8) by striking ``$300'' both places
it appears and inserting ``$450''.
(2) Section 409(o)(1)(C)(ii) is amended--
(A) by striking ``$500,000'' both places it appears
and inserting ``$800,000'', and
(B) by striking ``$100,000'' and inserting
``$160,000''.
(3) Section 611(i) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by adding at the end the
following new paragraph:
``(3) Special rule.--In the case of plan that, on June 7,
2001, incorporated by reference the limitation of section
415(b)(1)(A) of the Internal Revenue Code of 1986, section
411(d)(6) of such Code and section 204(g)(1) of the Employee
Retirement Income Security Act of 1974 do not apply to a plan
amendment that--
``(A) is adopted on or before June 30, 2002,
``(B) reduces benefits to the level that would have
applied without regard to the amendments made by
subsection (a) of this section, and
``(C) is effective no earlier than the years
described in paragraph (2).''.
(k) Amendments Relating to Section 613 of the Act.--
(1) Section 416(c)(1)(C)(iii) is amended by striking
``Exception for frozen plan'' and inserting ``Exception for
plan under which no key employee (or former key employee)
benefits for plan year''.
(2) Section 416(g)(3)(B) is amended by striking ``separation
from service'' and inserting ``severance from employment''.
(l) Amendments Relating to Sections 614 and 616 of the Act.--
(1) Section 404(a)(12) is amended by striking ``(9),'' and
inserting ``(9) and subsection (h)(1)(C),''.
(2) Section 404(n) is amended by striking ``subsection (a),''
and inserting ``subsection (a) or paragraph (1)(C) of
subsection (h)''.
(3) Section 402(h)(2)(A) is amended by striking ``15
percent'' and inserting ``25 percent''.
(4) Section 404(a)(7)(C) is amended to read as follows:
``(C) Paragraph not to apply in certain cases.--
``(i) Beneficiary test.--This paragraph shall
not have the effect of reducing the amount
otherwise deductible under paragraphs (1), (2),
and (3), if no employee is a beneficiary under
more than 1 trust or under a trust and an
annuity plan.
``(ii) Elective deferrals.--If, in connection
with 1 or more defined contribution plans and 1
or more defined benefit plans, no amounts
(other than elective deferrals (as defined in
section 402(g)(3))) are contributed to any of
the defined contribution plans for the taxable
year, then subparagraph (A) shall not apply
with respect to any of such defined
contribution plans and defined benefit
plans.''.
(m) Amendment Relating to Section 618 of the Act.--Section
25B(d)(2)(A) is amended to read as follows:
``(A) In general.--The qualified retirement savings
contributions determined under paragraph (1) shall be
reduced (but not below zero) by the aggregate
distributions received by the individual during the
testing period from any entity of a type to which
contributions under paragraph (1) may be made. The
preceding sentence shall not apply to the portion of
any distribution which is not includible in gross
income by reason of a trustee-to-trustee transfer or a
rollover distribution.''.
(n) Amendments Relating to Section 619 of the Act.--
(1) Section 45E(e)(1) is amended by striking ``(n)'' and
inserting ``(m)''.
(2) Section 619(d) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by striking
``established'' and inserting ``first effective''.
(o) Amendments Relating to Section 631 of the Act.--
(1) Section 402(g)(1) is amended by adding at the end the
following:
``(C) Catch-up contributions.--In addition to
subparagraph (A), in the case of an eligible
participant (as defined in section 414(v)), gross
income shall not include elective deferrals in excess
of the applicable dollar amount under subparagraph (B)
to the extent that the amount of such elective
deferrals does not exceed the applicable dollar amount
under section 414(v)(2)(B)(i) for the taxable year
(without regard to the treatment of the elective
deferrals by an applicable employer plan under section
414(v)).''.
(2) Section 401(a)(30) is amended by striking ``402(g)(1)''
and inserting ``402(g)(1)(A)''.
(3) Section 414(v)(2) is amended by adding at the end the
following:
``(D) Aggregation of plans.--For purposes of this
paragraph, plans described in clauses (i), (ii), and
(iv) of paragraph (6)(A) that are maintained by the
same employer (as determined under subsection (b), (c),
(m) or (o)) shall be treated as a single plan, and
plans described in clause (iii) of paragraph (6)(A)
that are maintained by the same employer shall be
treated as a single plan.''.
(4) Section 414(v)(3)(A)(i) is amended by striking ``section
402(g), 402(h), 403(b), 404(a), 404(h), 408(k), 408(p), 415, or
457'' and inserting ``section 401(a)(30), 402(h), 403(b), 408,
415(c), and 457(b)(2) (determined without regard to section
457(b)(3))''.
(5) Section 414(v)(3)(B) is amended by striking ``section
401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),
403(b)(12), 408(k), 408(p), 408B, 410(b), or 416'' and
inserting ``section 401(a)(4), 401(k)(3), 401(k)(11),
403(b)(12), 408(k), 410(b), or 416''.
(6) Section 414(v)(4)(B) is amended by inserting before the
period at the end the following: ``, except that a plan
described in clause (i) of section 410(b)(6)(C) shall not be
treated as a plan of the employer until the expiration of the
transition period with respect to such plan (as determined
under clause (ii) of such section)''.
(7) Section 414(v)(5) is amended--
(A) by striking ``, with respect to any plan year,''
in the matter preceding subparagraph (A),
(B) by amending subparagraph (A) to read as follows:
``(A) who would attain age 50 by the end of the
taxable year,'', and
(C) in subparagraph (B) by striking ``plan year'' and
inserting ``plan (or other applicable) year''.
(8) Section 414(v)(6)(C) is amended to read as follows:
``(C) Exception for section 457 plans.--This
subsection shall not apply to a participant for any
year for which a higher limitation applies to the
participant under section 457(b)(3).''.
(9) Section 457(e) is amended by adding at the end the
following new paragraph:
``(18) Coordination with catch-up contributions for
individuals age 50 or older.-- In the case of an individual who
is an eligible participant (as defined by section 414(v)) and
who is a participant in an eligible deferred compensation plan
of an employer described in paragraph (1)(A), subsections
(b)(3) and (c) shall be applied by substituting for the amount
otherwise determined under the applicable subsection the
greater of--
``(A) the sum of--
``(i) the plan ceiling established for
purposes of subsection (b)(2) (without regard
to subsection (b)(3)), plus
``(ii) the applicable dollar amount for the
taxable year determined under section
414(v)(2)(B)(i), or
``(B) the amount determined under the applicable
subsection (without regard to this paragraph).''.
(p) Amendments Relating to Section 632 of the Act.--
(1) Section 403(b)(1) is amended in the matter following
subparagraph (E) by striking ``then amounts contributed'' and
all that follows and inserting the following:
``then contributions and other additions by such employer for
such annuity contract shall be excluded from the gross income
of the employee for the taxable year to the extent that the
aggregate of such contributions and additions (when expressed
as an annual addition (within the meaning of section
415(c)(2))) does not exceed the applicable limit under section
415. The amount actually distributed to any distributee under
such contract shall be taxable to the distributee (in the year
in which so distributed) under section 72 (relating to
annuities). For purposes of applying the rules of this
subsection to contributions and other additions by an employer
for a taxable year, amounts transferred to a contract described
in this paragraph by reason of a rollover contribution
described in paragraph (8) of this subsection or section
408(d)(3)(A)(ii) shall not be considered contributed by such
employer.''.
(2) Section 403(b) is amended by striking paragraph (6).
(3) Section 403(b)(3) is amended--
(A) in the first sentence by inserting the following
before the period at the end: ``, and which precedes
the taxable year by no more than five years'', and
(B) in the second sentence by striking ``or any
amount received by a former employee after the fifth
taxable year following the taxable year in which such
employee was terminated''.
(4) Section 415(c)(7) is amended to read as follows:
``(7) Special rules relating to church plans.--
``(A) Alternative contribution limitation.--
``(i) In general.--Notwithstanding any other
provision of this subsection, at the election
of a participant who is an employee of a church
or a convention or association of churches,
including an organization described in section
414(e)(3)(B)(ii), contributions and other
additions for an annuity contract or retirement
income account described in section 403(b) with
respect to such participant, when expressed as
an annual addition to such participant's
account, shall be treated as not exceeding the
limitation of paragraph (1) if such annual
addition is not in excess of $10,000.
``(ii) $40,000 aggregate limitation.--The
total amount of additions with respect to any
participant which may be taken into account for
purposes of this subparagraph for all years may
not exceed $40,000.
``(B) Number of years of service for duly ordained,
commissioned, or licensed ministers or lay employees.--
For purposes of this paragraph--
``(i) all years of service by--
``(I) a duly ordained, commissioned,
or licensed minister of a church, or
``(II) a lay person,
as an employee of a church, a convention or
association of churches, including an
organization described in section
414(e)(3)(B)(ii), shall be considered as years
of service for 1 employer, and
``(ii) all amounts contributed for annuity
contracts by each such church (or convention or
association of churches) or such organization
during such years for such minister or lay
person shall be considered to have been
contributed by 1 employer.
``(C) Foreign missionaries.--In the case of any
individual described in subparagraph (D) performing
services outside the United States, contributions and
other additions for an annuity contract or retirement
income account described in section 403(b) with respect
to such employee, when expressed as an annual addition
to such employee's account, shall not be treated as
exceeding the limitation of paragraph (1) if such
annual addition is not in excess of the greater of
$3,000 or the employee's includible compensation
determined under section 403(b)(3).
``(D) Annual addition.--For purposes of this
paragraph, the term `annual addition' has the meaning
given such term by paragraph (2).
``(E) Church, convention or association of
churches.--For purposes of this paragraph, the terms
`church' and `convention or association of churches'
have the same meaning as when used in section
414(e).''.
(5) Section 457(e)(5) is amended to read as follows:
``(5) Includible compensation.--The term `includible
compensation' has the meaning given to the term `participant's
compensation' by section 415(c)(3).''.
(6) Section 402(g)(7)(B) is amended by striking ``2001.'' and
inserting ``2001).''.
(q) Amendments Relating to Section 643 of the Act.--
(1) Section 401(a)(31)(C)(i) is amended by inserting ``is a
qualified trust which is part of a plan which is a defined
contribution plan and'' before ``agrees''.
(2) Section 402(c)(2) is amended by adding at the end the
following flush sentence:
``In the case of a transfer described in subparagraph (A) or
(B), the amount transferred shall be treated as consisting
first of the portion of such distribution that is includible in
gross income (determined without regard to paragraph (1)).''.
(r) Amendments Relating to Section 648 of the Act.--
(1) Section 417(e) is amended--
(A) in paragraph (1) by striking ``exceed the dollar
limit under section 411(a)(11)(A)'' and inserting
``exceed the amount that can be distributed without the
participant's consent under section 411(a)(11)'', and
(B) in paragraph (2)(A) by striking ``exceeds the
dollar limit under section 411(a)(11)(A)'' and
inserting ``exceeds the amount that can be distributed
without the participant's consent under section
411(a)(11)''.
(2) Section 205(g) of the Employee Retirement Income Security
Act of 1974 is amended--
(A) in paragraph (1) by striking ``exceed the dollar
limit under section 203(e)(1)'' and inserting ``exceed
the amount that can be distributed without the
participant's consent under section 203(e)'', and
(B) in paragraph (2)(A) by striking ``exceeds the
dollar limit under section 203(e)(1)'' and inserting
``exceeds the amount that can be distributed without
the participant's consent under section 203(e)''.
(s) Amendment Relating to Section 652 of the Act.--Section
404(a)(1)(D)(iv) is amended by striking ``Plans maintained by
professional service employers'' and inserting ``Special rule for
terminating plans''.
(t) Amendments Relating to Section 657 of the Act.--Section 404(c)(3)
of the Employee Retirement Income Security Act of 1974 is amended--
(1) by striking ``the earlier of'' in subparagraph (A) the
second place it appears, and
(2) by striking ``if the transfer'' and inserting ``a
transfer that''.
(u) Amendments Relating to Section 659 of the Act.--
(1) Section 4980F is amended--
(A) in subsection (e)(1) by striking ``written
notice'' and inserting ``the notice described in
paragraph (2)'',
(B) by amending subsection (f)(2)(A) to read as
follows:
``(A) any defined benefit plan described in section
401(a) which includes a trust exempt from tax under
section 501(a), or'', and
(C) in subsection (f)(3) by striking
``significantly'' both places it appears.
(2) Section 204(h)(9) of the Employee Retirement Income
Security Act of 1974 is amended by striking ``significantly''
both places it appears.
(3) Section 659(c)(3)(B) of the Economic Growth and Tax
Relief Reconciliation Act of 2001 is amended by striking
``(or'' and inserting ``(and''.
(v) Amendments Relating to Section 661 of the Act.--
(1) Section 412(c)(9)(B) is amended--
(A) in clause (ii) by striking ``125 percent'' and
inserting ``100 percent'', and
(B) by adding at the end the following new clause:
``(iv) Limitation.--A change in funding
method to use a prior year valuation, as
provided in clause (ii), may not be made unless
as of the valuation date within the prior plan
year, the value of the assets of the plan are
not less than 125 percent of the plan's current
liability (as defined in paragraph (7)(B)).''.
(2) Section 302(c)(9)(B) of the Employee Retirement Income
Security Act of 1974 is amended--
(A) in clause (ii) by striking ``125 percent'' and
inserting ``100 percent'', and
(B) by adding at the end the following new clause:
``(iv) A change in funding method to use a prior year valuation, as
provided in clause (ii), may not be made unless as of the valuation
date within the prior plan year, the value of the assets of the plan
are not less than 125 percent of the plan's current liability (as
defined in paragraph (7)(B)).''.
(w) Amendments Relating to Section 662 of the Act.--
(1) Section 404(k) is amended--
(A) in paragraph (1) by striking ``during the taxable
year'',
(B) in paragraph (2)(B) by striking ``(A)(iii)'' and
inserting ``(A)(iv)'',
(C) in paragraph (4)(B) by striking ``(iii)'' and
inserting ``(iv)'', and
(D) by redesignating subparagraph (B) of paragraph
(4) (as amended by subparagraph (C)) as subparagraph
(C) of paragraph (4) and by inserting after
subparagraph (A) the following new subparagraph:
``(B) Reinvestment dividends.--For purposes of
subparagraph (A), an applicable dividend reinvested
pursuant to clause (iii)(II) of paragraph (2)(A) shall
be treated as paid in the taxable year of the
corporation in which such dividend is reinvested in
qualifying employer securities or in which the election
under clause (iii) of paragraph (2)(A) is made,
whichever is later.''.
(2) Section 404(k) is amended by adding at the end the
following new paragraph:
``(7) Full vesting.--In accordance with section 411, an
applicable dividend described in clause (iii)(II) of paragraph
(2)(A) shall be subject to the requirements of section
411(a)(1).''.
(x) Effective Date.--Except as provided in subsection (c), the
amendments made by this section shall take effect as if included in the
provisions of the Economic Growth and Tax Relief Reconciliation Act of
2001 to which they relate.
SEC. 512. AMENDMENTS RELATED TO COMMUNITY RENEWAL TAX RELIEF ACT OF
2000.
(a) Amendment Related to Section 101 of the Act.--Section
469(i)(3)(E) is amended by striking clauses (ii), (iii), and (iv) and
inserting the following:
``(ii) second to the portion of such loss to
which subparagraph (C) applies,
``(iii) third to the portion of the passive
activity credit to which subparagraph (B) or
(D) does not apply,
``(iv) fourth to the portion of such credit
to which subparagraph (B) applies, and''.
(b) Amendment Related to Section 306 of the Act.--Section
151(c)(6)(C) is amended--
(1) by striking ``for earned income credit.--For purposes of
section 32, an'' and inserting ``for principal place of abode
requirements.--An'', and
(2) by striking ``requirement of section 32(c)(3)(A)(ii)''
and inserting ``principal place of abode requirements of
section 2(a)(1)(B), section 2(b)(1)(A), and section
32(c)(3)(A)(ii)''.
(c) Amendment Related to Section 309 of the Act.--Subparagraph (A) of
section 358(h)(1) is amended to read as follows:
``(A) which is assumed by another person as part of
the exchange, and''.
(d) Amendments Related to Section 401 of the Act.--
(1)(A) Section 1234A is amended by inserting ``or'' after the
comma at the end of paragraph (1), by striking ``or'' at the
end of paragraph (2), and by striking paragraph (3).
(B)(i) Section 1234B is amended in subsection (a)(1) and in
subsection (b) by striking ``sale or exchange'' the first place
it appears in each subsection and inserting ``sale, exchange,
or termination''.
(ii) Section 1234B is amended by adding at the end the
following new subsection:
``(f) Cross Reference.--
``For special rules relating to dealer securities
futures contracts, see section 1256.''
(2) Section 1091(e) is amended--
(A) in the heading, by striking ``Securities.--'' and
inserting ``Securities and Securities Futures Contracts
To Sell.--'',
(B) by inserting after ``closing of a short sale of''
the following: ``(or a securities futures contract to
sell)'',
(C) in paragraph (2), by inserting after ``short sale
of'' the following: ``(or securities futures contracts
to sell)'', and
(D) by adding at the end the following:
``For purposes of this subsection, the term `securities futures
contract' has the meaning provided by section 1234B(c).''.
(3) Section 1233(e)(2) is amended by striking ``and'' at the
end of subparagraph (C), by striking the period and inserting
``; and'' at the end of subparagraph (D), and by adding at the
end the following:
``(E) entering into a securities futures contract (as
so defined) to sell shall be treated as entering into a
short sale, and the sale, exchange, or termination of a
securities futures contract to sell shall be treated as
the closing of a short sale.''.
(e) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Community Renewal Tax
Relief Act of 2000 to which they relate.
SEC. 513. AMENDMENTS RELATED TO THE TAX RELIEF EXTENSION ACT OF 1999.
(a) Amendments Related to Section 545 of the Act.--Section 857(b)(7)
is amended--
(1) in clause (i) of subparagraph (B), by striking ``the
amount of which'' and inserting ``to the extent the amount of
the rents'', and
(2) in subparagraph (C), by striking ``if the amount'' and
inserting ``to the extent the amount''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in section 545 of the Tax Relief Extension Act of
1999.
SEC. 514. AMENDMENTS RELATED TO THE TAXPAYER RELIEF ACT OF 1997.
(a) Amendments Related to Section 311 of the Act.--Section 311(e) of
the Taxpayer Relief Act of 1997 (Public Law 105-34; 111 Stat. 836) is
amended--
(1) in paragraph (2)(A), by striking ``recognized'' and
inserting ``included in gross income'', and
(2) by adding at the end the following new paragraph:
``(5) Disposition of interest in passive activity.--Section
469(g)(1)(A) of the Internal Revenue Code of 1986 shall not
apply by reason of an election made under paragraph (1).''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in section 311 of the Taxpayer Relief Act of
1997.
SEC. 515. AMENDMENT RELATED TO THE BALANCED BUDGET ACT OF 1997.
(a) Amendment Related to Section 4006 of the Act.--Section 26(b)(2)
is amended by striking ``and'' at the end of subparagraph (P), by
striking the period and inserting ``, and'' at the end of subparagraph
(Q), and by adding at the end the following new subparagraph:
``(R) section 138(c)(2) (relating to penalty for
distributions from Medicare+Choice MSA not used for
qualified medical expenses if minimum balance not
maintained).''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 4006 of the Balanced Budget Act of
1997.
SEC. 516. OTHER TECHNICAL CORRECTIONS.
(a) Coordination of Advanced Payments of Earned Income Credit.--
(1) Section 32(g)(2) is amended by striking ``subpart'' and
inserting ``part''.
(2) The amendment made by this subsection shall take effect
as if included in section 474 of the Tax Reform Act of 1984.
(b) Disclosure by Social Security Administration to Federal Child
Support Agencies.--
(1) Section 6103(l)(8) is amended--
(A) in the heading, by striking ``state and local''
and inserting ``federal, state, and local'', and
(B) in subparagraph (A), by inserting ``Federal or''
before ``State or local''.
(2) The amendments made by this subsection shall take effect
on the date of the enactment of this Act.
(c) Treatment of Settlements Under Partnership Audit Rules.--
(1) The following provisions are each amended by inserting
``or the Attorney General (or his delegate)'' after
``Secretary'' each place it appears:
(A) Paragraphs (1) and (2) of section 6224(c).
(B) Section 6229(f)(2).
(C) Section 6231(b)(1)(C).
(D) Section 6234(g)(4)(A).
(2) The amendments made by this subsection shall apply with
respect to settlement agreements entered into after the date of
the enactment of this Act.
(d) Amendment Related to Procedure and Administration.--
(1) Section 6331(k)(3) (relating to no levy while certain
offers pending or installment agreement pending or in effect)
is amended to read as follows:
``(3) Certain rules to apply.--Rules similar to the rules
of--
``(A) paragraphs (3) and (4) of subsection (i), and
``(B) except in the case of paragraph (2)(C),
paragraph (5) of subsection (i),
shall apply for purposes of this subsection.''.
(2) The amendment made by this subsection shall take effect
on the date of the enactment of this Act.
(e) Modified Endowment Contracts.--Paragraph (2) of section 318(a) of
the Community Renewal Tax Relief Act of 2000 (114 Stat. 2763A-645) is
repealed, and clause (ii) of section 7702A(c)(3)(A) shall read and be
applied as if the amendment made by such paragraph had not been
enacted.
SEC. 517. CLERICAL AMENDMENTS.
(1) The subsection (g) of section 25B that relates to
termination is redesignated as subsection (h).
(2) Section 51A(c)(1) is amended by striking ``51(d)(10)''
and inserting ``51(d)(11)''.
(3) Section 172(b)(1)(F)(i) is amended--
(A) by striking ``3 years'' and inserting ``3 taxable
years'', and
(B) by striking ``2 years'' and inserting ``2 taxable
years''.
(4) Section 351(h)(1) is amended by inserting a comma after
``liability''.
(5) Section 741 is amended by striking ``which have
appreciated substantially in value''.
(6) Section 857(b)(7)(B)(i) is amended by striking
``subsection 856(d)'' and inserting ``section 856(d)''.
(7) Section 1394(c)(2) is amended by striking ``subparagraph
(A)'' and inserting ``paragraph (1)''.
(8)(A) Section 6227(d) is amended by striking ``subsection
(b)'' and inserting ``subsection (c)''.
(B) Section 6228 is amended--
(i) in subsection (a)(1), by striking ``subsection
(b) of section 6227'' and inserting ``subsection (c) of
section 6227'',
(ii) in subsection (a)(3)(A), by striking
``subsection (b) of'', and
(iii) in subsections (b)(1) and (b)(2)(A), by
striking ``subsection (c) of section 6227'' and
inserting ``subsection (d) of section 6227''.
(C) Section 6231(b)(2)(B)(i) is amended by striking ``section
6227(c)'' and inserting ``section 6227(d)''.
(9) Section 1221(b)(1)(B)(i) is amended by striking
``1256(b))'' and inserting ``1256(b)))''.
(10) Section 618(b)(2) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (Public Law 107-16; 115 Stat. 108)
is amended--
(A) in subparagraph (A) by striking ``203(d)'' and
inserting ``202(f)'', and
(B) in subparagraphs (C), (D), and (E) by striking
``203'' and inserting ``202(f)''.
(11)(A) Section 525 of the Ticket to Work and Work Incentives
Improvement Act of 1999 (Public Law 106-170; 113 Stat. 1928) is
amended by striking ``7200'' and inserting ``7201''.
(B) Section 532(c)(2) of such Act (113 Stat. 1930) is
amended--
(i) in subparagraph (D), by striking ``341(d)(3)''
and inserting ``341(d)'', and
(ii) in subparagraph (Q), by striking
``954(c)(1)(B)(iii) and inserting ``954(c)(1)(B)''.
SEC. 518. ADDITIONAL CORRECTIONS.
(a) Amendments Related to Section 202 of the Economic Growth and Tax
Relief Reconciliation Act of 2001.--
(1) Subsection (h) of section 23 is amended--
(A) by striking ``subsection (a)(1)(B)'' and
inserting ``subsection (a)(3)'', and
(B) by adding at the end the following new flush
sentence:
``If any amount as increased under the preceding sentence is not a
multiple of $10, such amount shall be rounded to the nearest multiple
of $10.''
(2) Subsection (f) of section 137 is amended by adding at the
end the following new flush sentence:
``If any amount as increased under the preceding sentence is not a
multiple of $10, such amount shall be rounded to the nearest multiple
of $10.''
(b) Amendments Related to Section 204 of the Economic Growth and Tax
Relief Reconciliation Act of 2001.--Section 21(d)(2) is amended--
(1) in subparagraph (A) by striking ``$200'' and inserting
``$250'', and
(2) in subparagraph (B) by striking ``$400'' and inserting
``$500''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 to which they relate.
TITLE VI--UNEMPLOYMENT ASSISTANCE
SEC. 601. SHORT TITLE.
This title may be cited as the ``Temporary Extended Unemployment
Compensation Act of 2002''.
SEC. 602. 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
temporary extended 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 March 15,
2001);
(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;
(3) are not receiving compensation with respect to such week
under the unemployment compensation law of Canada; and
(4) filed an initial claim for regular compensation on or
after March 15, 2001.
(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 temporary extended 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 temporary extended unemployment
compensation and the payment thereof, except--
(A) that an individual shall not be eligible for
temporary extended unemployment compensation under this
title unless, in the base period with respect to which
the individual exhausted all rights to regular
compensation under the State law, the individual had 20
weeks of full-time insured employment or the equivalent
in insured wages, as determined under the provisions of
the State law implementing section 202(a)(5) of the
Federal-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note); and
(B) 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 temporary extended unemployment
compensation payable to any individual for whom a temporary
extended unemployment compensation account is established under
section 603 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 temporary
extended unemployment compensation in lieu of extended compensation to
individuals who otherwise meet the requirements of this section. Such
an election shall not require a State to trigger off an extended
benefit period.
SEC. 603. TEMPORARY EXTENDED 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 temporary extended unemployment compensation, a
temporary extended 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.
(c) Special Rule.--
(1) In general.--Notwithstanding any other provision of this
section, if, at the time that the individual's account is
exhausted, 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
if, at the time of exhaustion (as described in paragraph (1))--
(A) such a period is then in effect for such State
under the Federal-State Extended Unemployment
Compensation Act of 1970; or
(B) such a period would then be in effect for such
State under such Act if section 203(d) of such Act were
applied as if it had been amended by striking ``5''
each place it appears and inserting ``4''.
SEC. 604. PAYMENTS TO STATES HAVING AGREEMENTS FOR THE PAYMENT OF
TEMPORARY EXTENDED 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 temporary extended 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. 605. 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 General Accounting 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. 606. 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 temporary extended unemployment compensation under this title
to which he was not entitled, such individual--
(1) shall be ineligible for further temporary extended
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 temporary extended unemployment compensation under this title to
which they were not entitled, the State shall require such individuals
to repay the amounts of such temporary extended unemployment
compensation to the State agency, except that the State agency may
waive such repayment if it determines that--
(1) the payment of such temporary extended unemployment
compensation was without fault on the part of any such
individual; and
(2) such repayment would be contrary to equity and good
conscience.
(c) Recovery by State Agency.--
(1) In general.--The State agency may recover the amount to
be repaid, or any part thereof, by deductions from any
temporary extended unemployment compensation payable to such
individual under this title or from any unemployment
compensation payable to such individual under any 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 temporary extended 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. 607. 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. 608. APPLICABILITY.
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 before January 1, 2003.
SEC. 609. SPECIAL REED ACT TRANSFER IN FISCAL YEAR 2002.
(a) Repeal of Certain Provisions Added by the Balanced Budget Act of
1997.--
(1) In general.--The following provisions of section 903 of
the Social Security Act (42 U.S.C. 1103) are repealed:
(A) Paragraph (3) of subsection (a).
(B) The last sentence of subsection (c)(2).
(2) Savings provision.--Any amounts transferred before the
date of enactment of this Act under the provision repealed by
paragraph (1)(A) shall remain subject to section 903 of the
Social Security Act, as last in effect before such date of
enactment.
(b) Special Transfer in Fiscal Year 2002.--Section 903 of the Social
Security Act is amended by adding at the end the following:
``Special Transfer in Fiscal Year 2002
``(d)(1) The Secretary of the Treasury shall transfer (as of the date
determined under paragraph (5)) from the Federal unemployment account
to the account of each State in the Unemployment Trust Fund the amount
determined with respect to such State under paragraph (2).
``(2)(A) The amount to be transferred under this subsection to a
State account shall (as determined by the Secretary of Labor and
certified by such Secretary to the Secretary of the Treasury) be equal
to--
``(i) the amount which would have been required to have been
transferred under this section to such account at the beginning
of fiscal year 2002 if--
``(I) section 609(a)(1) of the Temporary Extended
Unemployment Compensation Act of 2002 had been enacted
before the close of fiscal year 2001, and
``(II) section 5402 of Public Law 105-33 (relating to
increase in Federal unemployment account ceiling) had
not been enacted,
minus
``(ii) the amount which was in fact transferred under this
section to such account at the beginning of fiscal year 2002.
``(B) Notwithstanding the provisions of subparagraph (A)--
``(i) the aggregate amount transferred to the States under
this subsection may not exceed a total of $8,000,000,000; and
``(ii) all amounts determined under subparagraph (A) shall be
reduced ratably, if and to the extent necessary in order to
comply with the limitation under clause (i).
``(3)(A) Except as provided in paragraph (4), amounts transferred to
a State account pursuant to this subsection may be used only in the
payment of cash benefits--
``(i) to individuals with respect to their unemployment, and
``(ii) which are allowable under subparagraph (B) or (C).
``(B)(i) At the option of the State, cash benefits under this
paragraph may include amounts which shall be payable as--
``(I) regular compensation, or
``(II) additional compensation, upon the exhaustion of any
temporary extended unemployment compensation (if such State has
entered into an agreement under the Temporary Extended
Unemployment Compensation Act of 2002), for individuals
eligible for regular compensation under the unemployment
compensation law of such State.
``(ii) Any additional compensation under clause (i) may not be taken
into account for purposes of any determination relating to the amount
of any extended compensation for which an individual might be eligible.
``(C)(i) At the option of the State, cash benefits under this
paragraph may include amounts which shall be payable to 1 or more
categories of individuals not otherwise eligible for regular
compensation under the unemployment compensation law of such State,
including those described in clause (iii).
``(ii) The benefits paid under this subparagraph to any individual
may not, for any period of unemployment, exceed the maximum amount of
regular compensation authorized under the unemployment compensation law
of such State for that same period, plus any additional compensation
(described in subparagraph (B)(i)) which could have been paid with
respect to that amount.
``(iii) The categories of individuals described in this clause
include the following:
``(I) Individuals who are seeking, or available for, only
part-time (and not full-time) work.
``(II) Individuals who would be eligible for regular
compensation under the unemployment compensation law of such
State under an alternative base period.
``(D) Amounts transferred to a State account under this subsection
may be used in the payment of cash benefits to individuals only for
weeks of unemployment beginning after the date of enactment of this
subsection.
``(4) Amounts transferred to a State account under this subsection
may be used for the administration of its unemployment compensation law
and public employment offices (including in connection with benefits
described in paragraph (3) and any recipients thereof), subject to the
same conditions as set forth in subsection (c)(2) (excluding
subparagraph (B) thereof, and deeming the reference to `subsections (a)
and (b)' in subparagraph (D) thereof to include this subsection).
``(5) Transfers under this subsection shall be made within 10 days
after the date of enactment of this paragraph.''
(c) Limitations on Transfers.--Section 903(b) of the Social Security
Act shall apply to transfers under section 903(d) of such Act (as
amended by this section). For purposes of the preceding sentence, such
section 903(b) shall be deemed to be amended as follows:
(1) By substituting ``the transfer date described in
subsection (d)(5)'' for ``October 1 of any fiscal year''.
(2) By substituting ``remain in the Federal unemployment
account'' for ``be transferred to the Federal unemployment
account as of the beginning of such October 1''.
(3) By substituting ``fiscal year 2002 (after the transfer
date described in subsection (d)(5))'' for ``the fiscal year
beginning on such October 1''.
(4) By substituting ``under subsection (d)'' for ``as of
October 1 of such fiscal year''.
(5) By substituting ``(as of the close of fiscal year 2002)''
for ``(as of the close of such fiscal year)''.
(d) Technical Amendments.--(1) Sections 3304(a)(4)(B) and 3306(f)(2)
of the Internal Revenue Code of 1986 are amended by inserting ``or
903(d)(4)'' before ``of the Social Security Act''.
(2) Section 303(a)(5) of the Social Security Act is amended in the
second proviso by inserting ``or 903(d)(4)'' after ``903(c)(2)''.
(e) Regulations.--The Secretary of Labor may prescribe any operating
instructions or regulations necessary to carry out this section and the
amendments made by this section.
TITLE VII--DISPLACED WORKER HEALTH INSURANCE CREDIT
SEC. 701. DISPLACED WORKER HEALTH INSURANCE CREDIT.
(a) In General.--Subchapter B of chapter 65 is amended by inserting
after section 6428 the following new section:
``SEC. 6429. DISPLACED WORKER HEALTH INSURANCE CREDIT.
``(a) In General.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by subtitle A an amount
equal to 60 percent of the amount paid during the taxable year for
coverage for the taxpayer, the taxpayer's spouse, and dependents of the
taxpayer under qualified health insurance during eligible coverage
months.
``(b) Only 12 Eligible Coverage Months.--The number of eligible
coverage months taken into account under subsection (a) for all taxable
years shall not exceed 12.
``(c) Eligible Coverage Month.--For purposes of this section--
``(1) In general.--The term `eligible coverage month' means
any month during 2002 or 2003 if, as of the first day of such
month--
``(A) the taxpayer is unemployed,
``(B) the taxpayer is covered by qualified health
insurance,
``(C) the premium for coverage under such insurance
for such month is paid by the taxpayer, and
``(D) the taxpayer does not have other specified
coverage.
``(2) Special rules.--
``(A) Treatment of first month of employment.--The
taxpayer shall be treated as meeting the requirement of
paragraph (1)(A) for the first month beginning on or
after the date that the taxpayer ceases to be
unemployed by reason of beginning work for an employer.
``(B) Initial claim must be after march 15, 2001.--
The taxpayer shall not be treated as meeting the
requirement of paragraph (1)(A) with respect to any
unemployment if the initial claim for regular
compensation for such unemployment is filed on or
before March 15, 2001.
``(C) Joint returns.--In the case of a joint return,
the requirements of paragraph (1) shall be treated as
met if at least 1 spouse satisfies such requirements.
``(3) Other specified coverage.--For purposes of this
subsection, an individual has other specified coverage for any
month if, as of the first day of such month--
``(A) Subsidized coverage.--
``(i) In general.--Such individual is covered
under any qualified health insurance under
which at least 50 percent of the cost of
coverage (determined under section 4980B) is
paid or incurred by an employer (or former
employer) of the taxpayer or the taxpayer's
spouse.
``(ii) Treatment of cafeteria plans and
flexible spending accounts.--For purposes of
clause (i), the cost of benefits--
``(I) which are chosen under a
cafeteria plan (as defined in section
125(d)), or provided under a flexible
spending or similar arrangement, of
such an employer, and
``(II) which are not includible in
gross income under section 106,
shall be treated as borne by such employer.
``(B) Coverage under medicare, medicaid, or schip.--
Such individual--
``(i) is entitled to benefits under part A of
title XVIII of the Social Security Act or is
enrolled under part B of such title, or
``(ii) is enrolled in the program under title
XIX or XXI of such Act.
``(C) Certain other coverage.--Such individual--
``(i) is enrolled in a health benefits plan
under chapter 89 of title 5, United States
Code, or
``(ii) is entitled to receive benefits under
chapter 55 of title 10, United States Code.
``(4) Determination of unemployment.--For purposes of
paragraph (1), an individual shall be treated as unemployed
during any period--
``(A) for which such individual is receiving
unemployment compensation (as defined in section
85(b)), or
``(B) for which such individual is certified by a
State agency (or by any other entity designated by the
Secretary) as otherwise being entitled to receive
unemployment compensation (as so defined) but for--
``(i) the termination of the period during
which such compensation was payable, or
``(ii) an exhaustion of such individual's
rights to such compensation.
``(d) Qualified Health Insurance.--For purposes of this section, the
term `qualified health insurance' means insurance which constitutes
medical care; except that such term shall not include any insurance if
substantially all of its coverage is of excepted benefits described in
section 9832(c).
``(e) Coordination With Advance Payments of Credit.--
``(1) Recapture of excess advance payments.--If any payment
is made by the Secretary under section 7527 during any calendar
year to a provider of qualified health insurance for an
individual, then the tax imposed by this chapter for the
individual's last taxable year beginning in such calendar year
shall be increased by the aggregate amount of such payments.
``(2) Reconciliation of payments advanced and credit
allowed.--Any increase in tax under paragraph (1) shall not be
treated as tax imposed by this chapter for purposes of
determining the amount of any credit (other than the credit
allowed by subsection (a)) allowable under part IV of
subchapter A of chapter 1.
``(f) Special Rules.--
``(1) Coordination with other deductions.--Amounts taken into
account under subsection (a) shall not be taken into account in
determining any deduction allowed under section 162(l) or 213.
``(2) MSA distributions.--Amounts distributed from an Archer
MSA (as defined in section 220(d)) shall not be taken into
account under subsection (a).
``(3) Denial of credit to dependents.--No credit shall be
allowed under this section to 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 such individual's taxable year begins.
``(4) Credit treated as refundable credit.--For purposes of
this title, the credit allowed under this section shall be
treated as a credit allowable under subpart C of part IV of
subchapter A of chapter 1.
``(5) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section and section 7527.''.
(b) Increased Access to Health Insurance for Individuals Eligible for
Tax Credit Through Use of Guaranteed Issue, Qualified High Risk Pools,
and Other Appropriate State Mechanisms.--
(1) In general.--Notwithstanding any other provision of law,
in applying section 2741 of the Public Health Service Act (42
U.S.C. 300gg-41)) and any alternative State mechanism under
section 2744 of such Act (42 U.S.C.300gg-44)), in determining
who is an eligible individual (as defined in section 2741(b) of
such Act) in the case of an individual who may be covered by
insurance for which credit is allowable under section 6429 of
the Internal Revenue Code of 1986 for an eligible coverage
month, if the individual seeks to obtain health insurance
coverage under such section during an eligible coverage month
under such section--
(A) paragraph (1) of such section 2741(b) shall be
applied as if any reference to 18 months is deemed a
reference to 12 months, and
(B) paragraphs (4) and (5) of such section 2741(b)
shall not apply.
(2) Promotion of state high risk pools.--Title XXVII of the
Public Health Service Act is amended by inserting after section
2744 the following new section:
``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
``(a) Seed Grants to States.--The Secretary shall provide from the
funds appropriated under subsection (c)(1) a grant of up to $1,000,000
to each State that has not created a qualified high risk pool as of the
date of the enactment of this section for the State's costs of creation
and initial operation of such a pool.
``(b) Matching Funds for Operation of Pools.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool that restricts premiums
charged under the pool to no more than 150 percent of the
premium for applicable standard risk rates and that offers a
choice of two or more coverage options through the pool, from
the funds appropriated under subsection (c)(2) and allotted to
the State under paragraph (2), the Secretary shall provide a
grant of up to 50 percent of the losses incurred by the State
in connection with the operation of the pool.
``(2) Allotment.--The amounts appropriated under subsection
(c)(2) for a fiscal year shall be made available to the States
in accordance with a formula that is based upon the number of
uninsured individuals in the States.
``(3) Construction.--Nothing in this subsection shall be
construed as preventing a State from supplementing the funds
made available under this subsection for the support and
operation of qualified high risk pools.
``(c) Funding.--Out of any money in the Treasury of the United States
not otherwise appropriated, there are appropriated--
``(1) $20,000,000 for fiscal year 2002 to carry out
subsection (a); and
``(2) $40,000,000 for each of fiscal years 2002 and 2003.
Funds appropriated under this subsection for a fiscal year shall remain
available for obligation through the end of the following fiscal year.
Nothing in this section shall be construed as providing a State with an
entitlement to a grant under this section.
``(d) Qualified High Risk Pool and State Defined.--For purposes of
this section, the term `qualified high risk pool' has the meaning given
such term in section 2744(c)(2) and the term `State' means any of the
50 States and the District of Columbia.''.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the ability of a State to use
mechanisms, described in sections 2741(c) and 2744 of the
Public Health Service Act, as an alternative to applying the
guaranteed availability provisions of section 2741(a) of such
Act.
(c) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 (relating to information concerning transactions
with other persons) is amended by inserting after section 6050S
the following new section:
``SEC. 6050T. RETURNS RELATING TO DISPLACED WORKER HEALTH INSURANCE
CREDIT.
``(a) Requirement of Reporting.--Every person--
``(1) who, in connection with a trade or business conducted
by such person, receives payments during any calendar year from
any individual for coverage of such individual or any other
individual under qualified health insurance (as defined in
section 6429(d)), and
``(2) who claims a reimbursement for an advance credit
amount,
shall, at such time as the Secretary may prescribe, make the return
described in subsection (b) with respect to each individual from whom
such payments were received or for whom such a reimbursement is
claimed.
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of each individual
referred to in subsection (a),
``(B) the aggregate of the advance credit amounts
provided to such individual and for which reimbursement
is claimed,
``(C) the number of months for which such advance
credit amounts are so provided, and
``(D) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Individuals With Respect to Whom
Information Is Required.--Every person required to make a return under
subsection (a) shall furnish to each individual whose name is required
to be set forth in such return a written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact for
such person, and
``(2) the information required to be shown on the return with
respect to such individual.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) is required to be made.
``(d) Advance Credit Amount.--For purposes of this section, the term
`advance credit amount' means an amount for which the person can claim
a reimbursement pursuant to a program established by the Secretary
under section 7527.''
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) (relating
to definitions) is amended by redesignating clauses
(xi) through (xvii) as clauses (xii) through (xviii),
respectively, and by inserting after clause (x) the
following new clause:
``(xi) section 6050T (relating to returns
relating to displaced worker health insurance
credit),''.
(B) Paragraph (2) of section 6724(d) is amended by
striking ``or'' at the end of subparagraph (Z), by
striking the period at the end of subparagraph (AA) and
inserting ``, or'', and by adding after subparagraph
(AA) the following new subparagraph:
``(BB) section 6050T (relating to returns relating to
displaced worker health insurance credit).''
(3) Clerical amendment.--The table of sections for subpart B
of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6050S the
following new item:
``Sec. 6050T. Returns relating to
displaced worker health
insurance credit.''
(d) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 6429 of such Code''.
(2) The table of sections for subchapter B of chapter 65 is
amended by adding at the end the following new item:
``Sec. 6429. Displaced worker health
insurance credit.''
(e) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 702. ADVANCE PAYMENT OF DISPLACED WORKER HEALTH INSURANCE CREDIT.
(a) In General.--Chapter 77 (relating to miscellaneous provisions) is
amended by adding at the end the following new section:
``SEC. 7527. ADVANCE PAYMENT OF DISPLACED WORKER HEALTH INSURANCE
CREDIT.
``(a) General Rule.--The Secretary shall establish a program for
making payments on behalf of eligible individuals to providers of
health insurance for such individuals.
``(b) Eligible Individual.--For purposes of this section, the term
`eligible individual' means any individual for whom a qualified health
insurance credit eligibility certificate is in effect.
``(c) Qualified Health Insurance Credit Eligibility Certificate.--For
purposes of this section, a qualified health insurance credit
eligibility certificate is a statement certified by a State agency (or
by any other entity designated by the Secretary) which--
``(1) certifies that the individual was unemployed (within
the meaning of section 6429) as of the first day of any month,
and
``(2) provides such other information as the Secretary may
require for purposes of this section.''
(b) Clerical Amendment.--The table of sections for chapter 77 is
amended by adding at the end the following new item:
``Sec. 7527. Advance payment of displaced
worker health insurance
credit.''
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
TITLE VIII--EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY HEALTH
CARE COVERAGE ASSISTANCE
SEC. 801. EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY HEALTH CARE
COVERAGE ASSISTANCE.
(a) In General.--Section 173(a) of the Workforce Investment Act of
1998 (29 U.S.C. 2918(a)) is amended--
(1) in paragraph (2), by striking ``and'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(4) to the Governor of any State or outlying area who
applies for assistance under subsection (f) to provide
employment and training assistance and temporary health care
coverage assistance to workers affected by major economic
dislocations, such as plant closures, mass layoffs, or multiple
layoffs, including those dislocations caused by the terrorist
attacks of September 11, 2001.''.
(b) Requirements.--Section 173 of the Workforce Investment Act of
1998 (29 U.S.C. 2918) is amended by adding at the end the following:
``(f) Additional Relief for Major Economic Dislocations.--
``(1) Grant recipient eligibility.--
``(A) In general.--To be eligible to receive a grant
under subsection (a)(4), a Governor shall submit an
application, for assistance described in subparagraph
(B), to the Secretary at such time, in such manner, and
containing such information as the Secretary may
require.
``(B) Types of assistance.--
``(i) In general.--Assistance described in
this subparagraph is--
``(I) employment and training
assistance, including employment and
training activities described in
section 134; and
``(II) temporary health care coverage
assistance described in paragraph (4).
``(ii) Minimum allocation to temporary health
care coverage assistance.--Not less than 30
percent of the cost of assistance requested in
any application submitted under this subsection
shall consist of the cost for temporary health
care coverage assistance described in paragraph
(4).
``(iii) Encouragement of certain types of
health care coverage.--In publishing
requirements for applications under this
subsection, the Secretary shall encourage the
use of private health coverage alternatives.
``(C) Minimum award requirement for eligible states
and outlying areas.--
``(i) Requirements.--In any case in which the
requirements of this section are met in
connection with one or more applications of the
Governor of any State or outlying area for
assistance described in subparagraph (B), the
Governor--
``(I) shall be awarded at least 1
grant under subsection (a)(4) pursuant
to such applications, and
``(II) except as provided in clause
(ii), shall be awarded not less than
$5,000,000 in total grants awarded
under (a)(4).
``(ii) Exception to minimum grant
requirements.--The Secretary may award to a
Governor a total amount less than the minimum
total amount specified in clause (i)(II), as
appropriate, if the Governor--
``(I) requests less than such minimum
total amount, or
``(II) fails to demonstrate to the
Secretary that there are a sufficient
number of eligible recipients to
justify the awarding of grants in such
minimum total amount.
``(2) State administration.--The Governor may designate one
or more local workforce investment boards or other entities
with the capability to respond to the circumstances relating to
the particular closure, layoff, or other dislocation to
administer the grant under subsection (a)(4).
``(3) Participant eligibility.--An individual shall be
eligible to receive assistance described in paragraph (1)(B)
under a grant awarded under subsection (a)(4) if such
individual is a dislocated worker and the Governor has
certified that a major economic dislocation, such as a plant
closure, mass layoff, or multiple layoff, including a
dislocation caused by the terrorist attacks of September 11,
2001, contributed importantly to the dislocation.
``(4) Temporary health care coverage assistance.--
``(A) In general.--Temporary health care coverage
assistance described in this paragraph consists of
health care coverage premium assistance provided to
qualified individuals under this paragraph with respect
to premiums for coverage for themselves, for their
spouses, for their dependents, or for any combination
thereof, other than premiums for excluded health
insurance coverage.
``(B) Qualified individuals.--For purposes of this
paragraph--
``(i) In general.--Subject to clause (ii), a
qualified individual is an individual who--
``(I) is a dislocated worker referred
to in paragraph (3) with respect to
whom the Governor has made the
certification regarding the dislocation
as required under such paragraph, and
``(II) is receiving or has received
employment and training assistance as
described in paragraph (1)(B)(i)(I).
``(ii) Limitation.--An individual shall not
be treated as a qualified individual if--
``(I) such individual is eligible for
coverage under the program under title
XIX of the Social Security Act
applicable in the State or outlying
area, or
``(II) such individual is eligible
for coverage under the program under
title XXI of such Act applicable in the
State or outlying area,
unless such eligibility is effective solely in
connection with eligibility for health care
coverage premium assistance under a program
established by the Governor in connection with
temporary health care coverage assistance
received under this subsection.
``(iii) Construction.--
``(I) Permitting coverage through
enrollment in medicaid or schip.--
Nothing in this subsection shall be
construed as preventing a State from
using funds made available by reason of
subsection (a)(4) to provide health
care coverage through enrollment in the
program under title XIX (relating to
medicaid) or in the program under title
XXI (relating to SCHIP) of the Social
Security Act, but only in the case of
individuals who are not otherwise
eligible for coverage under either such
program.
``(II) Not affecting eligibility for
assistance.--An individual shall not be
treated for purposes of this subsection
as being eligible for coverage under
either such program (and thereby not
eligible for assistance under this
subsection) merely on the basis that
the State provides assistance under
this subsection through coverage under
either such program.
``(C) Limitation on entitlement.--Nothing in this
subsection shall be construed as establishing any
entitlement of qualified individuals to premium
assistance under this subsection.
``(D) Concurrence and consultation.--In connection
with any temporary health care coverage assistance
provided pursuant to this paragraph--
``(i) if the Secretary determines that health
care coverage premium assistance provided
through title XIX or XXI of the Social Security
Act is a substantial component of the
assistance provided, the Secretary shall act in
concurrence with the Secretary of Health and
Human Services, and
``(ii) in any other case, the Secretary shall
consult with the Secretary of Health and Human
Services to the extent that such assistance
affects programs administered by or under the
Secretary of Health and Human Services.
``(E) Use of funds.--Temporary health care coverage
assistance provided pursuant to this subsection shall
supplement and may not supplant any other State or
local funds used to provide health care coverage and
may not be included in determining the amount of non-
Federal contributions required under any program.
``(F) Definitions.--For purposes of this paragraph--
``(i) Excluded health care coverage.--The
term `excluded health care coverage' means
coverage under--
``(I) title XVIII of the Social
Security Act,
``(II) chapter 55 of title 10, United
States Code,
``(III) chapter 17 of title 38,
United States Code,
``(IV) chapter 89 of title 5, United
States Code (other than coverage which
is comparable to continuation coverage
under section 4980B of the Internal
Revenue Code of 1986), or
``(V) the Indian Health Care
Improvement Act.
Such term also includes coverage under a
qualified long-term care insurance contract and
excepted benefits described in section 733(c)
of the Employee Retirement Income Security Act
of 1974.
``(ii) Premium.--The term `premium' means, in
connection with health care coverage, the
premium which would (but for this section) be
charged for the cost of coverage.
``(5) Appropriations.--
``(A) In general.--There is hereby appropriated, from
any amounts in the Treasury not otherwise appropriated,
$3,900,000,000 for the period consisting of fiscal
years 2002, 2003, and 2004 for the award of grants
under subsection (a)(4) in accordance with this
section.
``(B) Availability.--Amounts appropriated pursuant to
subparagraph (A) for each fiscal year--
``(i) are in addition to amounts made
available under section 132(a)(2)(A) or any
other provision of law to carry out this
section; and
``(ii) notwithstanding section 189(g)(1),
shall remain available for obligation by the
Secretary from the date of the enactment of
this subsection through each succeeding fiscal
year, except that, notwithstanding section
189(g)(2), no funds are hereby available for
expenditure after June 30, 2004.''.
TITLE IX--TEMPORARY STATE HEALTH CARE ASSISTANCE
SEC. 901. TEMPORARY STATE HEALTH CARE ASSISTANCE.
(a) In General.--Title XXI of the Social Security Act is amended by
adding at the end the following new section:
``SEC. 2111. TEMPORARY STATE HEALTH CARE ASSISTANCE.
``(a) In General.--For the purpose of providing allotments to States
under this section, there are hereby appropriated, out of any funds in
the Treasury not otherwise appropriated, $4,599,667,448. Such funds
shall be available for expenditure by the State through the end of
2002. This section constitutes budget authority in advance of
appropriations Acts and represents the obligation of the Federal
Government to provide for the payment to States of amounts provided
under this section.
``(b) Allotment.--Funds appropriated under subsection (a) shall be
allotted by the Secretary among the States in accordance with the
following table:
------------------------------------------------------------------------
``State Allotment (in dollars)
------------------------------------------------------------------------
Alabama 50,746,770
Alaska 31,934,026
Arizona 68,594,677
Arkansas 38,203,601
California 482,591,746
Colorado 37,469,775
Connecticut 60,039,005
Delaware 10,355,807
District of Columbia 18,321,834
Florida 164,619,369
Georgia 118,754,564
Hawaii 12,827,163
Idaho 13,031,700
Illinois 175,505,956
Indiana 66,067,368
Iowa 31,521,201
Kansas 27,288,967
Kentucky 82,759,133
Louisiana 83,907,301
Maine 22,650,838
Maryland 60,347,066
Massachusetts 121,971,140
Michigan 156,479,213
Minnesota 113,966,453
Mississippi 55,335,225
Missouri 74,675,436
Montana 10,224,652
Nebraska 31,582,786
Nevada 14,695,973
New Hampshire 15,482,962
New Jersey 115,880,093
New Mexico 39,204,714
New York 573,999,663
North Carolina 189,333,723
North Dakota 8,915,675
Ohio 166,006,936
Oklahoma 48,914,626
Oregon 71,160,353
Pennsylvania 227,183,255
Rhode Island 45,001,680
South Carolina 94,789,740
South Dakota 19,951,788
Tennessee 102,845,128
Texas 289,526,532
Utah 30,860,915
Vermont 10,291,090
Virginia 67,232,217
Washington 110,377,264
West Virginia 31,120,804
Wisconsin 93,089,086
Wyoming 12,030,459
------------------------------------------------------------------------
``(c) Use of Funds.--
``(1) In general.--Funds appropriated under this section may
be used by a State only to provide health care items and
services (other than types of items and services for which
Federal financial participation is prohibited under this title
or title XIX).
``(2) Limitation.--Funds so appropriated may not be used to
match other Federal expenditures or in any other manner that
results in the expenditure of Federal funds in excess of the
amounts provided under this section.
``(d) Payment to States.--Funds made available under this section
shall be paid to the States in a form and manner and time specified by
the Secretary, based upon the submission of such information as the
Secretary may require. There is no requirement for the expenditure of
any State funds in order to qualify for receipt of funds under this
section. The previous sections of this title shall not apply with
respect to funds provided under this section.
``(e) Definition.--For purposes of this section, the term `State'
means the 50 States and the District of Columbia.''.
(b) Repeal.--Effective as of January 1, 2003, section 2111 of the
Social Security Act, as inserted by subsection (a), is repealed.
TITLE X--SOCIAL SECURITY HELD HARMLESS; BUDGETARY TREATMENT OF ACT
SEC. 1001. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.
(a) In General.--Nothing in this Act (or an amendment made by this
Act) shall be construed to alter or amend title II of the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of this
Act has a negative impact on the income and balances of the
trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer, not
less frequently than quarterly, from the general revenues of
the Federal Government an amount sufficient so as to ensure
that the income and balances of such trust funds are not
reduced as a result of the enactment of this Act.
SEC. 1002. EMERGENCY DESIGNATION.
Congress designates as emergency requirements pursuant to section
252(e) of the Balanced Budget and Emergency Deficit Control Act of 1985
the following amounts:
(1) An amount equal to the amount by which revenues are
reduced by this Act below the recommended levels of Federal
revenues for fiscal year 2002, the total of fiscal years 2002
through 2006, and the total of fiscal years 2002 through 2011,
provided in the conference report accompanying H. Con. Res. 83,
the concurrent resolution on the budget for fiscal year 2002.
(2) Amounts equal to the amounts of new budget authority and
outlays provided in this Act in excess of the allocations under
section 302(a) of the Congressional Budget Act of 1974 to the
Committee on Finance of the Senate for fiscal year 2002, the
total of fiscal years 2002 through 2006, and the total of
fiscal years 2002 through 2011.
In lieu of the matter proposed to be inserted by the
amendment of the Senate to the title of the bill, insert the
following:
To provide tax incentives for economic recovery and assistance
to displaced workers.