[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3090 Reported in Senate (RS)]






                                                       Calendar No. 223
107th CONGRESS
  1st Session
                                H.R. 3090


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 24, 2001

     Received; read twice and referred to the Committee on Finance

                            November 9, 2001

Reported by Mr. Baucus, with an amendment and an amendment to the title
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 AN ACT


 
            To provide tax incentives for economic recovery.

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

<DELETED>SECTION 1. SHORT TITLE; ETC.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Economic 
Security and Recovery Act of 2001''.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (c) Table of Contents.--</DELETED>

<DELETED>Sec. 1. Short title; etc.
                 <DELETED>TITLE I--BUSINESS PROVISIONS

<DELETED>Sec. 101. Special depreciation allowance for certain property 
                            acquired after September 10, 2001, and 
                            before September 11, 2004.
<DELETED>Sec. 102. Temporary increase in expensing under section 179.
<DELETED>Sec. 103. Repeal of alternative minimum tax on corporations.
<DELETED>Sec. 104. Carryback of certain net operating losses allowed 
                            for 5 years.
<DELETED>Sec. 105. Recovery period for depreciation of certain 
                            leasehold improvements.
                <DELETED>TITLE II--INDIVIDUAL PROVISIONS

<DELETED>Sec. 201. Acceleration of 25 percent individual income tax 
                            rate.
<DELETED>Sec. 202. Repeal of 5-year holding period requirement for 
                            reduced individual capital gains rates.
<DELETED>Sec. 203. Temporary increase in deduction for capital losses 
                            of taxpayers other than corporations.
<DELETED>Sec. 204. Temporary expansion of penalty-free retirement plan 
                            distributions for health insurance premiums 
                            of unemployed individuals.
     <DELETED>TITLE III--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

                <DELETED>Subtitle A--Two-Year Extensions

<DELETED>Sec. 301. Allowance of nonrefundable personal credits against 
                            regular and minimum tax liability.
<DELETED>Sec. 302. Credit for qualified electric vehicles.
<DELETED>Sec. 303. Credit for electricity produced from renewable 
                            resources.
<DELETED>Sec. 304. Work opportunity credit.
<DELETED>Sec. 305. Welfare-to-work credit.
<DELETED>Sec. 306. Deduction for clean-fuel vehicles and certain 
                            refueling property.
<DELETED>Sec. 307. Taxable income limit on percentage depletion for oil 
                            and natural gas produced from marginal 
                            properties.
<DELETED>Sec. 308. Qualified zone academy bonds.
<DELETED>Sec. 309. Cover over of tax on distilled spirits.
<DELETED>Sec. 310. Parity in the application of certain limits to 
                            mental health benefits.
<DELETED>Sec. 311. Delay in effective date of requirement for approved 
                            diesel or kerosene terminals.
                <DELETED>Subtitle B--One-Year Extensions

<DELETED>Sec. 321. One-year extension of availability of medical 
                            savings accounts.
               <DELETED>Subtitle C--Permanent Extensions

<DELETED>Sec. 331. Subpart F exemption for active financing.
                 <DELETED>Subtitle D--Other Provisions

<DELETED>Sec. 341. Excluded cancellation of indebtedness income of S 
                            corporation not to result in adjustment to 
                            basis of stock of shareholders.
<DELETED>Sec. 342. Limitation on use of nonaccrual experience method of 
                            accounting.
        <DELETED>TITLE IV--SUPPLEMENTAL REBATE; OTHER PROVISIONS

<DELETED>Sec. 401. Supplemental rebate.
<DELETED>Sec. 402. Special Reed Act transfer in fiscal year 2002.
      <DELETED>TITLE V--HEALTH CARE ASSISTANCE FOR THE UNEMPLOYED

<DELETED>Sec. 501. Health care assistance for the unemployed.

            <DELETED>TITLE I--BUSINESS PROVISIONS</DELETED>

<DELETED>SEC. 101. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY 
              ACQUIRED AFTER SEPTEMBER 10, 2001, AND BEFORE SEPTEMBER 
              11, 2004.</DELETED>

<DELETED>    (a) In General.--Section 168 (relating to accelerated cost 
recovery system) is amended by adding at the end the following new 
subsection:</DELETED>
<DELETED>    ``(k) Special Allowance for Certain Property Acquired 
After September 10, 2001, and Before September 11, 2004.--</DELETED>
        <DELETED>    ``(1) Additional allowance.--In the case of any 
        qualified property--</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Qualified property.--For purposes of this 
        subsection--</DELETED>
                <DELETED>    ``(A) In general.--The term `qualified 
                property' means property--</DELETED>
                        <DELETED>    ``(i)(I) to which this section 
                        applies which has a recovery period of 20 years 
                        or less or which is water utility property, 
                        or</DELETED>
                        <DELETED>    ``(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,</DELETED>
                        <DELETED>    ``(ii) the original use of which 
                        commences with the taxpayer after September 10, 
                        2001,</DELETED>
                        <DELETED>    ``(iii) which is--</DELETED>
                                <DELETED>    ``(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</DELETED>
                                <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(iv) which is placed in service 
                        by the taxpayer before January 1, 
                        2005.</DELETED>
                <DELETED>    ``(B) Exceptions.--</DELETED>
                        <DELETED>    ``(i) Alternative depreciation 
                        property.--The term `qualified property' shall 
                        not include any property to which the 
                        alternative depreciation system under 
                        subsection (g) applies, determined--</DELETED>
                                <DELETED>    ``(I) without regard to 
                                paragraph (7) of subsection (g) 
                                (relating to election to have system 
                                apply), and</DELETED>
                                <DELETED>    ``(II) after application 
                                of section 280F(b) (relating to listed 
                                property with limited business 
                                use).</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(iii) Repaired or reconstructed 
                        property.--Except as otherwise provided in 
                        regulations, the term `qualified property' 
                        shall not include any repaired or reconstructed 
                        property.</DELETED>
                        <DELETED>    ``(iv) Qualified leasehold 
                        improvement property.--The term `qualified 
                        property' shall not include any qualified 
                        leasehold improvement property (as defined in 
                        section 168(e)(6)).</DELETED>
                <DELETED>    ``(C) Special rules relating to original 
                use.--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) Sale-leasebacks.--For 
                        purposes of subparagraph (A)(ii), if property--
                        </DELETED>
                                <DELETED>    ``(I) is originally placed 
                                in service after September 10, 2001, by 
                                a person, and</DELETED>
                                <DELETED>    ``(II) sold and leased 
                                back by such person within 3 months 
                                after the date such property was 
                                originally placed in service,</DELETED>
                        <DELETED>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).</DELETED>
                <DELETED>    ``(D) Coordination with section 280f.--For 
                purposes of section 280F--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) Listed property.--The 
                        deduction allowable under paragraph (1) shall 
                        be taken into account in computing any 
                        recapture amount under section 
                        280F(b)(2).''</DELETED>
<DELETED>    (b) Allowance Against Alternative Minimum Tax.--</DELETED>
        <DELETED>    (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:</DELETED>
                        <DELETED>    ``(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.''</DELETED>
        <DELETED>    (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)''.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 102. TEMPORARY INCREASE IN EXPENSING UNDER SECTION 
              179.</DELETED>

<DELETED>    (a) In General.--The table contained in section 179(b)(1) 
(relating to dollar limitation) is amended to read as 
follows:</DELETED>

        <DELETED>``If the taxable year</DELETED>
                                                         The applicable
        <DELETED>  begins in:</DELETED>
                                                             amount is:
                <DELETED>  2001......................          $24,000 
                <DELETED>  2002 or 2003..............          $35,000 
                <DELETED>  2004 or thereafter........       $25,000.''.
<DELETED>    (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)''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 
2001.</DELETED>

<DELETED>SEC. 103. REPEAL OF ALTERNATIVE MINIMUM TAX ON 
              CORPORATIONS.</DELETED>

<DELETED>    (a) In General.--So much of section 55 as precedes 
subsection (b)(2) is amended to read as follows:</DELETED>

<DELETED>``SEC. 55. ALTERNATIVE MINIMUM TAX FOR TAXPAYERS OTHER THAN 
              CORPORATIONS.</DELETED>

<DELETED>    ``(a) In General.--In the case of a taxpayer other than a 
corporation, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a tax equal to the excess (if any) of--
</DELETED>
        <DELETED>    ``(1) the tentative minimum tax for the taxable 
        year, over</DELETED>
        <DELETED>    ``(2) the regular tax for the taxable 
        year.</DELETED>
<DELETED>    ``(b) Tentative Minimum Tax.--For purposes of this part--
</DELETED>
        <DELETED>    ``(1) Amount of tentative tax.--</DELETED>
                <DELETED>    ``(A) In general.--The tentative minimum 
                tax for the taxable year is the sum of--</DELETED>
                        <DELETED>    ``(i) 26 percent of so much of the 
                        taxable excess as does not exceed $175,000, 
                        plus</DELETED>
                        <DELETED>    ``(ii) 28 percent of so much of 
                        the taxable excess as exceeds 
                        $175,000.</DELETED>
                <DELETED>The amount determined under the preceding 
                sentence shall be reduced by the alternative minimum 
                tax foreign tax credit for the taxable year.</DELETED>
                <DELETED>    ``(B) Taxable excess.--For purposes of 
                this subsection, the term `taxable excess' means so 
                much of the alternative minimum taxable income for the 
                taxable year as exceeds the exemption amount.</DELETED>
                <DELETED>    ``(C) Married individual filing separate 
                return.--In the case of a married individual filing a 
                separate return, clause (i) shall be applied by 
                substituting `$87,500' for `$175,000' each place it 
                appears. For purposes of the preceding sentence, 
                marital status shall be determined under section 
                7703.''</DELETED>
<DELETED>    (b) Conforming Amendments.--</DELETED>
        <DELETED>    (1) Paragraph (3) of section 55(b) is amended by 
        striking ``paragraph (1)(A)(i)'' and inserting ``paragraph 
        (1)(A)''.</DELETED>
        <DELETED>    (2) Paragraph (1) of section 55(c) is amended by 
        striking ``, the section 936 credit allowable under section 
        27(b), and the Puerto Rico economic activity credit under 
        section 30A''.</DELETED>
        <DELETED>    (3)(A) Paragraph (1) of section 55(d) is amended 
        by--</DELETED>
                <DELETED>    (i) by striking ``for taxpayers other than 
                corporations'' in the heading, and</DELETED>
                <DELETED>    (ii) by striking ``In the case of a 
                taxpayer other than a corporation, the'' and inserting 
                ``The''.</DELETED>
        <DELETED>    (B) Section 55(d) is amended by striking paragraph 
        (2) and by redesignating paragraph (3) as paragraph 
        (2).</DELETED>
        <DELETED>    (C) Subparagraph (A) of section 55(d)(2), as so 
        redesignated is amended by striking ``or (2)''.</DELETED>
        <DELETED>    (4) Section 55 is amended by striking subsection 
        (e).</DELETED>
        <DELETED>    (5)(A) The designation and heading for subsection 
        (a) of section 56 is amended to read as follows:</DELETED>
<DELETED>    ``(a) General Rules.--''.</DELETED>
        <DELETED>    (B) Paragraph (1) of section 56(a) is amended by 
        striking subparagraph (D).</DELETED>
        <DELETED>    (C) Paragraph (6) of section 56(a) is amended--
        </DELETED>
                <DELETED>    (i) by striking ``paragraph (2) or 
                subsection (b)(2)'' and inserting ``paragraph (2) or 
                (9)'', and</DELETED>
                <DELETED>    (ii) by striking ``or (5), or subsection 
                (b)(2)'' and inserting ``(5), or (9)''.</DELETED>
        <DELETED>    (6)(A) Subsection (b) of section 56 is amended by 
        striking so much of such subsection as precedes paragraph (1) 
        and by redesignating paragraphs (1), (2), and (3) as paragraphs 
        (8), (9), and (10), respectively, of subsection (a).</DELETED>
        <DELETED>    (B) Paragraph (9) of section 56(a), as so 
        redesignated, is amended by striking subparagraph (C) and by 
        redesignating subparagraph (D) as subparagraph (C).</DELETED>
        <DELETED>    (7) Section 56 is amended by striking subsections 
        (c) and (g) and by redesignating subsections (d) and (e) as 
        subsections (b) and (c), respectively.</DELETED>
        <DELETED>    (8) Subparagraph (E) of section 57(a)(2) is 
        amended--</DELETED>
                <DELETED>    (A) by striking ``for independent 
                producers'' in the heading, and</DELETED>
                <DELETED>    (B) by striking clause (i) and inserting 
                the following new clause:</DELETED>
                        <DELETED>    ``(i) In general.--This paragraph 
                        shall not apply to any taxable year beginning 
                        after December 31, 1992.''</DELETED>
        <DELETED>    (9) Subsection (a) of section 58 is amended by 
        striking paragraph (3) and by redesignating paragraph (4) as 
        paragraph (3).</DELETED>
        <DELETED>    (10)(A) Section 59 is amended by striking 
        subsections (b) and (f) and by redesignating subsections (c), 
        (d), (e), (g), (h), (i), and (j) as subsections (b), (c), (d), 
        (e), (f), (g), and (h), respectively.</DELETED>
        <DELETED>    (B) Paragraph (2) of section 59(d), as so 
        redesignated, is amended by striking ``(determined without 
        regard to section 291)''.</DELETED>
        <DELETED>    (C) Sections 173(b), 174(f)(2), 263(c), 
        263A(c)(6), 616(e), 617(i), and 1016(a)(20) are each amended by 
        striking ``59(e)'' each place it appears and inserting 
        ``59(d)''.</DELETED>
        <DELETED>    (11) Subsection (d) of section 11 is amended by 
        striking ``the taxes imposed by subsection (a) and section 55'' 
        and inserting ``the tax imposed by subsection (a)''.</DELETED>
        <DELETED>    (12) Section 12 is amended by striking paragraph 
        (7).</DELETED>
        <DELETED>    (13) Paragraph (6) of section 29(b) is amended to 
        read as follows:</DELETED>
        <DELETED>    ``(6) Application with other credits.--The credit 
        allowed by subsection (a) for any taxable year shall not exceed 
        the excess (if any) of the regular tax for the taxable year 
        reduced by the sum of the credits allowable under subpart A and 
        section 27. In the case of a taxpayer other than a corporation, 
        such excess shall be further reduced (but not below zero) by 
        the tentative minimum tax for the taxable year.''</DELETED>
        <DELETED>    (14) Paragraph (3) of section 30(b) is amended to 
        read as follows:</DELETED>
        <DELETED>    ``(3) Application with other credits.--The credit 
        allowed by subsection (a) for any taxable year shall not exceed 
        the excess (if any) of the regular tax for the taxable year 
        reduced by the sum of the credits allowable under subpart A and 
        sections 27 and 29. In the case of a taxpayer other than a 
        corporation, such excess shall be further reduced (but not 
        below zero) by the tentative minimum tax for the taxable 
        year.''</DELETED>
        <DELETED>    (15)(A) Paragraph (1) of section 38(c) is amended 
        to read as follows:</DELETED>
        <DELETED>    ``(1) In general.--</DELETED>
                <DELETED>    ``(A) Corporations.--In the case of a 
                corporation, the credit allowed under subsection (a) 
                for any taxable year shall not exceed the excess (if 
                any) of the taxpayer's net income tax over 25 percent 
                of so much of the taxpayer's net regular tax liability 
                as exceeds $25,000.</DELETED>
                <DELETED>    ``(B) Taxpayers other than corporations.--
                In the case of a taxpayer other than a corporation, the 
                credit allowed under subsection (a) for any taxable 
                year shall not exceed the excess (if any) of the 
                taxpayer's net income tax over the greater of--
                </DELETED>
                        <DELETED>    ``(i) the tentative minimum tax 
                        for the taxable year, or</DELETED>
                        <DELETED>    ``(ii) 25 percent of so much of 
                        the taxpayer's net regular tax liability as 
                        exceeds $25,000.</DELETED>
                <DELETED>    ``(C) Definitions.--For purposes of this 
                paragraph--</DELETED>
                        <DELETED>    ``(i) the term `net income tax' 
                        means the sum of the regular tax liability and 
                        the tax imposed by section 55, reduced by the 
                        credits allowable under subparts A and B of 
                        this part, and</DELETED>
                        <DELETED>    ``(ii) the term `net regular tax 
                        liability' means the regular tax liability 
                        reduced by the sum of the credits allowable 
                        under subparts A and B of this 
                        part.''</DELETED>
        <DELETED>    (B) Clause (ii) of section 38(c)(2)(A) is amended 
        to read as follows:</DELETED>
                        <DELETED>    ``(ii) for purposes of applying 
                        paragraph (1) to such credit--</DELETED>
                                <DELETED>    ``(I) the applicable 
                                limitation under paragraph (1) (as 
                                modified by subclause (II) in the case 
                                of a taxpayer other than a corporation) 
                                shall be reduced by the credit allowed 
                                under subsection (a) for the taxable 
                                year (other than the empowerment zone 
                                employment credit), and</DELETED>
                                <DELETED>    ``(II) in the case of a 
                                taxpayer other than a corporation, 75 
                                percent of the tentative minimum tax 
                                shall be substituted for the tentative 
                                minimum tax under subparagraph (B)(i) 
                                thereof.''</DELETED>
        <DELETED>    (C) Paragraph (3) of section 38(c) is amended by 
        striking ``subparagraph (B) of'' each place it 
        appears.</DELETED>
        <DELETED>    (16)(A) Subclause (I) of section 53(d)(1)(B)(ii) 
        is amended by striking ``subsection (b)(1)'' and inserting 
        ``subsection (a)(8)''.</DELETED>
        <DELETED>    (B) Clause (iv) of section 53(d)(1)(B) is hereby 
        repealed.</DELETED>
        <DELETED>    (17)(A) Part VII of subchapter A of chapter 1 is 
        hereby repealed.</DELETED>
        <DELETED>    (B) The table of parts for subchapter A of chapter 
        1 is amended by striking the item relating to part 
        VII.</DELETED>
        <DELETED>    (C) Paragraph (2) of section 26(b) is amended by 
        striking subparagraph (B) and by redesignating the succeeding 
        subparagraphs accordingly.</DELETED>
        <DELETED>    (D) Subsection (c) of section 30A is amended by 
        striking paragraph (1) and redesignating the succeeding 
        paragraphs accordingly.</DELETED>
        <DELETED>    (E) Subsection (a) of section 164 is amended by 
        striking paragraph (5).</DELETED>
        <DELETED>    (F) Subsection (a) of section 275 is amended by 
        striking ``Paragraph (1) shall not apply to the tax imposed by 
        section 59A.''</DELETED>
        <DELETED>    (G) Paragraph (1) of section 882(a) is amended by 
        striking ``59A,''.</DELETED>
        <DELETED>    (H) Paragraph (3) of section 936(a) is amended by 
        striking subparagraph (A) and redesignating the succeeding 
        subparagraphs accordingly.</DELETED>
        <DELETED>    (I) Subsection (a) of section 1561 is amended by 
        adding ``and'' at the end of paragraph (2), by striking ``, 
        and'' at the end of paragraph (3) and inserting a period, and 
        by striking paragraph (4).</DELETED>
        <DELETED>    (J) Subparagraph (A) of section 6425(c)(1) is 
        amended by adding ``plus'' at the end of clause (i), by 
        striking ``plus'' at the end of clause (ii) and inserting 
        ``over'', and by striking clause (iii).</DELETED>
        <DELETED>    (18) Section 382(l) (relating to limitation on net 
        operating loss carryforwards and certain built-in losses 
        following ownership change) is amended by striking paragraph 
        (7) and by redesignating paragraph (8) as paragraph 
        (7).</DELETED>
        <DELETED>    (19) Paragraph (2) of section 815(c) (relating to 
        distributions to shareholders from pre-1984 policyholders 
        surplus account) is amended by striking the last 
        sentence.</DELETED>
        <DELETED>    (20) Section 847 (relating to special estimated 
        tax payments) is amended--</DELETED>
                <DELETED>    (A) in paragraph (9), by striking the last 
                sentence; and</DELETED>
                <DELETED>    (B) in paragraph (10), by inserting 
                ``and'' at the end of subparagraph (A) and by striking 
                subparagraph (B) and redesignating subparagraph (C) as 
                subparagraph (B).</DELETED>
        <DELETED>    (21) Section 848 (relating to capitalization of 
        certain policy acquisition expenses) is amended by striking 
        subsection (i) and by redesignating subsection (j) as 
        subsection (i).</DELETED>
        <DELETED>    (22) Paragraph (1) of section 882(a) (relating to 
        tax on income of foreign corporations connected with United 
        States business) is amended by striking ``55,''.</DELETED>
        <DELETED>    (23) Paragraph (1) of section 962(a) (relating to 
        election by individuals to be subject to tax at corporate 
        rates) is amended by striking ``sections 11 and 55'' and 
        inserting ``section 11''.</DELETED>
        <DELETED>    (24) Subsection (a) of section 1561 (relating to 
        limitations on certain multiple tax benefits in the case of 
        certain controlled corporations) is amended by striking the 
        last sentence.</DELETED>
        <DELETED>    (25) Subparagraph (A) of section 6425(c)(1) 
        (defining income tax liability), as amended by paragraph (17) 
        is amended to read as follows:</DELETED>
                <DELETED>    ``(A) the tax imposed by section 11 or 
                1201(a), or subchapter L of chapter 1, whichever is 
                applicable, over''.</DELETED>
        <DELETED>    (26)(A) Paragraph (2) of section 6655(e) is 
        amended--</DELETED>
                <DELETED>    (i) by striking ``, alternative minimum 
                taxable income, and modified alternative minimum 
                taxable income'' each place it appears in subparagraphs 
                (A) and (B)(i), and</DELETED>
                <DELETED>    (ii) by striking clause (iii) of 
                subparagraph (B).</DELETED>
        <DELETED>    (B) Subparagraph (A) of section 6655(g)(1) 
        (relating to failure by corporation to pay estimated income 
        tax), is amended to read as follows:</DELETED>
                <DELETED>    ``(A) the sum of--</DELETED>
                        <DELETED>    ``(i) the tax imposed by section 
                        11 or 1201(a), or subchapter L of chapter 1, 
                        whichever applies, plus</DELETED>
                        <DELETED>    ``(ii) the tax imposed by section 
                        887, over''.</DELETED>
        <DELETED>    (27) The table of sections for part VI of 
        subchapter A of chapter 1 is amended by striking the item 
        relating to section 55 and inserting the following new 
        item:</DELETED>

                              <DELETED>``Sec. 55. Alternative minimum 
                                        tax for taxpayers other than 
                                        corporations.''
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 
2000.</DELETED>
<DELETED>    (d) Refund of Unused Minimum Tax Credit.--</DELETED>
        <DELETED>    (1) In general.--In the case of a corporation--
        </DELETED>
                <DELETED>    (A) section 53(c) of the Internal Revenue 
                Code of 1986 shall not apply to such corporation's 
                first taxable year beginning after December 31, 2000, 
                and</DELETED>
                <DELETED>    (B) for purposes of such Code (other than 
                section 53 of such Code), the credit allowed by section 
                53 of such Code for such first taxable year shall be 
                treated as if it were allowed by subpart C of part IV 
                of subchapter A of chapter 1 of such Code (relating to 
                refundable credits).</DELETED>
        <DELETED>    (2) Special rules relating to carrybacks.--In the 
        case of a carryback of a corporation from a taxable year 
        beginning after December 31, 2000, to a taxable year beginning 
        before January 1, 2001--</DELETED>
                <DELETED>    (A) the tax imposed by section 55 of such 
                Code shall not be increased or decreased by reason of 
                such a carryback,</DELETED>
                <DELETED>    (B) tentative minimum tax shall not be 
                increased or decreased by reason of such a carryback 
                for purposes of determining the amount of any credit 
                other than the credit allowed by section 38, 
                and</DELETED>
                <DELETED>    (C) the amount of such a carryback which 
                is taken into account in determining tentative minimum 
                tax for purposes of section 38(c) shall be the amount 
                of such carryback which is taken into account in 
                determining regular tax liability.</DELETED>

<DELETED>SEC. 104. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED 
              FOR 5 YEARS.</DELETED>

<DELETED>    (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:</DELETED>
                <DELETED>    ``(H) In the case of a taxpayer which has 
                a net operating loss for any taxable year ending after 
                September 10, 2001, and before September 11, 2004, 
                subparagraph (A)(i) shall be applied by substituting 
                `5' for `2' and subparagraph (F) shall not 
                apply.''.</DELETED>
<DELETED>    (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:</DELETED>
<DELETED>    ``(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.''.</DELETED>
<DELETED>    (c) Temporary Suspension of 90 Percent Limit on Certain 
NOL Carrybacks.--Subparagraph (A) of section 56(b)(1) (relating to 
general rule defining alternative tax net operating loss deduction), as 
amended by section 103, is amended to read as follows:</DELETED>
                <DELETED>    ``(A) the amount of such deduction shall 
                not exceed the sum of--</DELETED>
                        <DELETED>    ``(i) the lesser of--</DELETED>
                                <DELETED>    ``(I) the amount of such 
                                deduction attributable to net operating 
                                losses (other than the deduction 
                                attributable to carrybacks described in 
                                clause (ii)(I)), or</DELETED>
                                <DELETED>    ``(II) 90 percent of 
                                alternate minimum taxable income 
                                determined without regard to such 
                                deduction, plus</DELETED>
                        <DELETED>    ``(ii) the lesser of--</DELETED>
                                <DELETED>    ``(I) the amount of such 
                                deduction attributable to carrybacks of 
                                net operating losses for taxable years 
                                ending after September 10, 2001, and 
                                before September 11, 2004, or</DELETED>
                                <DELETED>    ``(II) alternate minimum 
                                taxable income determined without 
                                regard to such deduction reduced by the 
                                amount determined under clause (i), 
                                and''.</DELETED>
<DELETED>    (d) Effective Date.--The amendments made by this section 
shall apply to net operating losses for taxable years ending after 
September 10, 2001.</DELETED>

<DELETED>SEC. 105. RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN 
              LEASEHOLD IMPROVEMENTS.</DELETED>

<DELETED>    (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:</DELETED>
                        <DELETED>    ``(iv) any qualified leasehold 
                        improvement property.''.</DELETED>
<DELETED>    (b) Qualified Leasehold Improvement Property.--Subsection 
(e) of section 168 is amended by adding at the end the following new 
paragraph:</DELETED>
        <DELETED>    ``(6) Qualified leasehold improvement property.--
        </DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(i) such improvement is made 
                        under or pursuant to a lease (as defined in 
                        subsection (h)(7))--</DELETED>
                                <DELETED>    ``(I) by the lessee (or 
                                any sublessee) of such portion, 
                                or</DELETED>
                                <DELETED>    ``(II) by the lessor of 
                                such portion,</DELETED>
                        <DELETED>    ``(ii) such portion is to be 
                        occupied exclusively by the lessee (or any 
                        sublessee) of such portion, and</DELETED>
                        <DELETED>    ``(iii) such improvement is placed 
                        in service more than 3 years after the date the 
                        building was first placed in service.</DELETED>
                <DELETED>    ``(B) Certain improvements not included.--
                Such term shall not include any improvement for which 
                the expenditure is attributable to--</DELETED>
                        <DELETED>    ``(i) the enlargement of the 
                        building,</DELETED>
                        <DELETED>    ``(ii) any elevator or 
                        escalator,</DELETED>
                        <DELETED>    ``(iii) any structural component 
                        benefiting a common area, and</DELETED>
                        <DELETED>    ``(iv) the internal structural 
                        framework of the building.</DELETED>
                <DELETED>    ``(C) Definitions and special rules.--For 
                purposes of this paragraph--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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--
                        </DELETED>
                                <DELETED>    ``(I) members of an 
                                affiliated group (as defined in section 
                                1504), and</DELETED>
                                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(D) Improvements made by lessor.--
                </DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(ii) Exception for changes in 
                        form of business.--Property shall not cease to 
                        be qualified leasehold improvement property 
                        under clause (i) by reason of--</DELETED>
                                <DELETED>    ``(I) death,</DELETED>
                                <DELETED>    ``(II) a transaction to 
                                which section 381(a) applies, 
                                or</DELETED>
                                <DELETED>    ``(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.''</DELETED>
<DELETED>    (c) Requirement To Use Straight Line Method.--Paragraph 
(3) of section 168(b) is amended by adding at the end the following new 
subparagraph:</DELETED>
                <DELETED>``(G) Qualified leasehold improvement property 
                described in subsection (e)(6).''.</DELETED>
<DELETED>    (d) Alternative System.--The table contained in section 
168(g)(3)(B) is amended by adding at the end the following new 
item:</DELETED>

<DELETED>  ``(E)(iv).................................       15''.      
<DELETED>    (e) Effective Date.--The amendments made by this section 
shall apply to qualified leasehold improvement property placed in 
service after September 10, 2001.</DELETED>

           <DELETED>TITLE II--INDIVIDUAL PROVISIONS</DELETED>

<DELETED>SEC. 201. ACCELERATION OF 25 PERCENT INDIVIDUAL INCOME TAX 
              RATE.</DELETED>

<DELETED>    (a) In General.--The table contained in paragraph (2) of 
section 1(i) (relating to reductions in rates after June 30, 2001) is 
amended--</DELETED>
        <DELETED>    (1) by striking ``27.0%'' and inserting ``25.0%'', 
        and</DELETED>
        <DELETED>    (2) by striking ``26.0%'' and inserting 
        ``25.0%''.</DELETED>
<DELETED>    (b) Reduction Not To Increase Minimum Tax.--</DELETED>
        <DELETED>    (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)''.</DELETED>
        <DELETED>    (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)''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 
2001.</DELETED>
<DELETED>    (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 .</DELETED>

<DELETED>SEC. 202. REPEAL OF 5-YEAR HOLDING PERIOD REQUIREMENT FOR 
              REDUCED INDIVIDUAL CAPITAL GAINS RATES.</DELETED>

<DELETED>    (a) In General.--</DELETED>
        <DELETED>    (1) Sections 1(h)(1)(B) and 55(b)(3)(B) are each 
        amended by striking ``10 percent'' and inserting ``8 
        percent''.</DELETED>
        <DELETED>    (2) The following sections are each amended by 
        striking ``20 percent'' and inserting ``18 percent'':</DELETED>
                <DELETED>    (A) Section 1(h)(1)(C).</DELETED>
                <DELETED>    (B) Section 55(b)(3)(C).</DELETED>
                <DELETED>    (C) Section 1445(e)(1).</DELETED>
                <DELETED>    (D) The second sentence of section 
                7518(g)(6)(A).</DELETED>
                <DELETED>    (E) The second sentence of section 
                607(h)(6)(A) of the Merchant Marine Act, 
                1936.</DELETED>
<DELETED>    (b) Conforming Amendments.--</DELETED>
        <DELETED>    (1) Subsection (e) of section 311 of the Taxpayer 
        Relief Act of 1997 is repealed.</DELETED>
        <DELETED>    (2) Section 1(h) is amended--</DELETED>
                <DELETED>    (A) by striking paragraphs (2) and 
                (9),</DELETED>
                <DELETED>    (B) by redesignating paragraphs (3) 
                through (8) as paragraphs (2) through (7), 
                respectively, and</DELETED>
                <DELETED>    (C) by redesignating paragraphs (10), 
                (11), and (12) as paragraphs (8), (9), and (10), 
                respectively.</DELETED>
        <DELETED>    (3) Paragraph (3) of section 55(b) is amended by 
        striking ``In the case of taxable years beginning after 
        December 31, 2000, rules similar to the rules of section 
        1(h)(2) shall apply for purposes of subparagraphs (B) and 
        (C).''.</DELETED>
        <DELETED>    (4) Paragraph (7) of section 57(a) is amended by 
        striking the last sentence and by striking ``42 percent'' and 
        inserting ``28 percent''.</DELETED>
<DELETED>    (c) Transitional Rules for Taxable Years Which Include 
October 12, 2001.--For purposes of applying section 1(h) of the 
Internal Revenue Code of 1986 in the case of a taxable year which 
includes October 12, 2001--</DELETED>
        <DELETED>    (1) The amount of tax determined under 
        subparagraph (B) of section 1(h)(1) of such Code shall be the 
        sum of--</DELETED>
                <DELETED>    (A) 8 percent of the lesser of--</DELETED>
                        <DELETED>    (i) the sum of--</DELETED>
                                <DELETED>    (I) the net capital gain 
                                taking into account only gain or loss 
                                properly taken into account for the 
                                portion of the taxable year on or after 
                                October 12, (determined without regard 
                                to collectibles gain or loss, gain 
                                described in section (1)(h)(6)(A)(i) of 
                                such Code, and section 1202 gain), 
                                and</DELETED>
                                <DELETED>    (II) the qualified 5-year 
                                gain (as defined in section 1(h)(9) of 
                                the Internal Revenue Code of 1986, as 
                                in effect on the day before the date of 
                                the enactment of this Act) properly 
                                taken into account for the portion of 
                                the taxable year before October 12, 
                                2001, or</DELETED>
                        <DELETED>    (ii) the amount on which a tax is 
                        determined under such subparagraph (without 
                        regard to this subsection), plus</DELETED>
                <DELETED>    (B) 10 percent of the excess (if any) of--
                </DELETED>
                        <DELETED>    (i) the amount on which a tax is 
                        determined under such subparagraph (without 
                        regard to this subsection), over</DELETED>
                        <DELETED>    (ii) the amount on which a tax is 
                        determined under subparagraph (A).</DELETED>
        <DELETED>    (2) The amount of tax determined under 
        subparagraph (C) of section (1)(h)(1) of such Code shall be the 
        sum of--</DELETED>
                <DELETED>    (A) 18 percent of the lesser of--
                </DELETED>
                        <DELETED>    (i) the excess (if any) of the 
                        amount of net capital gain determined under 
                        subparagraph (A)(i)(I) of paragraph (1) of this 
                        subsection over the amount on which a tax is 
                        determined under subparagraph (A) of paragraph 
                        (1) of this subsection, or</DELETED>
                        <DELETED>    (ii) the amount on which a tax is 
                        determined under such subparagraph (C) (without 
                        regard to this subsection), plus</DELETED>
                <DELETED>    (B) 20 percent of the excess (if any) of--
                </DELETED>
                        <DELETED>    (i) the amount on which a tax is 
                        determined under such subparagraph (C) (without 
                        regard to this subsection), over</DELETED>
                        <DELETED>    (ii) the amount on which a tax is 
                        determined under subparagraph (A) of this 
                        paragraph.</DELETED>
        <DELETED>    (3) For purposes of applying section 55(b)(3) of 
        such Code, rules similar to the rules of paragraphs (1) and (2) 
        of this subsection shall apply.</DELETED>
        <DELETED>    (4) In applying this subsection with respect to 
        any pass-thru entity, the determination of when gains and loss 
        are properly taken into account shall be made at the entity 
        level.</DELETED>
        <DELETED>    (5) Terms used in this subsection which are also 
        used in section 1(h) of such Code shall have the respective 
        meanings that such terms have in such section.</DELETED>
<DELETED>    (d) Effective Dates.--</DELETED>
        <DELETED>    (1) In general.--Except as otherwise provided by 
        this subsection, the amendments made by this section shall 
        apply to taxable years ending on or after October 12, 
        2001.</DELETED>
        <DELETED>    (2) Withholding.--The amendment made by subsection 
        (a)(2)(C) shall apply to amounts paid after the date of the 
        enactment of this Act.</DELETED>
        <DELETED>    (3) Election to recognize gain on assests held on 
        january 1, 2001.--The repeal made by subsection (b)(1) shall 
        take effect as if included in section 311 of the Taxpayer 
        Relief Act of 1997, and the Internal Revenue Code of 1986 shall 
        be applied and administered as if subsection (e) of such 
        section 311 had never been enacted.</DELETED>
        <DELETED>    (4) Small business stock.--The amendments made by 
        subsection (b)(4) shall apply to dispositions on or after 
        October 12, 2001.</DELETED>

<DELETED>SEC. 203. TEMPORARY INCREASE IN DEDUCTION FOR CAPITAL LOSSES 
              OF TAXPAYERS OTHER THAN CORPORATIONS.</DELETED>

<DELETED>    (a) In General.--Subsection (b) of section 1211 (relating 
to limitation on capital losses for taxpayers other than corporations) 
is amended by adding at the end the following flush sentence:</DELETED>
<DELETED>``Paragraph (1) shall be applied by substituting `$4,000' for 
`$3,000' and `$2,000' for `$1,500' in the case of taxable years 
beginning in 2001, and by substituting `$5,000' for `$3,000' and 
`$2,500' for `$1,500' in the case of taxable years beginning in 
2002.''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall apply to taxable years beginning after December 31, 
2000.</DELETED>

<DELETED>SEC. 204. TEMPORARY EXPANSION OF PENALTY-FREE RETIREMENT PLAN 
              DISTRIBUTIONS FOR HEALTH INSURANCE PREMIUMS OF UNEMPLOYED 
              INDIVIDUALS.</DELETED>

<DELETED>    (a) In General.--Subparagraph (D) of section 72(t)(2) is 
amended by adding at the end the following new clause:</DELETED>
                        <DELETED>    ``(iv) Special rules for 
                        individuals receiving unemployment compensation 
                        after september 10, 2001, and before january 1, 
                        2003.--In the case of an individual who 
                        receives unemployment compensation for 4 
                        consecutive weeks after September 10, 2001, and 
                        before January 1, 2003--</DELETED>
                                <DELETED>    ``(I) clause (i) shall 
                                apply to distributions from all 
                                qualified retirement plans (as defined 
                                in section 4974(c)), and</DELETED>
                                <DELETED>    ``(II) such 4 consecutive 
                                weeks shall be substituted for the 12 
                                consecutive weeks referred to in 
                                subclause (I) of clause 
                                (i).''</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by this section 
shall apply to distributions after the date of the enactment of this 
Act.</DELETED>

<DELETED>TITLE III--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS</DELETED>

           <DELETED>Subtitle A--Two-Year Extensions</DELETED>

<DELETED>SEC. 301. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS AGAINST 
              REGULAR AND MINIMUM TAX LIABILITY.</DELETED>

<DELETED>    (a) In General.--Paragraph (2) of section 26(a) is 
amended--</DELETED>
        <DELETED>    (1) by striking ``rule for 2000 and 2001.--'' and 
        inserting ``rule for 2000, 2001, 2002, and 2003.--'', 
        and</DELETED>
        <DELETED>    (2) by striking ``during 2000 or 2001,'' and 
        inserting ``during 2000, 2001, 2002, or 2003,''.</DELETED>
<DELETED>    (b) Conforming Amendments.--</DELETED>
        <DELETED>    (1) Section 904(h) is amended by striking ``during 
        2000 or 2001'' and inserting ``during 2000, 2001, 2002, or 
        2003''.</DELETED>
        <DELETED>    (2) The amendments made by sections 201(b), 
        202(f), and 618(f) of the Economic Growth and Tax Relief 
        Reconciliation Act of 2001 shall not apply to taxable years 
        beginning during 2002 and 2003.</DELETED>
<DELETED>    (c) Technical Correction.--Section 24(d)(1)(B) is amended 
by striking ``amount of credit allowed by this section'' and inserting 
``aggregate amount of credits allowed by this subpart''.</DELETED>
<DELETED>    (d) Effective Dates.--</DELETED>
        <DELETED>    (1) The amendments made by subsections (a) and (b) 
        shall apply to taxable years beginning after December 31, 
        2001.</DELETED>
        <DELETED>    (2) The amendment made by subsection (c) shall 
        apply to taxable years beginning after December 31, 
        2000.</DELETED>

<DELETED>SEC. 302. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.</DELETED>

<DELETED>    (a) In General.--Section 30 is amended--</DELETED>
        <DELETED>    (1) in subsection (b)(2)--</DELETED>
                <DELETED>    (A) by striking ``December 31, 2001,'' and 
                inserting ``December 31, 2003,'', and</DELETED>
                <DELETED>    (B) in subparagraphs (A), (B), and (C), by 
                striking ``2002'', ``2003'', and ``2004'', 
                respectively, and inserting ``2004'', ``2005'', and 
                ``2006'', respectively, and</DELETED>
        <DELETED>    (2) in subsection (e), by striking ``December 31, 
        2004'' and inserting ``December 31, 2006''.</DELETED>
<DELETED>    (b) Conforming Amendments.--</DELETED>
        <DELETED>    (1) Subparagraph (C) of section 280F(a)(1) is 
        amended by adding at the end the following new clause</DELETED>
                        <DELETED>    ``(iii) Application of 
                        subparagraph.--This subparagraph shall apply to 
                        property placed in service after August 5, 
                        1997, and before January 1, 2007.''.</DELETED>
        <DELETED>    (2) Subsection (b) of section 971 of the Taxpayer 
        Relief Act of 1997 is amended by striking ``and before January 
        1, 2005''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act.</DELETED>

<DELETED>SEC. 303. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE 
              RESOURCES.</DELETED>

<DELETED>    (a) In General.--Subparagraphs (A), (B), and (C) of 
section 45(c)(3) are each amended by striking ``2002'' and inserting 
``2004''.</DELETED>
<DELETED>    (b) Effective Date.--The amendments made by subsection (a) 
shall take effect on the date of the enactment of this Act.</DELETED>

<DELETED>SEC. 304. WORK OPPORTUNITY CREDIT.</DELETED>

<DELETED>    (a) In General.--Subparagraph (B) of section 51(c)(4) is 
amended by striking ``2001'' and inserting ``2003''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall apply to individuals who begin work for the employer after 
December 31, 2001.</DELETED>

<DELETED>SEC. 305. WELFARE-TO-WORK CREDIT.</DELETED>

<DELETED>    (a) In General.--Subsection (f) of section 51A is amended 
by striking ``2001'' and inserting ``2003''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall apply to individuals who begin work for the employer after 
December 31, 2001.</DELETED>

<DELETED>SEC. 306. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN 
              REFUELING PROPERTY.</DELETED>

<DELETED>    (a) In General.--Section 179A is amended--</DELETED>
        <DELETED>    (1) in subsection (b)(1)(B)--</DELETED>
                <DELETED>    (A) by striking ``December 31, 2001,'' and 
                inserting ``December 31, 2003,'', and</DELETED>
                <DELETED>    (B) in clauses (i), (ii), and (iii), by 
                striking ``2002'', ``2003'', and ``2004'', 
                respectively, and inserting ``2004'', ``2005'', and 
                ``2006'', respectively, and</DELETED>
        <DELETED>    (2) in subsection (f), by striking ``December 31, 
        2004'' and inserting ``December 31, 2006''.</DELETED>
<DELETED>    (b) Effective Date.--The amendments made by subsection (a) 
shall take effect on the date of the enactment of this Act.</DELETED>

<DELETED>SEC. 307. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR OIL 
              AND NATURAL GAS PRODUCED FROM MARGINAL 
              PROPERTIES.</DELETED>

<DELETED>    (a) In General.--Subparagraph (H) of section 613A(c)(6) is 
amended by striking ``2002'' and inserting ``2004''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall apply to taxable years beginning after December 31, 
2001.</DELETED>

<DELETED>SEC. 308. QUALIFIED ZONE ACADEMY BONDS.</DELETED>

<DELETED>    (a) In General.--Paragraph (1) of section 1397E(e) is 
amended by striking ``2000, and 2001'' and inserting ``2000, 2001, 
2002, and 2003''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall take effect on the date of the enactment of this Act.</DELETED>

<DELETED>SEC. 309. COVER OVER OF TAX ON DISTILLED SPIRITS.</DELETED>

<DELETED>    (a) In General.--Paragraph (1) of section 7652(f) is 
amended by striking ``January 1, 2002'' and inserting ``January 1, 
2004''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall take effect on the date of the enactment of this Act.</DELETED>

<DELETED>SEC. 310. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
              MENTAL HEALTH BENEFITS.</DELETED>

<DELETED>    (a) In General.--Subsection (f) of section 9812 is amended 
by striking ``2001'' and inserting ``2003''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
shall apply to plan years beginning after December 31, 2001.</DELETED>

<DELETED>SEC. 311. DELAY IN EFFECTIVE DATE OF REQUIREMENT FOR APPROVED 
              DIESEL OR KEROSENE TERMINALS.</DELETED>

<DELETED>    Paragraph (2) of section 1032(f) of the Taxpayer Relief 
Act of 1997 (Public Law 105-34) is amended by striking ``January 1, 
2002'' and inserting ``January 1, 2004''.</DELETED>

           <DELETED>Subtitle B--One-Year Extensions</DELETED>

<DELETED>SEC. 321. ONE-YEAR EXTENSION OF AVAILABILITY OF MEDICAL 
              SAVINGS ACCOUNTS.</DELETED>

<DELETED>    (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''.</DELETED>
<DELETED>    (b) Conforming Amendments.--</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (2) Subparagraph (A) of section 220(j)(4) is 
        amended by striking ``and 2001'' and inserting ``2001, and 
        2002''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act.</DELETED>

          <DELETED>Subtitle C--Permanent Extensions</DELETED>

<DELETED>SEC. 331. SUBPART F EXEMPTION FOR ACTIVE FINANCING.</DELETED>

<DELETED>    (a) In General.--</DELETED>
        <DELETED>    (1) Section 953(e)(10) is amended--</DELETED>
                <DELETED>    (A) by striking ``, and before January 1, 
                2002,'', and</DELETED>
                <DELETED>    (B) by striking the second 
                sentence.</DELETED>
        <DELETED>    (2) Section 954(h)(9) is amended by striking ``, 
        and before January 1, 2002,''.</DELETED>
<DELETED>    (b) Life Insurance and Annuity Contracts.--</DELETED>
        <DELETED>    (1) In general.--Subparagraph (B) of section 
        954(i)(4) is amended to read as follows:</DELETED>
                <DELETED>    ``(B) Life insurance and annuity 
                contracts.--</DELETED>
                        <DELETED>    ``(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--</DELETED>
                                <DELETED>    ``(I) the net surrender 
                                value of such contract (as defined in 
                                section 807(e)(1)(A)), or</DELETED>
                                <DELETED>    ``(II) the reserve 
                                determined under paragraph 
                                (5).</DELETED>
                        <DELETED>    ``(ii) Ruling request.--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, the Secretary determines that the 
                        factors taken into account in determining the 
                        foreign statement reserve provide an 
                        appropriate means of measuring 
                        income.''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 
2001.</DELETED>

            <DELETED>Subtitle D--Other Provisions</DELETED>

<DELETED>SEC. 341. EXCLUDED CANCELLATION OF INDEBTEDNESS INCOME OF S 
              CORPORATION NOT TO RESULT IN ADJUSTMENT TO BASIS OF STOCK 
              OF SHAREHOLDERS.</DELETED>

<DELETED>    (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''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by this section 
shall apply to discharges of indebtedness after October 11, 2001, in 
taxable years ending after such date.</DELETED>

<DELETED>SEC. 342. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD OF 
              ACCOUNTING.</DELETED>

<DELETED>    (a) In General.--Paragraph (5) of section 448(d) is 
amended to read as follows:</DELETED>
        <DELETED>    ``(5) Special rule for certain services.--
        </DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(i) such services are in fields 
                        referred to in paragraph (2)(A), or</DELETED>
                        <DELETED>    ``(ii) such person meets the gross 
                        receipts test of subsection (c) for all prior 
                        taxable years.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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 only if such computation or 
                formula clearly reflects the taxpayer's 
                experience.''.</DELETED>
<DELETED>    (b) Effective Date.--</DELETED>
        <DELETED>    (1) In general.--The amendments made by this 
        section shall apply to taxable years ending after the date of 
        the enactment of this Act.</DELETED>
        <DELETED>    (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--</DELETED>
                <DELETED>    (A) such change shall be treated as 
                initiated by the taxpayer,</DELETED>
                <DELETED>    (B) such change shall be treated as made 
                with the consent of the Secretary of the Treasury, 
                and</DELETED>
                <DELETED>    (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.</DELETED>

   <DELETED>TITLE IV--SUPPLEMENTAL REBATE; OTHER PROVISIONS</DELETED>

<DELETED>SEC. 401. SUPPLEMENTAL REBATE.</DELETED>

<DELETED>    (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:</DELETED>
<DELETED>    ``(f) Supplemental Rebate.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Supplemental refund amount.--For purposes of 
        this subsection, the supplemental refund amount is an amount 
        equal to the excess (if any) of--</DELETED>
                <DELETED>    ``(A)(i) $600 in the case of taxpayers to 
                whom section 1(a) applies,</DELETED>
                <DELETED>    ``(ii) $500 in the case of taxpayers to 
                whom section 1(b) applies, and</DELETED>
                <DELETED>    ``(iii) $300 in the case of taxpayers to 
                whom subsections (c) or (d) of section 1 applies, 
                over</DELETED>
                <DELETED>    ``(B) the taxpayer's advance refund amount 
                under subsection (e).</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(4) No interest.--No interest shall be allowed 
        on any overpayment attributable to this subsection.''</DELETED>
<DELETED>    (b) Conforming Amendments.--</DELETED>
        <DELETED>    (1) Subparagraph (A) of section 6428(d)(1) is 
        amended by striking ``subsection (e)'' and inserting 
        ``subsections (e) and (f)''.</DELETED>
        <DELETED>    (2) Subparagraph (B) of section 6428(d)(1) is 
        amended by striking ``subsection (e)'' and inserting 
        ``subsection (e) or (f)''.</DELETED>
        <DELETED>    (3) Paragraph (3) of section 6428(e) is amended by 
        striking ``December 31, 2001'' and inserting ``the date of the 
        enactment of the Economic Security and Recovery Act of 
        2001''.</DELETED>
<DELETED>    (c) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act.</DELETED>

<DELETED>SEC. 402. SPECIAL REED ACT TRANSFER IN FISCAL YEAR 
              2002.</DELETED>

<DELETED>    (a) Repeal of Certain Provisions Added by the Balanced 
Budget Act of 1997.--</DELETED>
        <DELETED>    (1) In general.--The following provisions of 
        section 903 of the Social Security Act (42 U.S.C. 1103) are 
        repealed:</DELETED>
                <DELETED>    (A) Paragraph (3) of subsection 
                (a).</DELETED>
                <DELETED>    (B) The last sentence of subsection 
                (c)(2).</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (b) Special Transfer in Fiscal Year 2002.--Section 903 of 
the Social Security Act is amended by adding at the end the 
following:</DELETED>

       <DELETED>``Special Transfer in Fiscal Year 2002</DELETED>

<DELETED>    ``(d)(1) The Secretary of the Treasury shall transfer (as 
of the date determined under paragraph (5)(A)) 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).</DELETED>
<DELETED>    ``(2) 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--</DELETED>
        <DELETED>    ``(A) 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 section 402(a)(1) of the 
        Economic Security and Recovery Act of 2001 had been enacted 
        before the close of fiscal year 2001, minus</DELETED>
        <DELETED>    ``(B) the amount which was in fact transferred 
        under this section to such account at the beginning of fiscal 
        year 2002.</DELETED>
<DELETED>    ``(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--</DELETED>
        <DELETED>    ``(i) to individuals with respect to their 
        unemployment, and</DELETED>
        <DELETED>    ``(ii) which are allowable under subparagraph (B) 
        or (C).</DELETED>
<DELETED>    ``(B)(i) At the option of the State, cash benefits under 
this paragraph may include amounts which shall be payable as regular or 
additional compensation for individuals eligible for regular 
compensation under the unemployment compensation law of such 
State.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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 benefits (described in subparagraph (B)(i)) which could have 
been paid with respect to that amount.</DELETED>
<DELETED>    ``(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--</DELETED>
        <DELETED>    ``(i) beginning after the date of enactment of 
        this subsection, and</DELETED>
        <DELETED>    ``(ii) ending on or before March 11, 
        2003.</DELETED>
<DELETED>    ``(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).</DELETED>
<DELETED>    ``(5) Transfers under this subsection--</DELETED>
        <DELETED>    ``(A) shall be made on such date as the Secretary 
        of Labor (in consultation with the Secretary of the Treasury) 
        shall determine, but in no event later than 10 days after the 
        date of enactment of this subsection, and</DELETED>
        <DELETED>    ``(B) may, notwithstanding any other provision of 
        this subsection, be made only to the extent that they do not to 
        exceed--</DELETED>
                <DELETED>    ``(i) the balance in the Federal 
                unemployment account as of the date determined under 
                subparagraph (A), or</DELETED>
                <DELETED>    ``(ii) the total amount that was 
                transferred under this section to the Federal 
                unemployment account at the beginning of fiscal year 
                2002,</DELETED>
        <DELETED>whichever is less.''</DELETED>
<DELETED>    (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:</DELETED>
        <DELETED>    (1) By substituting ``the transfer date described 
        in subsection (d)(5)(A)'' for ``October 1 of any fiscal 
        year''.</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (3) By substituting ``fiscal year 2002 (after the 
        transfer date described in subsection (d)(5)(A))'' for ``the 
        fiscal year beginning on such October 1''.</DELETED>
        <DELETED>    (4) By substituting ``under subsection (d)'' for 
        ``as of October 1 of such fiscal year''.</DELETED>
        <DELETED>    (5) By substituting ``(as of the close of fiscal 
        year 2002)'' for ``(as of the close of such fiscal 
        year)''.</DELETED>
<DELETED>    (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''.</DELETED>
<DELETED>    (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)''.</DELETED>
<DELETED>    (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.</DELETED>

 <DELETED>TITLE V--HEALTH CARE ASSISTANCE FOR THE UNEMPLOYED</DELETED>

<DELETED>SEC. 501. HEALTH CARE ASSISTANCE FOR THE UNEMPLOYED.</DELETED>

<DELETED>    Title XX of the Social Security Act (42 U.S.C. 1397-1397f) 
is amended by adding at the end the following:</DELETED>

<DELETED>``SEC. 2008. GRANTS FOR HEALTH CARE ASSISTANCE FOR THE 
              UNEMPLOYED.</DELETED>

<DELETED>    ``(a) Funding.--For purposes of section 2003, the amount 
specified in section 2003(c) for fiscal year 2002 is increased by 
$3,000,000,000.</DELETED>
<DELETED>    ``(b) Use of Funds.--Notwithstanding any other provision 
of this title, to the extent that an amount paid to a State under 
section 2002 is attributable to funds made available by reason of 
subsection (a) of this section--</DELETED>
        <DELETED>    ``(1) the State shall use the amount to assist an 
        unemployed individual who is not eligible for Federal health 
        coverage to purchase health care coverage for the individual or 
        any member of the family of the individual who is not so 
        eligible; and</DELETED>
        <DELETED>    ``(2) the amount--</DELETED>
                <DELETED>    ``(A) shall be used to supplement, not 
                supplant, any other Federal, State, or local funds that 
                are used for the provision of health care coverage; 
                and</DELETED>
                <DELETED>    ``(B) may not be included in determining 
                the amount of non-Federal contributions required under 
                any program.</DELETED>
<DELETED>    ``(c) Definitions.--In this section:</DELETED>
        <DELETED>    ``(1) Unemployed individual.--The term `unemployed 
        individual' means an individual who--</DELETED>
                <DELETED>    ``(A) is without a job (determined in 
                accordance with the criteria used by the Bureau of 
                Labor Statistics of the Department of Labor in defining 
                individuals as unemployed);</DELETED>
                <DELETED>    ``(B) is seeking and available for work; 
                and</DELETED>
                <DELETED>    ``(C) has or had a benefit year (within 
                the meaning of section 205 of the Federal-State 
                Extended Unemployment Compensation Act of 1970) 
                beginning on or after January 1, 2001.</DELETED>
        <DELETED>    ``(2) Federal health coverage.--</DELETED>
                <DELETED>    ``(A) In general.--Subject to subparagraph 
                (B), the term `Federal health coverage' means coverage 
                under any medical care program described in--</DELETED>
                        <DELETED>    ``(i) title XVIII, XIX, or XXI of 
                        this Act (other than under section 
                        1928);</DELETED>
                        <DELETED>    ``(ii) chapter 55 of title 10, 
                        United States Code;</DELETED>
                        <DELETED>    ``(iii) chapter 17 of title 38, 
                        United States Code;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(v) the Indian Health Care 
                        Improvement Act.</DELETED>
                <DELETED>    ``(B) Special rule.--Such term does not 
                include coverage under a qualified long-term care 
                insurance contract.''.</DELETED>

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Economic Recovery 
and Assistance for American Workers Act of 2001''.
    (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--SUPPLEMENTAL REBATE FOR INDIVIDUAL TAXPAYERS

Sec. 101. Supplemental rebate.

             TITLE II--TEMPORARY BUSINESS RELIEF PROVISIONS

Sec. 201. Special depreciation allowance for certain property.
Sec. 202. Increase in section 179 expensing.
Sec. 203. Carryback of certain net operating losses allowed for 5 
                            years.

    TITLE III--TAX INCENTIVES AND RELIEF FOR VICTIMS OF TERRORISM, 
                  DISASTERS, AND DISTRESSED CONDITIONS

   Subtitle A--Tax Incentives for New York City and Distressed Areas

Sec. 301. Expansion of work opportunity tax credit targeted categories 
                            to include certain employees in New York 
                            City.
Sec. 302. Tax-exempt private activity bonds for rebuilding portion of 
                            New York City damaged in the September 11, 
                            2001, terrorist attack.
Sec. 303. Gain or loss from property damaged or destroyed in New York 
                            Recovery Zone.
Sec. 304. Reenactment of exceptions for qualified-mortgage-bond-
                            financed loans to victims of Presidentially 
                            declared disasters.
Sec. 305. One-year expansion of authority for Indian tribes to issue 
                            tax-exempt private activity bonds.

              Subtitle B--Victims of Terrorism Tax Relief

Sec. 310. Short title.

Part I--Relief Provisions for Victims of April 19, 1995, and September 
                      11, 2001, Terrorist Attacks

Sec. 311. Income and employment taxes of victims of terrorist attacks.
Sec. 312. Estate tax reduction.
Sec. 313. Payments by charitable organizations treated as exempt 
                            payments.
Sec. 314. Exclusion of certain cancellations of indebtedness.

  Part II--General Relief for Victims of Disasters and Terroristic or 
                            Military Actions

Sec. 321. Exclusion for disaster relief payments.
Sec. 322. Authority to postpone certain deadlines and required actions.
Sec. 323. Internal Revenue Service disaster response team.
Sec. 324. Application of certain provisions to terroristic or military 
                            actions.
Sec. 325. Clarification of due date for airline excise tax deposits.
Sec. 326. Coordination with Air Transportation Safety and System 
                            Stabilization Act.

   Part III--Disclosure of Tax Information in Terrorism and National 
                        Security Investigations

Sec. 331. Disclosure of tax information in terrorism and national 
                            security investigations.

        TITLE IV--EXTENSIONS OF CERTAIN EXPIRING TAX PROVISIONS

Sec. 401. Allowance of nonrefundable personal credits against regular 
                            and minimum tax liability.
Sec. 402. Work opportunity credit.
Sec. 403. Welfare-to-work credit.
Sec. 404. Credit for electricity produced from renewable resources.
Sec. 405. Taxable income limit on percentage depletion for oil and 
                            natural gas produced from marginal 
                            properties.
Sec. 406. Qualified zone academy bonds.
Sec. 407. Subpart F exemption for active financing.
Sec. 408. Cover over of tax on distilled spirits.
Sec. 409. Delay in effective date of requirement for approved diesel or 
                            kerosene terminals.
Sec. 410. Deduction for clean-fuel vehicles and certain refueling 
                            property.
Sec. 411. Credit for qualified electric vehicles.
Sec. 412. Parity in the application of certain limits to mental health 
                            benefits.
Sec. 413. Combined employment tax reporting.

    TITLE V--EXTENSION OF CERTAIN TRADE PROVISIONS EXPIRING IN 2001.

Sec. 501. Generalized System of Preferences.
Sec. 502. Andean Trade Preference Act.
Sec. 503. Reauthorization of trade adjustment assistance.

  TITLE VI--HEALTH INSURANCE COVERAGE OPTIONS FOR RECENTLY UNEMPLOYED 
                     INDIVIDUALS AND THEIR FAMILIES

Sec. 601. Premium assistance for COBRA continuation coverage for 
                            individuals and their families.
Sec. 602. State option to provide temporary medicaid coverage for 
                            certain uninsured individuals.
Sec. 603. State option to provide temporary coverage under medicaid for 
                            the unsubsidized portion of COBRA 
                            continuation premiums.
Sec. 604. Temporary increases of medicaid FMAP for fiscal year 2002.
Sec. 605. Definitions.

          TITLE VII--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

Sec. 701. Short title.
Sec. 702. Federal-State agreements.
Sec. 703. Temporary supplemental unemployment compensation account.
Sec. 704. Payments to States having agreements under this title.
Sec. 705. Financing provisions.
Sec. 706. Fraud and overpayments.
Sec. 707. Definitions.
Sec. 708. Applicability.

              TITLE VIII--EMERGENCY AGRICULTURE ASSISTANCE

                    Subtitle A--Crop Loss Assistance

Sec. 801. Crop loss assistance.
Sec. 802. Livestock assistance program.
Sec. 803. Commodity purchases.

                     Subtitle B--Rural Development

Sec. 811. Rural community facilities and utilities.
Sec. 812. Rural telecommunications loans.
Sec. 813. Telemedicine and distance learning services.
Sec. 814. Environmental quality incentives program.
Sec. 815. Farmland protection program.

                       Subtitle C--Administration

Sec. 821. Commodity Credit Corporation.
Sec. 822. Administrative expenses.
Sec. 823. Regulations.

                    TITLE IX--ADDITIONAL PROVISIONS

Sec. 901. Credit to holders of qualified Amtrak bonds.
Sec. 902. Broadband Internet access tax credit.
Sec. 903. Citrus tree canker relief.
Sec. 904. Allowance of electronic 1099s.
Sec. 905. Clarification of excise tax exemptions for agricultural 
                            aerial applicators.
Sec. 906. Recovery period for certain wireless telecommunications 
                            equipment.
Sec. 907. No impact on social security trust funds.
Sec. 908. Emergency designation.

         TITLE I--SUPPLEMENTAL REBATE FOR INDIVIDUAL TAXPAYERS

SEC. 101. SUPPLEMENTAL REBATE.

    (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 Rebate.--
            ``(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--
                    ``(A) filed a return of tax imposed by subtitle A 
                for such taxable year, or
                    ``(B) filed a return of income tax with the 
                government of American Samoa, Guam, the Commonwealth of 
                the Northern Mariana Islands, the Commonwealth of 
                Puerto Rico, or the Virgin Islands of the United 
                States,
        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 amount of any advance refund amount paid 
                to the taxpayer 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.
            ``(5) Special rule for certain nonresidents.--The 
        determination under subsection (c)(2) as to whether an 
        individual who filed a return of tax described in paragraph 
        (1)(B) is a nonresident alien individual shall, under rules 
        prescribed by the Secretary, be made by reference to the 
        possession or Commonwealth with which the return was filed and 
        not the United States.''.
    (b) Technical Correction.--
            (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).''.
    (c) Conforming Amendments.--
            (1) Paragraph (1) of section 6428(d), as amended by 
        subsection (b), is amended by striking ``subsection (e)'' and 
        inserting ``subsections (e) and (f)''.
            (2) Paragraph (2) of section 6428(d), as amended by 
        subsection (b), is amended by striking ``subsection (e)'' and 
        inserting ``subsection (e) or (f)''.
            (3) Paragraph (3) of section 6428(e) is amended by striking 
        ``December 31, 2001'' and inserting ``the date of the enactment 
        of the Economic Recovery and Assistance for American Workers 
        Act of 2001''.
    (d) Reporting Requirement.--For purposes of determining the 
individuals who are eligible for the supplemental rebate under section 
6428(f) of the Internal Revenue Code of 1986, the governments of 
American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, 
the Commonwealth of Puerto Rico, and the Virgin Islands of the United 
States shall provide, at such time and in such manner as provided by 
the Secretary of the Treasury, the names, addresses, and taxpayer 
identifying numbers (within the meaning of section 6109 of the Internal 
Revenue Code of 1986) of residents who filed returns of income tax with 
such governments for 2000.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Technicals.--The amendments made by subsection (b) 
        shall take effect as if included in the amendment made by 
        section 101(b)(1) of the Economic Growth and Tax Relief 
        Reconciliation Act of 2001.

             TITLE II--TEMPORARY BUSINESS RELIEF PROVISIONS

SEC. 201. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY.

    (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, 2002.--
            ``(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 10 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 an applicable 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,
                            ``(III) which is qualified leasehold 
                        improvement property, or
                            ``(IV) which is eligible for depreciation 
                        under section 167(g),
                            ``(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, 2002, 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, 
                                2002, and
                            ``(iv) which is placed in service by the 
                        taxpayer before January 1, 2003.
                    ``(B) 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.
                    ``(C) 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, 2002.
                            ``(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).
                    ``(D) 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 $1,600.
                            ``(ii) Listed property.--The deduction 
                        allowable under paragraph (1) shall be taken 
                        into account in computing any recapture amount 
                        under section 280F(b)(2).
            ``(3) Qualified leasehold improvement property.--For 
        purposes of this subsection--
                    ``(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) Binding commitment to lease treated 
                        as lease.--A binding 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.--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.''.
    (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, 2002.--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. INCREASE IN SECTION 179 EXPENSING.

    (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...............................          $35,000 
                  2003 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)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 203. 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 in 2001, 
                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 subsection (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.--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 in 2001, or
                                    ``(II) alternative minimum taxable 
                                income determined without regard to 
                                such deduction reduced by the amount 
                                determined under clause (i), and''.
    (d) Effective Date.--The amendments made by this section shall 
apply to net operating losses for taxable years ending in 2001.

    TITLE III--TAX INCENTIVES AND RELIEF FOR VICTIMS OF TERRORISM, 
                  DISASTERS, AND DISTRESSED CONDITIONS

   Subtitle A--Tax Incentives for New York City and Distressed Areas

SEC. 301. EXPANSION OF WORK OPPORTUNITY TAX CREDIT TARGETED CATEGORIES 
              TO INCLUDE CERTAIN EMPLOYEES IN NEW YORK CITY.

    (a) In General.--For purposes of section 51 of the Internal Revenue 
Code of 1986 (relating to work opportunity credit), a New York Recovery 
Zone business employee shall be treated as a member of a targeted 
group.
    (b) New York Recovery Zone Business Employee.--For purposes of this 
section--
            (1) In general.--The term ``New York Recovery Zone business 
        employee'' means, with respect to the period beginning after 
        September 10, 2001, and ending before January 1, 2003, any 
        employee of a New York Recovery Zone business if--
                    (A) substantially all the services performed during 
                such period by such employee for such business are 
                performed in a trade or business of such business 
                located in an area described in paragraph (2), and
                    (B) with respect to any employee of such business 
                described in paragraph (2)(B), such employee is 
                certified by the New York State Department of Labor as 
                not exceeding, when added to all other employees 
                previously certified with respect to such period as New 
                York Recovery Zone business employees with respect to 
                such business, the number of employees of such business 
                on September 11, 2001, in the New York Recovery Zone.
            (2) New york recovery zone business.--The term ``New York 
        Recovery Zone business'' means any business establishment which 
        is--
                    (A) located in the New York Recovery Zone, or
                    (B) located in the City of New York, New York, 
                outside the New York Recovery Zone, as the result of 
                the destruction or damage of such establishment by the 
                September 11, 2001, terrorist attack.
            (3) New york recovery zone.--The term ``New York Recovery 
        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.
            (4) Special rules for determining amount of credit.--For 
        purposes of applying subpart E of part IV of subchapter B of 
        chapter 1 of the Internal Revenue Code of 1986 to wages paid or 
        incurred to any New York Recovery Zone business employee--
                    (A) section 51(a) of such Code shall be applied by 
                substituting ``qualified wages'' for ``qualified first-
                year wages'',
                    (B) section 51(d)(12)(A)(i) of such Code shall be 
                applied to the certification of individuals employed by 
                a New York Recovery Zone business before April 1, 2002, 
                by substituting ``on or before May 1, 2002'' for ``on 
                or before the day on which such individual begins work 
                for the employer'',
                    (C) subsections (c)(4) and (i)(2) of section 51 of 
                such Code shall not apply, and
                    (D) in determining qualified wages, the following 
                shall apply in lieu of section 51(b) of such Code:
                            (i) Qualified wages.--The term ``qualified 
                        wages'' means the wages paid or incurred by the 
                        employer for work performed during the period 
                        beginning on September 11, 2001, and ending on 
                        December 31, 2002, to individuals who are New 
                        York Recovery Zone business employees of such 
                        employer.
                            (ii) Only first $12,000 of wages per 
                        taxable year taken into account.--The amount of 
                        the qualified wages which may be taken into 
                        account with respect to any individual shall 
                        not exceed $12,000 per taxable year of the 
                        employer.
    (c) 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 recovery zone business 
        employee credit.--
                    ``(A) In general.--In the case of the New York 
                Recovery 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 
                                Recovery Zone business employee 
                                credit).
                    ``(B) New york recovery zone business employee 
                credit.--For purposes of this subsection, the term `New 
                York Recovery Zone business employee credit' means the 
                portion of work opportunity credit under section 51 
                determined under section 301 of the Economic Recovery 
                and Assistance for American Workers Act of 2001.''.
            (2) Conforming amendment.--Subclause (II) of section 
        38(c)(2)(A)(ii) is amended by inserting ``or the New York 
        Recovery Zone business employee credit'' after ``employment 
        credit''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years ending after September 11, 2001.
    (d) Coordination With Emergency Appropriations.--Notwithstanding 
any other provision of law, any amount otherwise available for disaster 
recovery activities and assistance related to the September 11, 2001, 
terrorist attack in the City of New York, New York, under the 2001 
Emergency Supplemental Appropriations Act for Recovery from and 
Response to Terrorist Attacks on the United States (Public Law 107-38) 
shall be reduced by the aggregate 10-year cost to the United States 
Treasury resulting from the credits allowed under this section, as 
estimated for purposes of determining whether this Act complies with 
the Congressional Budget Act of 1974.

SEC. 302. TAX-EXEMPT PRIVATE ACTIVITY BONDS FOR REBUILDING PORTION OF 
              NEW YORK CITY DAMAGED IN THE SEPTEMBER 11, 2001, 
              TERRORIST ATTACK.

    (a) Treatment as Qualified Bonds.--For purposes of the Internal 
Revenue Code of 1986, any qualified NYC recovery bond shall be treated 
as an exempt facility bond under section 141(e) of such Code.
    (b) Qualified NYC Recovery Bond.--For purposes of this section, the 
term ``qualified NYC recovery bond'' means any bond which--
            (1) is issued by the State of New York or any political 
        subdivision thereof (or any agency, instrumentality or 
        constituted authority on behalf thereof), and
            (2) meets the requirements of subsections (c) through (f).
    (c) Designation Requirements.--A bond meets the requirements of 
this subsection if it is issued as part of an issue designated as a 
qualified NYC recovery bond by the Mayor of the City of New York, New 
York, or an individual specifically appointed to make such designation.
    (d) Issuance and Volume Requirements.--
            (1) In general.--Except as provided in paragraph (3), a 
        bond issued as part of an issue meets the requirements of this 
        subsection if such bond is issued during 2002 (or during the 
        period elected under paragraph (2)) and the aggregate face 
        amount of the bonds issued pursuant to such issue, when added 
        to the aggregate face amount of qualified NYC recovery bonds 
        previously issued, does not exceed $15,000,000,000.
            (2) Elective carryforward of unused limitation.--If the 
        volume cap under paragraph (1) exceeds the aggregate amount of 
        qualified NYC recovery bonds issued during 2002, the issuing 
        authority under subsection (b) may elect to carry forward such 
        excess volume cap for an additional 3-year period under rules 
        similar to the rules of section 146(f) of the Internal Revenue 
        Code of 1986 (other than paragraph (2) thereof).
            (3) Certain Current Refundings Not Counted.--For purposes 
        of paragraph (1), there shall not be taken into account any 
        current refunding bond the proceeds of which are used to refund 
        any bond described in paragraph (1) to the extent the face 
        amount of such current refunding bond does not exceed the 
        outstanding face amount of the refunded bond.
    (e) Qualified Project Requirements.--
            (1) In general.--A bond meets the requirements of this 
        subsection if it is issued as part of an issue at least 95 
        percent of the net proceeds of which are to be used for 
        qualified project costs.
            (2) Qualified project costs.--For purposes of this 
        subsection--
                    (A) In general.--The term ``qualified project 
                costs'' means--
                            (i) with respect to a qualified project 
                        described in paragraph (3)(A)(i), the costs of 
                        acquisition, construction, reconstruction, and 
                        renovation of commercial real property and 
                        residential rental real property, including--
                                    (I) buildings and their structural 
                                components,
                                    (II) fixed tenant improvements, and
                                    (III) public utility property, and
                            (ii) with respect to a qualified project 
                        described in paragraph (3)(A)(ii), the costs of 
                        acquisition, construction, reconstruction, and 
                        renovation of commercial real property, 
                        including--
                                    (I) buildings and their structural 
                                components, and
                                    (II) fixed tenant improvements.
                    (B) Limitations.--
                            (i) Residential rental real property.--Such 
                        term shall not include costs with respect to 
                        residential rental real property to the extent 
                        such costs for all such property exceed 20 
                        percent of the aggregate face amount of the 
                        bonds issued under this section.
                            (ii) Retail sales property.--Such term 
                        shall not include costs with respect to 
                        property used for retail sales of tangible 
                        property and functionally related and 
                        subordinate property to the extent such costs 
                        for all such property exceeds 10 percent of the 
                        aggregate face amount of the bonds issued under 
                        this section.
                            (iii) Movable fixtures and equipment.--Such 
                        term shall not include costs with respect to 
                        movable fixtures and equipment.
            (3) Qualified projects.--For purposes of this subsection--
                    (A) In general.--The term ``qualified project'' 
                means any project--
                            (i) located within the New York Recovery 
                        Zone, or
                            (ii) located within the City of New York, 
                        New York, but outside of the New York Recovery 
                        Zone, but only if--
                                    (I) such project consists of at 
                                least 100,000 square feet of usable 
                                office or other commercial space 
                                located in a single building or 
                                multiple adjacent buildings, and
                                    (II) the aggregate face amount of 
                                the bonds issued to finance such 
                                project, when added to the aggregate 
                                face amount of all bonds issued to 
                                finance all other projects described in 
                                this clause, does not exceed 
                                $7,000,000,000.
                    (B) New york recovery zone.--The term ``New York 
                Recovery 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.
    (f) General Requirements.--A bond meets the requirements of this 
subsection if it is issued as part of an issue which meets the 
requirements of part IV of subchapter B of chapter 1 of the Internal 
Revenue Code of 1986 applicable to an exempt facility bond, except as 
follows:
            (1) Sections 142(d) and 150(b)(2) (relating to qualified 
        residential rental project), and section 146 (relating to 
        volume cap) of such Code shall not apply to bonds issued under 
        this section.
            (2) The application of section 147(c) of such Code 
        (relating to limitation on use for land acquisition) shall be 
        determined by reference to the aggregate authorized face amount 
        of all bonds issued under this section rather than the net 
        proceeds of each issue.
            (3) Section 147(d) of such Code (relating to acquisition of 
        existing property not permitted) shall be applied by 
        substituting ``50 percent'' for ``15 percent'' each place it 
        appears.
            (4) Section 148(f)(4)(C) of such Code (relating to 
        exception from rebate for certain proceeds to be used to 
        finance construction expenditures) shall apply to construction 
        proceeds of bonds issued under this section.
            (5) Rules similar to the rules of section 143(a)(2)(A)(iv) 
        of such Code (relating to use of loan repayments) shall apply 
        to bonds issued under this section.
    (g) Bond Interest not an AMT Preference Item.--For purposes of 
section 57(a)(5) of the Internal Revenue Code of 1986, a qualified NYC 
recovery bond shall not be treated as a specified private activity 
bond.
    (h) Separate Issue Treatment of Portions of an Issue.--This section 
shall not apply to the portion of the proceeds 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 subsection (a)), if the issuer elects to so treat such portion.
    (i) Net Proceeds.--For purposes of this section, the term ``net 
proceeds'' has the meaning given such term by section 150(a)(3) of the 
Internal Revenue Code of 1986.
    (j) Interest on Debt Used To Purchase or Carry Qualified NYC 
Recovery Bonds.--
            (1) In general.--Section 265(b)(3) (relating to exception 
        for certain tax-exempt obligations) is amended--
                    (A) by inserting ``a tax-exempt obligation issued 
                pursuant to section 302 of the Economic Recovery and 
                Assistance for American Workers Act of 2001 or'' after 
                ``means'' in subparagraph (B)(i),
                    (B) by inserting ``other than an obligation issued 
                pursuant to section 302 of the Economic Recovery and 
                Assistance for American Workers Act of 2001'' after 
                ``of a qualified tax-exempt obligation'' in 
                subparagraph (D)(ii), and
                    (C) by adding at the end of subparagraph (D) the 
                following new clause:
                            ``(iv) Refundings of certain obligations.--
                        In the case of a refunding (or a series of 
                        refundings) of a qualified tax-exempt 
                        obligation that is an obligation issued 
                        pursuant to section 302 of the Economic 
                        Recovery and Assistance for American Workers 
                        Act of 2001, the refunding obligation shall be 
                        treated as a qualified tax-exempt obligation if 
                        the refunding obligation meets the requirements 
                        of such section.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years ending on or after the date of the 
        enactment of this Act.
    (k) Coordination With Emergency Appropriations.--Notwithstanding 
any other provision of law, any amount otherwise available for disaster 
recovery activities and assistance related to the September 11, 2001, 
terrorist attack in the City of New York, New York, under the 2001 
Emergency Supplemental Appropriations Act for Recovery from and 
Response to Terrorist Attacks on the United States (Public Law 107-38) 
shall be reduced by the aggregate 10-year cost to the United States 
Treasury of the qualified NYC recovery bonds issued under this section, 
as estimated for purposes of determining whether this Act complies with 
the Congressional Budget Act of 1974.

SEC. 303. GAIN OR LOSS FROM PROPERTY DAMAGED OR DESTROYED IN NEW YORK 
              RECOVERY ZONE.

    (a) General Rule.--For purposes of the Internal Revenue Code of 
1986, if a taxpayer elects the application of this section with respect 
to any eligible property, then any gain or loss on the disposition of 
the property shall be determined without regard to any compensation (by 
insurance or otherwise) received by the taxpayer for damages sustained 
to the property as a result of the terrorist attacks occurring on 
September 11, 2001. Such election shall be made at such time and in 
such manner as the Secretary of the Treasury may prescribe, and, once 
made, is irrevocable.
    (b) Limitation Based on Purchase of Replacement Property.--
            (1) In general.--Subsection (a) shall apply to compensation 
        received with respect to eligible property only to the extent 
        of the cost of any qualified replacement property purchased by 
        the taxpayer.
            (2) Allocation.--If the aggregate compensation received by 
        a taxpayer with respect to all eligible property exceeds the 
        aggregate cost of all qualified replacement property purchased 
        by the taxpayer, such cost shall be allocated to such eligible 
        property in accordance with rules prescribed by the Secretary.
            (3) Special rule for consolidated groups.--For purposes of 
        paragraph (1), an affiliated group filing a consolidated return 
        may elect to treat any qualified replacement property purchased 
        by a member of the group as purchased by another member of the 
        group.
    (c) Eligible Property.--For purposes of this section, the term 
``eligible property'' means any tangible property--
            (1) which is section 1245 property (as defined in section 
        1245(a)(3) of the Internal Revenue Code of 1986) or qualified 
        leasehold improvement property (as defined in section 168(k)(3) 
        of such Code),
            (2) substantially all of the use of which as of September 
        11, 2001, was in a business establishment of the taxpayer 
        located in the New York Recovery Zone, and
            (3) which was damaged or destroyed in the terrorist attacks 
        of September 11, 2001.
    (d) Qualified Replacement Property.--For purposes of this section--
            (1) In general.--The term ``qualified replacement 
        property'' means tangible property--
                    (A) which is described in subsection (c)(1),
                    (B) which is purchased by the taxpayer on or after 
                September 11, 2001, and placed in service in the City 
                of New York, New York, before January 1, 2007,
                    (C) the original use of which in such city begins 
                with the taxpayer, and
                    (D) substantially all of the use of which is 
                reasonably expected to be in connection with a business 
                establishment of the taxpayer located in such city.
            (2) Recapture.--The Secretary shall, by regulations, 
        provide for the recapture of any Federal tax benefit provided 
        by this section in cases where a taxpayer ceases to use 
        property as qualified replacement property and such recapture 
        is necessary to prevent the avoidance of the purposes of this 
        section.
    (e) Coordination With Other Provisions of Code.--For purposes of 
the Internal Revenue Code of 1986--
            (1) Special rule for treatment of unrecognized gain in 
        eligible property.--Sections 1245 and 1250 of such Code shall 
        not apply to any gain on the disposition of eligible property 
        not recognized by reason of this section.
            (2) Loss election not to apply to eligible property.--If a 
        taxpayer elects the application of this section with respect to 
        any eligible property, the taxpayer may not make an election 
        under section 165(i) of such Code with respect to any loss 
        attributable to the property.
            (3) Basis adjustments of qualified replacement property.--
                    (A) In general.--The basis of any qualified 
                replacement property shall be reduced by the amount of 
                any compensation disregarded by reason of subsection 
                (a).
                    (B) Special rules for recapture.--For purposes of 
                sections 1245 and 1250 of such Code, any reduction 
                under subparagraph (A) shall be treated as a deduction 
                allowed for depreciation, except that for purposes of 
                section 1250(b) of such Code, the determination of what 
                would have been the depreciation adjustments under the 
                straight line method shall be made as if there had been 
                no reduction under subparagraph (A).
            (4) Special rules for applying section 1033.--For purposes 
        of applying section 1033 of such Code to converted property 
        which is eligible property with respect to which an election 
        under subsection (a) has been made--
                    (A) the amount realized from the eligible property 
                shall not include any compensation received by the 
                taxpayer which is disregarded by reason of subsection 
                (a), and
                    (B) any qualified replacement property shall be 
                disregarded in determining whether property was 
                acquired for the purposes of replacing the converted 
                property.
    (f) Other Definitions and Rules.--For purposes of this section--
            (1) New york recovery zone.--The term ``New York Recovery 
        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.
            (2) Time for assessment.--Rules similar to the rules of 
        subparagraphs (C) and (D) of section 1033(a)(2) of such Code 
        shall apply for purposes of this section.
            (3) Related party limitation.--Section 1033(i) of such Code 
        shall apply for purposes of this section.
    (g) Coordination With Emergency Appropriations.--Notwithstanding 
any other provision of law, any amount otherwise available for disaster 
recovery activities and assistance related to the September 11, 2001, 
terrorist attack in the City of New York, New York, under the 2001 
Emergency Supplemental Appropriations Act for Recovery from and 
Response to Terrorist Attacks on the United States (Public Law 107-38) 
shall be reduced by the aggregate 10-year cost to the United States 
Treasury resulting from the enactment of this section, as estimated for 
purposes of determining whether this Act complies with the 
Congressional Budget Act of 1974.

SEC. 304. REENACTMENT OF EXCEPTIONS FOR QUALIFIED-MORTGAGE-BOND-
              FINANCED LOANS TO VICTIMS OF PRESIDENTIALLY DECLARED 
              DISASTERS.

    Section 143(k)(11) (relating to special rules for residences 
located in disaster areas) is amended--
            (1) by inserting ``damaged or destroyed by a disaster and'' 
        after ``In the case of a residence'',
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) Paragraph (4) of this subsection shall be 
                applied by substituting `$25,000' for `$15,000'.'', and
            (3) by inserting ``, and after December 31, 2001, and 
        before January 1, 2003'' after ``1999'' in the last sentence.

SEC. 305. ONE-YEAR EXPANSION OF AUTHORITY FOR INDIAN TRIBES TO ISSUE 
              TAX-EXEMPT PRIVATE ACTIVITY BONDS.

    (a) In General.--Section 7871(c) (relating to additional 
requirements for tax-exempt bonds) is amended by adding at the end the 
following new paragraph:
            ``(4) Exception for qualified indian private activity 
        bonds.--
                    ``(A) In general.--In the case of any qualified 
                Indian private activity bond--
                            ``(i) paragraph (2) shall not apply,
                            ``(ii) such bond shall be treated as a 
                        qualified bond under section 141(e), and
                            ``(iii) section 146 shall not apply.
                    ``(B) Qualified indian private activity bond.--For 
                purposes of this paragraph, the term `qualified Indian 
                private activity bond' means any bond which--
                            ``(i) is issued by a qualified Indian 
                        tribal government--
                                    ``(I) as part of an issue 95 
                                percent or more of the net proceeds of 
                                which are to be used to provide 
                                qualified residential rental projects 
                                (as determined under section 142(d), by 
                                substituting `statewide median gross 
                                income' for `area median gross 
                                income'),
                                    ``(II) as part of a qualified 
                                mortgage issue (as defined in section 
                                143(a)(2)),
                                    ``(III) as part of an issue 95 
                                percent or more of the net proceeds of 
                                which are to be used to provide any 
                                facility described in section 
                                1394(b)(1) for any business (whether 
                                tribally owned or not) that would 
                                qualify as an enterprise zone business 
                                if the Indian reservation (as defined 
                                in section 168(j)(6)) over which the 
                                qualified Indian tribal government 
                                exercises general governmental 
                                authority were treated as an 
                                empowerment zone, or
                                    ``(IV) as part of an issue to be 
                                used for more than 1 of the purposes 
                                described in the preceding subclauses, 
                                and
                            ``(ii) meets the requirements of 
                        subparagraphs (D) and (E).
                    ``(C) Qualified indian tribal government.--For 
                purposes of this paragraph, the term `qualified Indian 
                tribal government' means an Indian tribal government 
                which exercises general governmental authority over an 
                Indian reservation (as so defined) with an unemployment 
                rate among members of the tribe of at least 25 percent. 
                For purposes of the preceding sentence, determinations 
                of unemployment shall be made with respect to any 
                issuance of a bond under this section on the basis of 
                the most recent report published by the Bureau of 
                Indian Affairs under section 17(a) of the Indian 
                Employment, Training and Related Services Demonstration 
                Act of 1992 (25 U.S.C. 3416(a)) before such issuance.
                    ``(D) Designation requirements.--A bond meets the 
                requirements of this subparagraph if it is issued as 
                part of an issue designated as a qualified Indian 
                private activity bond for a purpose described in 
                subclause (I), (II), or (III) of subparagraph (B)(i) by 
                the qualified Indian tribal government.
                    ``(E) Volume requirements.--
                            ``(i) In general.--A bond issued as part of 
                        an issue meets the requirements of this 
                        subparagraph if such bond is issued during 2002 
                        (or during the period elected under clause 
                        (ii)) and the aggregate face amount of the 
                        bonds issued pursuant to such issue, when added 
                        to the aggregate face amount of qualified 
                        Indian private activity bonds previously issued 
                        by such qualified Indian tribal government, 
                        does not exceed $10,000,000.
                            ``(ii) Elective carryforward of unused 
                        limitation.--If the volume cap under clause (i) 
                        exceeds the aggregate amount of qualified 
                        Indian private activity bonds issued during 
                        2002, the qualified Indian tribal government 
                        may elect to carry forward such excess volume 
                        cap for an additional 3-year period under rules 
                        similar to the rules of section 146(f) (other 
                        than paragraph (2) thereof).
                    ``(F) Application of section 42 to residential 
                rental projects financed by bonds under this 
                paragraph.--In the case of bonds described in 
                subparagraph (B)(i)(I), issuance under the requirements 
                of subparagraph (E) shall be treated as issuance under 
                the requirements of section 146 for purposes of 
                determining the application of section 42 to projects 
                financed by the net proceeds of such bonds.
                    ``(G) Special rule for determining enterprise zone 
                business.--For purposes of subparagraph (B)(i)(III), an 
                enterprise zone business shall not include any facility 
                a principal business of which is the sale of tobacco 
                products or highway motor fuels, unless the qualified 
                Indian tribal government has entered into an agreement 
                with the State in which such facility is located to 
                collect applicable State taxes on such products or 
                fuels.
                    ``(H) Bond interest not an amt preference item.--
                For purposes of section 57(a)(5), a bond designated 
                under subparagraph (D) as a qualified Indian private 
                activity bond shall not be treated as a specified 
                private activity bond.
                    ``(I) Report.--The Secretary shall compile 
                necessary data from reports required under section 
                149(e) relating to the issuance of bonds under this 
                paragraph and shall report to the Committee on Ways and 
                Means of the House of Representatives and the Committee 
                on Finance of the Senate not later than September 30 of 
                any year following the calendar year in which Indian 
                tribal governments issued bonds under this paragraph 
                and the activities for which such bonds were issued.''.
    (b) Conforming Amendments.--
            (1) Section 7871(c)(2) is amended by striking ``paragraph 
        (3)'' and inserting ``paragraphs (3) and (4)''.
            (2) Section 7871 is amended--
                    (A) by striking clause (iii) of subsection 
                (c)(3)(E), and
                    (B) by adding at the end the following new 
                subsection:
    ``(f) Net Proceeds.--For purposes of this section, the term `net 
proceeds' has the meaning given such term by section 150(a)(3).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 2001.

              Subtitle B--Victims of Terrorism Tax Relief

SEC. 310. SHORT TITLE.

    This subtitle may be cited as the ``Victims of Terrorism Tax Relief 
Act of 2001''.

PART I--RELIEF PROVISIONS FOR VICTIMS OF APRIL 19, 1995, AND SEPTEMBER 
                      11, 2001, TERRORIST ATTACKS

SEC. 311. INCOME AND EMPLOYMENT TAXES OF VICTIMS OF TERRORIST ATTACKS.

    (a) In General.--Section 692 (relating to income taxes of members 
of Armed Forces on death) is amended by adding at the end the following 
new subsection:
    ``(d) Certain Individuals Dying as a Result of April 19, 1995, and 
September 11, 2001, Terrorist Attacks.--
            ``(1) In general.--In the case of any individual who dies 
        as a result of wounds or injury incurred as a result of the 
        terrorist attacks against the United States on April 19, 1995, 
        or September 11, 2001, any tax imposed by this subtitle shall 
        not apply--
                    ``(A) with respect to the taxable year in which 
                falls the date of such individual's death, and
                    ``(B) with respect to any prior taxable year in the 
                period beginning with the last taxable year ending 
                before the taxable year in which the wounds or injury 
                were incurred.
            ``(2) Exceptions.--
                    ``(A) Taxation of certain benefits.--Subject to 
                such rules as the Secretary may prescribe, paragraph 
                (1) shall not apply to the amount of any tax imposed by 
                this subtitle which would be computed by only taking 
                into account the items of income, gain, or other 
                amounts attributable to--
                            ``(i) amounts payable in the taxable year 
                        by reason of the death of an individual 
                        described in paragraph (1) which would have 
                        been payable in such taxable year if the death 
                        had occurred by reason of an event other than 
                        the terrorist attacks against the United States 
                        on April 19, 1995, or September 11, 2001, or
                            ``(ii) amounts payable in the taxable year 
                        which would not have been payable in such 
                        taxable year but for an action taken after 
                        April 19, 1995, or after September 11, 2001 (as 
                        the case may be).
                    ``(B) No relief for perpetrators.--Paragraph (1) 
                shall not apply with respect to any individual 
                identified by the Attorney General to have been a 
                participant or conspirator in any such terrorist 
                attack, or a representative of such individual.''.
    (b) Refund of Other Taxes Paid.--Section 692, as amended by 
subsection (a), is amended by adding at the end the following new 
subsection:
    ``(e) Refund of Other Taxes Paid.--In determining the amount of tax 
under this section to be credited or refunded as an overpayment with 
respect to any individual for any period, such amount shall be 
increased by an amount equal to the amount of taxes imposed and 
collected under chapter 21 and sections 3201(a), 3211(a)(1), and 
3221(a) with respect to such individual for such period.''.
    (c) Conforming Amendments.--
            (1) Section 5(b)(1) is amended by inserting ``and victims 
        of certain terrorist attacks'' before ``on death''.
            (2) Section 6013(f)(2)(B) is amended by inserting ``and 
        victims of certain terrorist attacks'' before ``on death''.
    (d) Clerical Amendments.--
            (1) The heading of section 692 is amended to read as 
        follows:

``SEC. 692. INCOME AND EMPLOYMENT TAXES OF MEMBERS OF ARMED FORCES AND 
              VICTIMS OF CERTAIN TERRORIST ATTACKS ON DEATH.''.

            (2) The item relating to section 692 in the table of 
        sections for part II of subchapter J of chapter 1 is amended to 
        read as follows:

                              ``Sec. 692. Income and employment taxes 
                                        of members of Armed Forces and 
                                        victims of certain terrorist 
                                        attacks on death.''.
    (d) Effective Date; Waiver of Limitations.--
            (1) Effective date.--The amendments made by this section 
        shall apply to taxable years ending before, on, or after 
        September 11, 2001.
            (2) Waiver of limitations.--If refund or credit of any 
        overpayment of tax resulting from the amendments made by this 
        section is prevented at any time before the close of the 1-year 
        period beginning on the date of the enactment of this Act by 
        the operation of any law or rule of law (including res 
        judicata), such refund or credit may nevertheless be made or 
        allowed if claim therefor is filed before the close of such 
        period.

SEC. 312. ESTATE TAX REDUCTION.

    (a) In General.--Section 2201 is amended to read as follows:

``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE ARMED FORCES 
              AND DEATHS OF VICTIMS OF CERTAIN TERRORIST ATTACKS.

    ``(a) In General.--Unless the executor elects not to have this 
section apply, in applying section 2001 to the estate of a qualified 
decedent, the rate schedule set forth in subsection (c) shall be deemed 
to be the rate schedule set forth in section 2001(c).
    ``(b) Qualified Decedent.--For purposes of this section, the term 
`qualified decedent' means--
            ``(1) any citizen or resident of the United States dying 
        while in active service of the Armed Forces of the United 
        States, if such decedent--
                    ``(A) was killed in action while serving in a 
                combat zone, as determined under section 112(c), or
                    ``(B) died as a result of wounds, disease, or 
                injury suffered while serving in a combat zone (as 
                determined under section 112(c)), and while in the line 
                of duty, by reason of a hazard to which such decedent 
                was subjected as an incident of such service, or
            ``(2) any individual who died as a result of wounds or 
        injury incurred as a result of the terrorist attacks against 
        the United States on April 19, 1995, or September 11, 2001.
Paragraph (2) shall not apply with respect to any individual identified 
by the Attorney General to have been a participant or conspirator in 
any such terrorist attack, or a representative of such individual.
    ``(c) Rate Schedule.--

``If the amount with respect to     The tentative tax is:
        which the tentative tax to 
        be computed is:
    Not over $150,000..............
                                        1 percent of the amount by 
                                                which such amount 
                                                exceeds $100,000.
    Over $150,000 but not over 
        $200,000.
                                        $500 plus 2 percent of the 
                                                excess over $150,000.
    Over $200,000 but not over 
        $300,000.
                                        $1,500 plus 3 percent of the 
                                                excess over $200,000.
    Over $300,000 but not over 
        $500,000.
                                        $4,500 plus 4 percent of the 
                                                excess over $300,000.
    Over $500,000 but not over 
        $700,000.
                                        $12,500 plus 5 percent of the 
                                                excess over $500,000.
    Over $700,000 but not over 
        $900,000.
                                        $22,500 plus 6 percent of the 
                                                excess over $700,000.
    Over $900,000 but not over 
        $1,100,000.
                                        $34,500 plus 7 percent of the 
                                                excess over $900,000.
    Over $1,100,000 but not over 
        $1,600,000.
                                        $48,500 plus 8 percent of the 
                                                excess over $1,100,000.
    Over $1,600,000 but not over 
        $2,100,000.
                                        $88,500 plus 9 percent of the 
                                                excess over $1,600,000.
    Over $2,100,000 but not over 
        $2,600,000.
                                        $133,500 plus 10 percent of the 
                                                excess over $2,100,000.
    Over $2,600,000 but not over 
        $3,100,000.
                                        $183,500 plus 11 percent of the 
                                                excess over $2,600,000.
    Over $3,100,000 but not over 
        $3,600,000.
                                        $238,500 plus 12 percent of the 
                                                excess over $3,100,000.
    Over $3,600,000 but not over 
        $4,100,000.
                                        $298,500 plus 13 percent of the 
                                                excess over $3,600,000.
    Over $4,100,000 but not over 
        $5,100,000.
                                        $363,500 plus 14 percent of the 
                                                excess over $4,100,000.
    Over $5,100,000 but not over 
        $6,100,000.
                                        $503,500 plus 15 percent of the 
                                                excess over $5,100,000.
    Over $6,100,000 but not over 
        $7,100,000.
                                        $653,500 plus 16 percent of the 
                                                excess over $6,100,000.
    Over $7,100,000 but not over 
        $8,100,000.
                                        $813,500 plus 17 percent of the 
                                                excess over $7,100,000.
    Over $8,100,000 but not over 
        $9,100,000.
                                        $983,500 plus 18 percent of the 
                                                excess over $8,100,000.
    Over $9,100,000 but not over 
        $10,100,000.
                                        $1,163,500 plus 19 percent of 
                                                the excess over 
                                                $9,100,000.
    Over $10,100,000...............
                                        $1,353,500 plus 20 percent of 
                                                the excess over 
                                                $10,100,000.
    ``(d) Determination of Unified Credit.--In the case of an estate to 
which this section applies, subsection (a) shall not apply in 
determining the credit under section 2010.''.
    (b) Conforming Amendments.--
            (1) Section 2011 is amended by striking subsection (d) and 
        by redesignating subsections (e), (f), and (g) as subsections 
        (d), (e), and (f), respectively.
            (2) Section 2053(d)(3)(B) is amended by striking ``section 
        2011(e)'' and inserting ``section 2011(d)''.
            (3) Paragraph (9) of section 532(c) of the Economic Growth 
        and Tax Relief Reconciliation Act of 2001 is repealed.
    (c) Clerical Amendment.--The item relating to section 2201 in the 
table of sections for subchapter C of chapter 11 is amended to read as 
follows:

                              ``Sec. 2201. Combat zone-related deaths 
                                        of members of the Armed Forces 
                                        and deaths of victims of 
                                        certain terrorist attacks.''.
    (d) Effective Date; Waiver of Limitations.--
            (1) Effective date.--The amendments made by this section 
        shall apply to estates of decedents--
                    (A) dying on or after September 11, 2001, and
                    (B) in the case of individuals dying as a result of 
                the April 19, 1995, terrorist attack, dying on or after 
                April 19, 1995.
            (2) Waiver of limitations.--If refund or credit of any 
        overpayment of tax resulting from the amendments made by this 
        section is prevented at any time before the close of the 1-year 
        period beginning on the date of the enactment of this Act by 
        the operation of any law or rule of law (including res 
        judicata), such refund or credit may nevertheless be made or 
        allowed if claim therefor is filed before the close of such 
        period.

SEC. 313. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS EXEMPT 
              PAYMENTS.

    (a) In General.--For purposes of the Internal Revenue Code of 
1986--
            (1) payments made by an organization described in section 
        501(c)(3) of such Code by reason of the death, injury, or 
        wounding of an individual incurred as the result of the 
        terrorist attacks against the United States on September 11, 
        2001, shall be treated as related to the purpose or function 
        constituting the basis for such organization's exemption under 
        section 501 of such Code if such payments are made using an 
        objective formula which is consistently applied, and
            (2) in the case of a private foundation (as defined in 
        section 509 of such Code), any payment described in paragraph 
        (1) shall not be treated as made to a disqualified person for 
        purposes of section 4941 of such Code.
    (b) Effective Date.--This section shall apply to payments made on 
or after September 11, 2001.

SEC. 314. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

    (a) In General.--For purposes of the Internal Revenue Code of 
1986--
            (1) gross income shall not include any amount which (but 
        for this section) would be includible in gross income by reason 
        of the discharge (in whole or in part) of indebtedness of any 
        taxpayer if the discharge is by reason of the death of an 
        individual incurred as the result of the terrorist attacks 
        against the United States on September 11, 2001, and
            (2) return requirements under section 6050P of such Code 
        shall not apply to any discharge described in paragraph (1).
    (b) Effective Date.--This section shall apply to discharges made on 
or after September 11, 2001, and before January 1, 2002.

  PART II--GENERAL RELIEF FOR VICTIMS OF DISASTERS AND TERRORISTIC OR 
                            MILITARY ACTIONS

SEC. 321. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 (relating to 
items specifically excluded from gross income) is amended by 
redesignating section 139 as section 140 and inserting after section 
138 the following new section:

``SEC. 139. DISASTER RELIEF PAYMENTS.

    ``(a) General Rule.--Gross income shall not include--
            ``(1) any amount received as payment under section 406 of 
        the Air Transportation Safety and System Stabilization Act, or
            ``(2) any amount received by an individual as a qualified 
        disaster relief payment.
    ``(b) Qualified Disaster Relief Payment Defined.--For purposes of 
this section, the term `qualified disaster relief payment' means any 
amount paid to or for the benefit of an individual--
            ``(1) to reimburse or pay reasonable and necessary 
        personal, family, living, or funeral expenses incurred as a 
        result of a qualified disaster,
            ``(2) to reimburse or pay reasonable and necessary expenses 
        incurred for the repair or rehabilitation of a personal 
        residence or repair or replacement of its contents to the 
        extent that the need for such repair, rehabilitation, or 
        replacement is attributable to a qualified disaster,
            ``(3) by a person engaged in the furnishing or sale of 
        transportation as a common carrier by reason of the death or 
        personal physical injuries incurred as a result of a qualified 
        disaster, or
            ``(4) if such amount is paid by a Federal, State, or local 
        government, or agency or instrumentality thereof, in connection 
        with a qualified disaster in order to promote the general 
        welfare,
but only to the extent any expense compensated by such payment is not 
otherwise compensated for by insurance or otherwise.
    ``(c) Qualified Disaster Defined.--For purposes of this section, 
the term `qualified disaster' means--
            ``(1) a disaster which results from a terroristic or 
        military action (as defined in section 692(c)(2)),
            ``(2) a Presidentially declared disaster (as defined in 
        section 1033(h)(3)),
            ``(3) a disaster which results from an accident involving a 
        common carrier, or from any other event, which is determined by 
        the Secretary to be of a catastrophic nature, or
            ``(4) with respect to amounts described in subsection 
        (b)(4), a disaster which is determined by an applicable 
        Federal, State, or local authority (as determined by the 
        Secretary) to warrant assistance from the Federal, State, or 
        local government or agency or instrumentality thereof.
    ``(d) Coordination With Employment Taxes.--For purposes of chapter 
2 and subtitle C, a qualified disaster relief payment shall not be 
treated as net earnings from self-employment, wages, or compensation 
subject to tax.
    ``(e) No Relief for Certain Individuals.--Subsection (a) shall not 
apply with respect to any individual identified by the Attorney General 
to have been a participant or conspirator in a terroristic action (as 
so defined), or a representative of such individual.''.
    (b) Conforming Amendments.--The table of sections for part III of 
subchapter B of chapter 1 is amended by striking the item relating to 
section 139 and inserting the following new items:

                              ``Sec. 139. Disaster relief payments.
                              ``Sec. 140. Cross references to other 
                                        Acts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending on or after September 11, 2001.

SEC. 322. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND REQUIRED ACTIONS.

    (a) Expansion of Authority Relating to Disasters and Terroristic or 
Military Actions.--Section 7508A is amended to read as follows:

``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON OF 
              PRESIDENTIALLY DECLARED DISASTER OR TERRORISTIC OR 
              MILITARY ACTIONS.

    ``(a) In General.--In the case of a taxpayer determined by the 
Secretary to be affected by a Presidentially declared disaster (as 
defined in section 1033(h)(3)) or a terroristic or military action (as 
defined in section 692(c)(2)), the Secretary may specify a period of up 
to one year that may be disregarded in determining, under the internal 
revenue laws, in respect of any tax liability of such taxpayer--
            ``(1) whether any of the acts described in paragraph (1) of 
        section 7508(a) were performed within the time prescribed 
        therefor (determined without regard to extension under any 
        other provision of this subtitle for periods after the date 
        (determined by the Secretary) of such disaster or action),
            ``(2) the amount of any interest, penalty, additional 
        amount, or addition to the tax for periods after such date, and
            ``(3) the amount of any credit or refund.
    ``(b) Special Rules Regarding Pensions, Etc.--In the case of a 
pension or other employee benefit plan, or any sponsor, administrator, 
participant, beneficiary, or other person with respect to such plan, 
affected by a disaster or action described in subsection (a), the 
Secretary may specify a period of up to one year which may be 
disregarded in determining the date by which any action is required or 
permitted to be completed under this title. No plan shall be treated as 
failing to be operated in accordance with the terms of the plan solely 
as the result of disregarding any period by reason of the preceding 
sentence.
    ``(c) Special Rules for Overpayments.--The rules of section 7508(b) 
shall apply for purposes of this section.''.
    (b) Clarification of Scope of Acts Secretary May Postpone.--Section 
7508(a)(1)(K) (relating to time to be disregarded) is amended by 
striking ``in regulations prescribed under this section''.
    (c) Conforming Amendments to ERISA.--
            (1) Part 5 of subtitle B of title I of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) 
        is amended by adding at the end the following new section:

``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON OF 
              PRESIDENTIALLY DECLARED DISASTER OR TERRORISTIC OR 
              MILITARY ACTIONS.

    ``In the case of a pension or other employee benefit plan, or any 
sponsor, administrator, participant, beneficiary, or other person with 
respect to such plan, affected by a Presidentially declared disaster 
(as defined in section 1033(h)(3) of the Internal Revenue Code of 1986) 
or a terroristic or military action (as defined in section 692(c)(2) of 
such Code), the Secretary may, notwithstanding any other provision of 
law, prescribe, by notice or otherwise, a period of up to one year 
which may be disregarded in determining the date by which any action is 
required or permitted to be completed under this Act. No plan shall be 
treated as failing to be operated in accordance with the terms of the 
plan solely as the result of disregarding any period by reason of the 
preceding sentence.''.
            (2) Section 4002 of Employee Retirement Income Security Act 
        of 1974 (29 U.S.C. 1302) is amended by adding at the end the 
        following new subsection:
    ``(i) Special Rules Regarding Disasters, Etc.--In the case of a 
pension or other employee benefit plan, or any sponsor, administrator, 
participant, beneficiary, or other person with respect to such plan, 
affected by a Presidentially declared disaster (as defined in section 
1033(h)(3) of the Internal Revenue Code of 1986) or a terroristic or 
military action (as defined in section 692(c)(2) of such Code), the 
corporation may, notwithstanding any other provision of law, prescribe, 
by notice or otherwise, a period of up to one year which may be 
disregarded in determining the date by which any action is required or 
permitted to be completed under this Act. No plan shall be treated as 
failing to be operated in accordance with the terms of the plan solely 
as the result of disregarding any period by reason of the preceding 
sentence.''.
    (d) Additional Conforming Amendments.--
            (1) Section 6404 is amended--
                    (A) by striking subsection (h),
                    (B) by redesignating subsection (i) as subsection 
                (h), and
                    (C) by adding at the end the following new 
                subsection:
    ``(i) Cross Reference.--

                                ``For authority of the Secretary to 
abate certain amounts by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.
            (2) Section 6081(c) is amended to read as follows:
    ``(c) Cross References.--

                                ``For time for performing certain acts 
postponed by reason of war, see section 7508, and by reason of 
Presidentially declared disaster or terroristic or military action, see 
section 7508A.''.
            (3) Section 6161(d) is amended by adding at the end the 
        following new paragraph:
            ``(3) Postponement of certain acts.--

                                ``For time for performing certain acts 
postponed by reason of war, see section 7508, and by reason of 
Presidentially declared disaster or terroristic or military action, see 
section 7508A.''.
    (d) Clerical Amendments.--
            (1) The item relating to section 7508A in the table of 
        sections for chapter 77 is amended to read as follows:

                              ``Sec. 7508A. Authority to postpone 
                                        certain deadlines by reason of 
                                        Presidentially declared 
                                        disaster or terroristic or 
                                        military actions.''.
            (2) The table of contents for the Employee Retirement 
        Income Security Act of 1974 is amended by inserting after the 
        item relating to section 517 the following new item:

                              ``Sec. 518. Authority to postpone certain 
                                        deadlines by reason of 
                                        Presidentially declared 
                                        disaster or terroristic or 
                                        military actions.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to disasters and terroristic or military actions occurring on or 
after September 11, 2001, with respect to any action of the Secretary 
of the Treasury, the Secretary of Labor, or the Pension Benefit 
Guaranty Corporation occurring on or after the date of the enactment of 
this Act.

SEC. 323. INTERNAL REVENUE SERVICE DISASTER RESPONSE TEAM.

    (a) In General.--Section 7508A, as amended by section 322(a), is 
amended by adding at the end the following new subsection:
    ``(d) Duties of Disaster Response Team.--The Secretary shall 
establish as a permanent office in the national office of the Internal 
Revenue Service a disaster response team which, in coordination with 
the Federal Emergency Management Agency, shall assist taxpayers in 
clarifying and resolving Federal tax matters associated with or 
resulting from any Presidentially declared disaster (as defined in 
section 1033(h)(3)) or a terroristic or military action (as defined in 
section 692(c)(2)).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 324. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR MILITARY 
              ACTIONS.

    (a) Exclusion for Death Benefits.--Section 101 (relating to certain 
death benefits) is amended by adding at the end the following new 
subsection:
    ``(i) Certain Employee Death Benefits Payable by Reason of Death 
From Terroristic or Military Actions.--
            ``(1) In general.--Gross income does not include amounts 
        which are received (whether in a single sum or otherwise) if 
        such amounts are paid by an employer by reason of the death of 
        an employee incurred as a result of a terroristic or military 
        action (as defined in section 692(c)(2)).
            ``(2) No relief for certain individuals.--Paragraph (1) 
        shall not apply with respect to any individual identified by 
        the Attorney General to have been a participant or conspirator 
        in a terroristic action (as so defined), or a representative of 
        such individual.
            ``(3) Treatment of self-employed individuals.--For purposes 
        of this subsection, the term `employee' includes a self-
        employed person (as described in section 401(c)(1)).''.
    (b) Disability Income.--Section 104(a)(5) (relating to compensation 
for injuries or sickness) is amended by striking ``a violent attack'' 
and all that follows through the period and inserting ``a terroristic 
or military action (as defined in section 692(c)(2)).''.
    (c) Exemption From Income Tax for Certain Military or Civilian 
Employees.--Section 692(c) is amended--
            (1) by striking ``outside the United States'' in paragraph 
        (1), and
            (2) by striking ``Sustained Overseas'' in the heading.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending on or after September 11, 2001.

SEC. 325. CLARIFICATION OF DUE DATE FOR AIRLINE EXCISE TAX DEPOSITS.

    (a) In General.--Paragraph (3) of section 301(a) of the Air 
Transportation Safety and System Stabilization Act (Public Law 107-42) 
is amended to read as follows:
            ``(3) Airline-related deposit.--For purposes of this 
        subsection, the term `airline-related deposit' means any 
        deposit of taxes imposed by subchapter C of chapter 33 of such 
        Code (relating to transportation by air).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in section 301 of the Air Transportation Safety 
and System Stabilization Act (Public Law 107-42).

SEC. 326. COORDINATION WITH AIR TRANSPORTATION SAFETY AND SYSTEM 
              STABILIZATION ACT.

    No reduction in Federal tax liability by reason of any provision 
of, or amendment made by, this title shall be considered as being 
received from a collateral source for purposes of section 402(4) of the 
Air Transportation Safety and System Stabilization Act (Public Law 107-
42).

   PART III--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL 
                        SECURITY INVESTIGATIONS

SEC. 331. DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL 
              SECURITY INVESTIGATIONS.

    (a) Disclosure Without a Request of Information Relating to 
Terrorist Activities, Etc.--Paragraph (3) of section 6103(i) (relating 
to disclosure of return information to apprise appropriate officials of 
criminal activities or emergency circumstances) is amended by adding at 
the end the following new subparagraph:
                    ``(C) Terrorist activities, etc.--
                            ``(i) In general.--Except as provided in 
                        paragraph (6), the Secretary may disclose in 
                        writing return information (other than taxpayer 
                        return information) that may be related to a 
                        terrorist incident, threat, or activity to the 
                        extent necessary to apprise the head of the 
                        appropriate Federal law enforcement agency 
                        responsible for investigating or responding to 
                        such terrorist incident, threat, or activity. 
                        The head of the agency may disclose such return 
                        information to officers and employees of such 
                        agency to the extent necessary to investigate 
                        or respond to such terrorist incident, threat, 
                        or activity.
                            ``(ii) Disclosure to the department of 
                        justice.--Returns and taxpayer return 
                        information may also be disclosed to the 
                        Attorney General under clause (i) to the extent 
                        necessary for, and solely for use in preparing, 
                        an application under paragraph (7)(D).
                            ``(iii) Taxpayer identity.--For purposes of 
                        this subparagraph, a taxpayer's identity shall 
                        not be treated as taxpayer return information.
                            ``(iv) Termination.--No disclosure may be 
                        made under this subparagraph after December 31, 
                        2003.''.
    (b) Disclosure Upon Request of Information Relating to Terrorist 
Activities, Etc.--Subsection (i) of section 6103 (relating to 
disclosure to Federal officers or employees for administration of 
Federal laws not relating to tax administration) is amended by 
redesignating paragraph (7) as paragraph (8) and by inserting after 
paragraph (6) the following new paragraph:
            ``(7) Disclosure upon request of information relating to 
        terrorist activities, etc.--
                    ``(A) Disclosure to law enforcement agencies.--
                            ``(i) In general.--Except as provided in 
                        paragraph (6), upon receipt by the Secretary of 
                        a written request which meets the requirements 
                        of clause (iii), the Secretary may disclose 
                        return information (other than taxpayer return 
                        information) to officers and employees of any 
                        Federal law enforcement agency who are 
                        personally and directly engaged in the response 
                        to or investigation of terrorist incidents, 
                        threats, or activities.
                            ``(ii) Disclosure to state and local law 
                        enforcement agencies.--The head of any Federal 
                        law enforcement agency may disclose return 
                        information obtained under clause (i) to 
                        officers and employees of any State or local 
                        law enforcement agency but only if such agency 
                        is part of a team with the Federal law 
                        enforcement agency in such response or 
                        investigation and such information is disclosed 
                        only to officers and employees who are 
                        personally and directly engaged in such 
                        response or investigation.
                            ``(iii) Requirements.--A request meets the 
                        requirements of this clause if--
                                    ``(I) the request is made by the 
                                head of any Federal law enforcement 
                                agency (or his delegate) involved in 
                                the response to or investigation of 
                                terrorist incidents, threats, or 
                                activities, and
                                    ``(II) the request sets forth the 
                                specific reason or reasons why such 
                                disclosure may be relevant to a 
                                terrorist incident, threat, or 
                                activity.
                            ``(iv) Limitation on use of information.--
                        Information disclosed under this subparagraph 
                        shall be solely for the use of the officers and 
                        employees to whom such information is disclosed 
                        in such response or investigation.
                    ``(B) Disclosure to intelligence agencies.--
                            ``(i) In general.--Except as provided in 
                        paragraph (6), upon receipt by the Secretary of 
                        a written request which meets the requirements 
                        of clause (ii), the Secretary may disclose 
                        return information (other than taxpayer return 
                        information) to those officers and employees of 
                        the Department of Justice, the Department of 
                        the Treasury, and other Federal intelligence 
                        agencies who are personally and directly 
                        engaged in the collection or analysis of 
                        intelligence and counterintelligence 
                        information or investigation concerning 
                        terrorists and terrorist organizations and 
                        activities. For purposes of the preceding 
                        sentence, the information disclosed under the 
                        preceding sentence shall be solely for the use 
                        of such officers and employees in such 
                        investigation, collection, or analysis.
                            ``(ii) Requirements.--A request meets the 
                        requirements of this subparagraph if the 
                        request--
                                    ``(I) is made by an individual 
                                described in clause (iii), and
                                    ``(II) sets forth the specific 
                                reason or reasons why such disclosure 
                                may be relevant to a terrorist 
                                incident, threat, or activity.
                            ``(iii) Requesting individuals.--An 
                        individual described in this subparagraph is an 
                        individual--
                                    ``(I) who is an officer or employee 
                                of the Department of Justice or the 
                                Department of the Treasury who is 
                                appointed by the President with the 
                                advice and consent of the Senate or who 
                                is the Director of the United States 
                                Secret Service, and
                                    ``(II) who is responsible for the 
                                collection and analysis of intelligence 
                                and counterintelligence information 
                                concerning terrorists and terrorist 
                                organizations and activities.
                            ``(iv) Taxpayer identity.--For purposes of 
                        this subparagraph, a taxpayer's identity shall 
                        not be treated as taxpayer return information.
                    ``(C) Disclosure under ex parte orders.--
                            ``(i) In general.--Except as provided in 
                        paragraph (6), any return or return information 
                        with respect to any specified taxable period or 
                        periods shall, pursuant to and upon the grant 
                        of an ex parte order by a Federal district 
                        court judge or magistrate under clause (ii), be 
                        open (but only to the extent necessary as 
                        provided in such order) to inspection by, or 
                        disclosure to, officers and employees of any 
                        Federal law enforcement agency or Federal 
                        intelligence agency who are personally and 
                        directly engaged in any investigation, response 
                        to, or analysis of intelligence and 
                        counterintelligence information concerning any 
                        terrorist activity or threats. Return or return 
                        information opened pursuant to the preceding 
                        sentence shall be solely for the use of such 
                        officers and employees in the investigation, 
                        response, or analysis, and in any judicial, 
                        administrative, or grand jury proceedings, 
                        pertaining to any such terrorist activity or 
                        threat.
                            ``(ii) Application for order.--The Attorney 
                        General, the Deputy Attorney General, the 
                        Associate Attorney General, any Assistant 
                        Attorney General, or any United States attorney 
                        may authorize an application to a Federal 
                        district court judge or magistrate for the 
                        order referred to in clause (i). Upon such 
                        application, such judge or magistrate may grant 
                        such order if he determines on the basis of the 
                        facts submitted by the applicant that--
                                    ``(I) there is reasonable cause to 
                                believe, based upon information 
                                believed to be reliable, that the 
                                return or return information may be 
                                relevant to a matter relating to such 
                                terrorist activity or threat, and
                                    ``(II) the return or return 
                                information is sought exclusively for 
                                use in a Federal investigation, 
                                analysis, or proceeding concerning 
                                terrorist activity, terrorist threats, 
                                or terrorist organizations.
                    ``(D) Special rule for ex parte disclosure by the 
                irs.--
                            ``(i) In general.--Except as provided in 
                        paragraph (6), the Secretary may authorize an 
                        application to a Federal district court judge 
                        or magistrate for the order referred to in 
                        subparagraph (C)(i). Upon such application, 
                        such judge or magistrate may grant such order 
                        if he determines on the basis of the facts 
                        submitted by the applicant that the 
                        requirements of subparagraph (C)(ii)(I) are 
                        met.
                            ``(ii) Limitation on use of information.--
                        Information disclosed under clause (i)--
                                    ``(I) may be disclosed only to the 
                                extent necessary to apprise the head of 
                                the appropriate Federal law enforcement 
                                agency responsible for investigating or 
                                responding to a terrorist incident, 
                                threat, or activity, and
                                    ``(II) shall be solely for use in a 
                                Federal investigation, analysis, or 
                                proceeding concerning terrorist 
                                activity, terrorist threats, or 
                                terrorist organizations.
                        The head of such Federal agency may disclose 
                        such information to officers and employees of 
                        such agency to the extent necessary to 
                        investigate or respond to such terrorist 
                        incident, threat, or activity.
                    ``(E) Termination.--No disclosure may be made under 
                this paragraph after December 31, 2003.''.
    (c) Conforming Amendments.--
            (1) Section 6103(a)(2) is amended by inserting ``any local 
        law enforcement agency receiving information under subsection 
        (i)(7)(A),'' after ``State,''.
            (2) The heading of section 6103(i)(3) is amended by 
        inserting ``or terrorist'' after ``criminal''.
            (3) Paragraph (4) of section 6103(i) is amended--
                    (A) in subparagraph (A) by inserting ``or (7)(C)'' 
                after ``paragraph (1)'', and
                    (B) in subparagraph (B) by striking ``or (3)(A)'' 
                and inserting ``(3)(A) or (C), or (7)''.
            (4) Paragraph (6) of section 6103(i) is amended--
                    (A) by striking ``(3)(A)'' and inserting ``(3)(A) 
                or (C)'', and
                    (B) by striking ``or (7)'' and inserting ``(7), or 
                (8)''.
            (5) Section 6103(p)(3) is amended--
                    (A) in subparagraph (A) by striking ``(7)(A)(ii)'' 
                and inserting ``(8)(A)(ii)'', and
                    (B) in subparagraph (C) by striking 
                ``(i)(3)(B)(i)'' and inserting ``(i)(3)(B)(i) or 
                (7)(A)(ii)''.
            (6) Section 6103(p)(4) is amended--
                    (A) in the matter preceding subparagraph (A)--
                            (i) by striking ``or (5),'' the first place 
                        it appears and inserting ``(5), or (7),'', and
                            (ii) by striking ``(i)(3)(B)(i),'' and 
                        inserting ``(i)(3)(B)(i) or (7)(A)(ii),'', and
                    (B) in subparagraph (F)(ii) by striking ``or (5),'' 
                the first place it appears and inserting ``(5) or 
                (7),''.
            (7) Section 6103(p)(6)(B)(i) is amended by striking 
        ``(i)(7)(A)(ii)'' and inserting ``(i)(8)(A)(ii)''.
            (8) Section 6105(b) is amended--
                    (A) by striking ``or'' at the end of paragraph (2),
                    (B) by striking ``paragraphs (1) or (2)'' in 
                paragraph (3) and inserting ``paragraph (1), (2), or 
                (3)'',
                    (C) by redesignating paragraph (3) as paragraph 
                (4), and
                    (D) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) to the disclosure of tax convention information on 
        the same terms as return information may be disclosed under 
        paragraph (3)(C) or (7) of section 6103(i), except that in the 
        case of tax convention information provided by a foreign 
        government, no disclosure may be made under this paragraph 
        without the written consent of the foreign government, or''.
            (9) Section 7213(a)(2) is amended by striking 
        ``(i)(3)(B)(i),'' and inserting ``(i)(3)(B)(i) or 
        (7)(A)(ii),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to disclosures made on or after the date of the enactment of this 
Act.

          TITLE IV--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

SEC. 401. 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, and 2002.--'', and
            (2) by striking ``during 2000 or 2001,'' and inserting 
        ``during 2000, 2001, or 2002,''.
    (b) Conforming Amendments.--
            (1) Section 904(h) is amended by striking ``during 2000 or 
        2001'' and inserting ``during 2000, 2001, or 2002''.
            (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.
    (c) Technical Correction.--Section 24(d)(1)(B) is amended by 
striking ``amount of credit allowed by this section'' and inserting 
``aggregate amount of credits allowed by this subpart''.
    (d) Effective Dates.--
            (1) The amendments made by subsections (a) and (b) shall 
        apply to taxable years beginning after December 31, 2001.
            (2) The amendment made by subsection (c) shall apply to 
        taxable years beginning after December 31, 2000.

SEC. 402. WORK OPPORTUNITY CREDIT.

    (a) In General.--Subparagraph (B) of section 51(c)(4) is amended by 
striking ``2001'' and inserting ``2002''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals who begin work for the employer after December 31, 
2001.

SEC. 403. WELFARE-TO-WORK CREDIT.

    (a) In General.--Subsection (f) of section 51A is amended by 
striking ``2001'' and inserting ``2002''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals who begin work for the employer after December 31, 
2001.

SEC. 404. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE RESOURCES.

    (a) In General.--Subparagraphs (A), (B), and (C) of section 
45(c)(3) are each amended by striking ``2002'' and inserting ``2003''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 405. 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 ``2003''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2001.

SEC. 406. QUALIFIED ZONE ACADEMY BONDS.

    (a) In General.--Paragraph (1) of section 1397E(e) is amended by 
striking ``2000, and 2001'' and inserting ``2000, 2001, and 2002''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 407. SUBPART F EXEMPTION FOR ACTIVE FINANCING.

    (a) In General.--
            (1) Section 953(e)(10) is amended--
                    (A) by striking ``2002'' and inserting ``2003'', 
                and
                    (B) by striking ``2001'' and inserting ``2002''.
            (2) Section 954(h)(9) is amended by striking ``2002'' and 
        inserting ``2003''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 408. COVER OVER OF TAX ON DISTILLED SPIRITS.

    (a) In General.--Paragraph (1) of section 7652(f) is amended by 
striking ``2002'' and inserting ``2003''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 409. DELAY IN EFFECTIVE DATE OF REQUIREMENT FOR APPROVED DIESEL OR 
              KEROSENE TERMINALS.

    Paragraph (2) of section 1032(f) of the Taxpayer Relief Act of 1997 
(Public Law 105-34) is amended by striking ``2002'' and inserting 
``2003''.

SEC. 410. 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, 2002,'', and
                    (B) in clauses (i), (ii), and (iii), by striking 
                ``2002'', ``2003'', and ``2004'', respectively, and 
                inserting ``2003'', ``2004'', and ``2005'', 
                respectively, and
            (2) in subsection (f), by striking ``2004'' and inserting 
        ``2005''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 411. 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, 2002,'', and
                    (B) in subparagraphs (A), (B), and (C), by striking 
                ``2002'', ``2003'', and ``2004'', respectively, and 
                inserting ``2003'', ``2004'', and ``2005'', 
                respectively, and
            (2) in subsection (e), by striking ``2004'' and inserting 
        ``2005''.
    (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, 2005.''.
            (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 take 
effect on the date of the enactment of this Act.

SEC. 412. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH 
              BENEFITS.

    (a) In General.--Subsection (f) of section 9812 is amended by 
striking ``2001'' and inserting ``2002''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning after December 31, 2001.

SEC. 413. COMBINED EMPLOYMENT TAX REPORTING.

    (a) Demonstration Project.--Section 976 of the Taxpayer Relief Act 
of 1997 is amended by striking ``with the date which is 5 years after 
the date of the enactment of this Act'' and inserting ``on December 31, 
2002''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

     TITLE V--EXTENSION OF ADDITIONAL PROVISIONS EXPIRING IN 2001.

SEC. 501. GENERALIZED SYSTEM OF PREFERENCES.

    (a) Extension of Duty-Free Treatment Under System.--Section 505 of 
the Trade Act of 1974 (19 U.S.C. 2465) is amended by striking 
``September 30, 2001'' and inserting ``December 31, 2002''.
    (b) Retroactive Application for Certain Liquidations and 
Reliquidations.--
            (1) In general.--
                    (A) Entry of certain articles.--Notwithstanding 
                section 514 of the Tariff Act of 1930 or any other 
                provision of law, and subject to paragraph (2), the 
                entry--
                            (i) of any article to which duty-free 
                        treatment under title V of the Trade Act of 
                        1974 would have applied if the entry had been 
                        made on September 30, 2001;
                            (ii) that was made after September 30, 
                        2001, and before the date of enactment of this 
                        Act; and
                            (iii) to which duty-free treatment under 
                        title V of that Act did not apply,
                shall be liquidated or reliquidated as free of duty, 
                and the Secretary of the Treasury shall refund any duty 
                paid with respect to such entry.
                    (B) Entry.--In this subsection, the term ``entry'' 
                includes a withdrawal from warehouse for consumption.
            (2) Requests.--Liquidation or reliquidation may be made 
        under paragraph (1) with respect to an entry only if a request 
        therefor is filed with the Customs Service, within 180 days 
        after the date of enactment of this Act, that contains 
        sufficient information to enable the Customs Service--
                    (A) to locate the entry; or
                    (B) to reconstruct the entry if it cannot be 
                located.
    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2001.

SEC. 502. ANDEAN TRADE PREFERENCE ACT.

    (a) In General.--Section 208(b) of the Andean Trade Preference Act 
(19 U.S.C. 3206(b))is amended by striking ``10 years after December 4, 
1991'' and inserting ``after June 4, 2002''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on December 5, 2001.

SEC. 503. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE.

    (a) Assistance for Workers.--Section 245 of the Trade Act of 1974 
(19 U.S.C. 2317) is amended by striking ``October 1, 1998, and ending 
September 30, 2001,'' each place it appears and inserting ``October 1, 
2001, and ending December 31, 2002,''.
    (b) Assistance for Firms.--Section 256(b) of the Trade Act of 1974 
(19 U.S.C. 2346(b)) is amended by striking ``October 1, 1998, and 
ending September 30, 2001'' and inserting ``October 1, 2001, and ending 
December 31, 2002,''.
    (c) Termination.--Section 285(c) of the Trade Act of 1974 (19 
U.S.C. 2771 note) is amended in paragraphs (1) and (2)(A), by striking 
``September 30, 2001'' and inserting ``December 31, 2002''.
    (d) Training Limitation Under NAFTA Program.--Section 250(d)(2) of 
the Trade Act of 1974 (19 U.S.C. 2331(d)(2)) is amended by striking 
``October 1, 1998, and ending September 30, 2001'' and inserting 
``October 1, 2001, and ending December 31, 2002''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

  TITLE VI--HEALTH INSURANCE COVERAGE OPTIONS FOR RECENTLY UNEMPLOYED 
                     INDIVIDUALS AND THEIR FAMILIES

SEC. 601. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE FOR 
              INDIVIDUALS AND THEIR FAMILIES.

    (a) Establishment.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, the Secretary of the Treasury, in 
        consultation with the Secretary of Labor, shall establish a 
        program under which 75 percent of the premium for COBRA 
        continuation coverage shall be provided for an individual who--
                    (A) at any time during the period that begins on 
                September 11, 2001, and ends on December 31, 2002, is 
                separated from employment; and
                    (B) is eligible for, and has elected coverage 
                under, COBRA continuation coverage.
            (2) Inclusion of certain individuals.--For purposes of 
        paragraph (1), the spouse, child, or other individual who was 
        an insured under health insurance coverage of an individual who 
        was killed as a result of the terrorist-related aircraft 
        crashes on September 11, 2001, or as a result of any other 
        terrorist-related event occurring during the period described 
        in that paragraph, and who is eligible for, and has elected 
        coverage under, COBRA continuation coverage shall be eligible 
        for premium assistance under the program established under this 
        section.
            (3) State option to elect administration of program.--
                    (A) In general.--A State may elect to administer 
                the premium assistance program established under this 
                section if the State submits to the Secretary of the 
                Treasury, not later than January 1, 2002, a plan that 
                describes how the State will administer such program on 
                behalf of the individuals described in paragraph (1) or 
                (2) who reside in the State beginning on that date.
                    (B) State entitlement.--In the case of a State that 
                submits a plan under subparagraph (A), the Secretary of 
                the Treasury shall pay to each such State an amount for 
                each quarter equal to the total amount of premium 
                subsidies provided in that quarter on behalf of such 
                individuals.
            (4) Immediate implementation.--The program established 
        under this section shall be implemented without regard to 
        whether or not final regulations to carry out such program have 
        been promulgated by the date described in paragraph (1).
    (b) Limitation of Period of Premium Assistance.--
            (1) In general.--Premium assistance provided in accordance 
        with this section shall end with respect to an individual on 
        the earlier of--
                    (A) the date the individual is no longer covered 
                under COBRA continuation coverage; or
                    (B) 12 months after the date the individual is 
                first enrolled in the premium assistance program 
                established under this section.
            (2) No assistance after december 31, 2002.--No premium 
        assistance (including payment for such assistance) may be 
        provided under this section after December 31, 2002.
    (c) Payment Arrangements; Crediting of Assistance.--
            (1) Provision of assistance.--
                    (A) In general.--Premium assistance shall be 
                provided under the program established under this 
                section through direct payment arrangements with a 
                group health plan (including a multiemployer plan), an 
                issuer of health insurance coverage, an administrator, 
                or an employer as appropriate with respect to the 
                individual provided such assistance.
                    (B) Additional option for state-run program.--In 
                the case of a State that elects to administer the 
                program established under this section, such assistance 
                may be provided through the State public employment 
                office or other agency responsible for administering 
                the State unemployment compensation program.
            (2) Premiums payable by individual reduced by amount of 
        assistance.--Premium assistance provided under this section 
        shall be credited by the group health plan, issuer of health 
        insurance coverage, or an administrator against the premium 
        otherwise owed by the individual involved for COBRA 
        continuation coverage.
    (d) Program Requirements.--Premium assistance shall be provided 
under the program established under this section consistent with the 
following:
            (1) All qualifying individuals may apply.--All individuals 
        described in paragraph (1) or (2) of subsection (a) may apply 
        for such assistance at any time during the period described in 
        subsection (a)(1)(A).
            (2) Selection on first-come, first-served basis.--Such 
        assistance shall be provided to such individuals who apply for 
        the assistance in the order in which they apply.
    (e) Limitation on Entitlement.--Nothing in this section shall be 
construed as establishing any entitlement of individuals described in 
paragraph (1) or (2) of subsection (a) to premium assistance under this 
section.
    (f) Disregard of Subsidies for Purposes of Federal and State 
Programs.--Notwithstanding any other provision of law, any premium 
assistance provided to, or on behalf of, an individual under this 
section, shall not be considered income or resources in determining 
eligibility for, or the amount of assistance or benefits provided 
under, any other Federal public benefit or State or local public 
benefit.
    (g) Change in COBRA Notice.--
            (1) General notice.--
                    (A) In general.--In the case of notices provided 
                under section 4980B(f)(6) of the Internal Revenue Code 
                of 1986, section 2206 of the Public Health Service Act 
                (42 U.S.C. 300bb-6), section 606 of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1166), or section 8905a(f)(2)(A) of title 5, United 
                States Code, with respect to individuals who, during 
                the period described in subsection (a)(1)(A), become 
                entitled to elect COBRA continuation coverage, such 
                notices shall include an additional notification to the 
                recipient of the availability of premium assistance for 
                such coverage under this section and for temporary 
                medicaid assistance under section 603 for the remaining 
                portion of COBRA continuation premiums.
                    (B) Alternative notice.--In the case of COBRA 
                continuation coverage to which the notice provision 
                under such sections does not apply, the Secretary of 
                the Treasury, in consultation with the Secretary of 
                Labor, shall, in coordination with administrators of 
                the group health plans (or other entities) that provide 
                or administer the COBRA continuation coverage involved, 
                assure the provision of such notice.
                    (C) Form.--The requirement of the additional 
                notification under this paragraph may be met by 
                amendment of existing notice forms or by inclusion of a 
                separate document with the notice otherwise required.
            (2) Specific requirements.--Each additional notification 
        under paragraph (1) shall include--
                    (A) the forms necessary for establishing 
                eligibility and enrollment in the premium assistance 
                program established under this section in connection 
                with the coverage with respect to each covered employee 
                or other qualified beneficiary;
                    (B) the name, address, and telephone number 
                necessary to contact the administrator and any other 
                person maintaining relevant information in connection 
                with the premium assistance; and
                    (C) the following statement displayed in a 
                prominent manner:
    ``You may be eligible to receive assistance with payment of 75 
percent of your COBRA continuation coverage premiums and with temporary 
medicaid coverage for the remaining premium portion for a duration of 
not to exceed 12 months.''.
            (3) Notice relating to retroactive coverage.--In the case 
        of such notices previously transmitted before the date of 
        enactment of this Act in the case of an individual described in 
        paragraph (1) who has elected (or is still eligible to elect) 
        COBRA continuation coverage as of the date of enactment of this 
        Act, the administrator of the group health plan (or other 
        entity) involved or the Secretary of the Treasury, in 
        consultation with the Secretary of Labor, (in the case 
        described in the paragraph (1)(B)) shall provide (within 60 
        days after the date of enactment of this Act) for the 
        additional notification required to be provided under paragraph 
        (1).
            (4) Model notices.--Not later than 30 days after the date 
        of enactment of this Act, the Secretary of the Treasury shall 
        prescribe models for the additional notification required under 
        this subsection.
    (h) Reports.--Beginning on January 1, 2002, and every 3 months 
thereafter until January 1, 2003, the Secretary of the Treasury shall 
submit a report to Congress regarding the premium assistance program 
established under this section that includes the following:
            (1) The status of the implementation of the program.
            (2) The number of individuals provided assistance under the 
        program as of the date of the report.
            (3) The average dollar amount (monthly and annually) of the 
        premium assistance provided under the program.
            (4) The number and identification of the States that have 
        elected to administer the program.
            (5) The total amount of expenditures incurred (with 
        administrative expenditures noted separately) under the program 
        as of the date of the report.
    (i) Appropriation.--
            (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to carry out this 
        section, such sums as are necessary for each of fiscal years 
        2002 and 2003.
            (2) Obligation of funds.--This section constitutes budget 
        authority in advance of appropriations Acts and represents the 
        obligation of the Federal Government to provide for the payment 
        of premium assistance under this section.
    (j) Sunset.--No premium assistance (including payment for such 
assistance) may be provided under this section after December 31, 2002.

SEC. 602. STATE OPTION TO PROVIDE TEMPORARY MEDICAID COVERAGE FOR 
              CERTAIN UNINSURED INDIVIDUALS.

    (a) State Option.--Notwithstanding any other provision of law, a 
State may elect to provide under its medicaid program under title XIX 
of the Social Security Act medical assistance in the case of an 
individual--
            (1) who at any time during the period that begins on 
        September 11, 2001, and ends on December 31, 2002, is separated 
        from employment;
            (2) who is not eligible for COBRA continuation coverage;
            (3) who is uninsured; and
            (4) whose assets, resources, and earned or unearned income 
        (or both) do not exceed such limitations (if any) as the State 
        may establish.
    (b) Limitation of Period of Coverage.--Medical assistance provided 
in accordance with this section shall end with respect to an individual 
on the earlier of--
            (1) the date the individual is no longer uninsured; or
            (2) subject to subsection (c)(4), 12 months after the date 
        the individual first receives such assistance.
    (c) Special Rules.--In the case of medical assistance provided 
under this section--
            (1) the Federal medical assistance percentage under section 
        1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) shall 
        be the enhanced FMAP (as defined in section 2105(b) of such Act 
        (42 U.S.C. 1397ee(b)));
            (2) a State may elect to apply any income, asset, or 
        resource limitation permitted under the State medicaid plan or 
        under title XIX of such Act;
            (3) the provisions of section 1916(g) of the Social 
        Security Act (42 U.S.C. 1396o) shall apply to the provision of 
        such assistance in the same manner as the provisions of such 
        section apply with respect to individuals provided medical 
        assistance only under subclause (XV) or (XVI) of section 
        1902(a)(10)(A)(ii) of such Act (42 U.S.C. 1396a(a)(10)(A)(ii));
            (4) a State may elect to provide such assistance in 
        accordance with section 1902(a)(34) of the Social Security Act 
        (42 U.S.C. 1396a(a)(34)) and any assistance provided with 
        respect to a month described in that section shall not be 
        included in the determination of the 12-month period under 
        subsection (b)(2);
            (5) a State may elect to make eligible for such medical 
        assistance a dependent spouse or children of an individual 
        eligible for medical assistance under subsection (a), if such 
        spouse or children are uninsured;
            (6) individuals eligible for medical assistance under this 
        section shall be deemed to be described in the list of 
        individuals described in the matter preceding paragraph (1) of 
        section 1905(a) of such Act (42 U.S.C. 1396d(a));
            (7) a State may elect to provide such medical assistance 
        without regard to any limitation under sections 401(a), 402(b), 
        403, and 421 of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 1611(a), 
        1612(b), 1613, and 1631) and no debt shall accrue under an 
        affidavit of support against any sponsor of an individual who 
        is an alien who is provided such assistance, and the cost of 
        such assistance shall not be considered as an unreimbursed 
        cost; and
            (8) the Secretary of Health and Human Services shall not 
        count, for purposes of section 1108(f) of the Social Security 
        Act (42 U.S.C. 1308(f)), such amount of payments under this 
        section as bears a reasonable relationship to the average 
        national proportion of payments made under this section for the 
        50 States and the District of Columbia to the payments 
        otherwise made under title XIX for such States and District.
    (d) Sunset.--No medical assistance may be provided under this 
section after December 31, 2002.

SEC. 603. STATE OPTION TO PROVIDE TEMPORARY COVERAGE UNDER MEDICAID FOR 
              THE UNSUBSIDIZED PORTION OF COBRA CONTINUATION PREMIUMS.

    (a) State Option.--
            (1) In General.--Notwithstanding any other provision of 
        law, a State may elect to provide under its medicaid program 
        under title XIX of the Social Security Act medical assistance 
        in the form of payment for the portion of the premium for COBRA 
        continuation coverage for which an individual does not receive 
        a subsidy under the premium assistance program established 
        under section 601 in the case of an individual--
                    (A) who at any time during the period that begins 
                on September 11, 2001, and ends on December 31, 2002, 
                is separated from employment;
                    (B) who is eligible for, and has elected coverage 
                under, COBRA continuation coverage;
                    (C) who is receiving premium assistance under the 
                program established under section 601; and
                    (D) whose family income does not exceed 200 percent 
                of the poverty line.
            (2) Inclusion of certain individuals.--For purposes of 
        paragraph (1), the spouse, child, or other individual who was 
        an insured under health insurance coverage of an individual who 
        was killed as a result of the terrorist-related aircraft 
        crashes on September 11, 2001, or as a result of any other 
        terrorist-related event occurring during the period described 
        in that paragraph, and who satisfies the requirements of 
        subparagraphs (B), (C), and (D) of paragraph (1) shall be 
        eligible for medical assistance under this section.
    (b) Limitation of Period of Coverage.--Medical assistance provided 
in accordance with this section shall end with respect to an individual 
on the earlier of--
            (1) the date the individual is no longer covered under 
        COBRA continuation coverage; or
            (2) 12 months after the date the individual first receives 
        such assistance under this section.
    (c) Special Rules.--In the case of medical assistance provided 
under this section--
            (1) such assistance may be provided without regard to--
                    (A) whether the State otherwise has elected to make 
                medical assistance available for COBRA premiums under 
                section 1902(a)(10)(F) of the Social Security Act (42 
                U.S.C. 1396a(a)(10)(F)); or
                    (B) the conditions otherwise imposed for the 
                provision of medical assistance for such COBRA premiums 
                under clause (XII) of the matter following section 
                1902(a)(10)(G) of the Social Security Act (42 U.S.C. 
                1396a(a)(10)(G)), or paragraphs (1)(B), (1)(C), (1)(D), 
                and (4) of section 1902(u) of such Act (42 U.S.C. 
                1396a(u)); and
            (2) paragraphs (1), (2), (4), (5), (7), and (8) of 
        subsection (c) of section 602 apply to such assistance in the 
        same manner as such paragraphs apply to the provision of 
        medical assistance under that section.
    (d) Sunset.--No medical assistance may be provided under this 
section after December 31, 2002.

SEC. 604. TEMPORARY INCREASES OF MEDICAID FMAP FOR FISCAL YEAR 2002.

    (a) Permitting Maintenance of Fiscal Year 2001 FMAP.--
Notwithstanding any other provision of law, but subject to subsection 
(d), if the FMAP determined without regard to this section for a State 
for fiscal year 2002 is less than the FMAP as so determined for fiscal 
year 2001, the FMAP for the State for fiscal year 2001 shall be 
substituted for the State's FMAP for fiscal year 2002, before the 
application of this section.
    (b) General 1.50 Percentage Points Increase.--Notwithstanding any 
other provision of law, but subject to subsections (d) and (e), for 
each State for each calendar quarter in fiscal year 2002, the FMAP 
(taking into account the application of subsection (a)) shall be 
increased by 1.50 percentage points.
    (c) Further Increase for States with High Unemployment Rates.--
            (1) In general.--Notwithstanding any other provision of 
        law, but subject to subsections (d) and (e), the FMAP for a 
        high unemployment State for a calendar quarter in fiscal year 
        2002 (and any subsequent calendar quarter in such fiscal year 
        regardless of whether the State continues to be a high 
        unemployment State for a calendar quarter in such fiscal year) 
        shall be increased (after the application of subsections (a) 
        and (b)) by 1.50 percentage points.
            (2) High unemployment state.--For purposes of this 
        subsection, a State is a high unemployment State for a calendar 
        quarter if, for any 3 consecutive months beginning on or after 
        June 2001 and ending with the second month before the beginning 
        of the calendar quarter, the State has an unemployment rate 
        that exceeds the national average unemployment rate. Such 
        unemployment rates for such months shall be determined based on 
        publications of the Bureau of Labor Statistics of the 
        Department of Labor.
    (d) 1-Year Increase in Cap On Medicaid Payments To Territories.--
Notwithstanding any other provision of law, with respect to fiscal year 
2002, the amounts otherwise determined for Puerto Rico, the Virgin 
Islands, Guam, the Northern Mariana Islands, and American Samoa under 
section 1108 of the Social Security Act (42 U.S.C. 1308) shall each be 
increased by an amount equal to 3.093 percentage points of such 
amounts.
    (e) Scope of Application.--The increases in the FMAP for a State 
under this section shall apply only for purposes of title XIX of the 
Social Security Act and shall not apply with respect to--
            (1) disproportionate share hospital payments described in 
        section 1923 of such Act (42 U.S.C. 1396r-4); and
            (2) payments under titles IV and XXI of such Act (42 U.S.C. 
        601 et seq. and 1397aa et seq.).
    (f) State Eligibility.--A State is eligible for an increase in its 
FMAP under subsection (b) or (c) only if the eligibility under its 
State plan under title XIX of the Social Security Act (including any 
waiver under such title or under section 1115 of such Act (42 U.S.C. 
1315)) is no more restrictive than the eligibility under such plan (or 
waiver) as in effect on October 1, 2001.

SEC. 605. DEFINITIONS.

    In this title:
            (1) Administrator.--The term ``administrator'' has the 
        meaning given that term in section 3(16)(A) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1002(16)(A)).
            (2) COBRA continuation coverage.--
                    (A) In general.--The term ``COBRA continuation 
                coverage'' means coverage under a group health plan 
                provided by an employer pursuant to title XXII of the 
                Public Health Service Act, section 4980B of the 
                Internal Revenue Code of 1986, part 6 of subtitle B of 
                title I of the Employee Retirement Income Security Act 
                of 1974, or section 8905a of title 5, United States 
                Code.
                    (B) Application to employers in states requiring 
                such coverage.--Such term includes such coverage 
                provided by an employer in a State that has enacted a 
                law that requires the employer to provide such coverage 
                even though the employer would not otherwise be 
                required to provide such coverage under the provisions 
                of law referred to in subparagraph (A).
            (3) Covered employee.--The term ``covered employee'' has 
        the meaning given that term in section 607(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1167(2)).
            (4) Federal public benefit.--The term ``Federal public 
        benefit'' has the meaning given that term in section 401(c) of 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 (8 U.S.C. 1611(c)).
            (5) FMAP.--The term ``FMAP'' means the Federal medical 
        assistance percentage, as defined in section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)).
            (6) Group health plan.--The term ``group health plan'' has 
        the meaning given that term in section 2791(a) of the Public 
        Health Service Act (42 U.S.C. 300gg-91(a)) and in section 
        607(1) of the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1167(1)).
            (7) Health insurance coverage.--The term ``health insurance 
        coverage'' has the meaning given that term in section 
        2791(b)(1) of the Public Health Service Act (42 U.S.C. 300gg-
        91(b)(1)).
            (8) Multiemployer plan.--The term ``multiemployer plan'' 
        has the meaning given that term in section 3(37) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1002(37)).
            (9) Poverty line.--The term ``poverty line'' has the 
        meaning given that term in section 2110(c)(5) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(5)).
            (10) Qualified beneficiary.--The term ``qualified 
        beneficiary'' has the meaning given that term in section 607(3) 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1167(3)).
            (11) State.--The term ``State'' has the meaning given such 
        term for purposes of title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
            (12) State or local public benefit.--The term ``State or 
        local public benefit'' has the meaning given that term in 
        section 411(c) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 1621(c)).
            (13) Uninsured.--
                    (A) In general.--The term ``uninsured'' means, with 
                respect to an individual, that the individual is not 
                covered under--
                            (i) a group health plan;
                            (ii) health insurance coverage; or
                            (iii) a program under title XVIII, XIX, or 
                        XXI of the Social Security Act (other than 
                        under such title XIX pursuant to section 602).
                    (B) Exclusion.--Such coverage under clause (i) or 
                (ii) shall not include coverage consisting solely of 
                coverage of excepted benefits (as defined in section 
                2791(c) of the Public Health Service Act (42 U.S.C. 
                300gg-91(c)).

          TITLE VII--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

SEC. 701. SHORT TITLE.

    This title may be cited as the ``Temporary Unemployment 
Compensation Act of 2001''.

SEC. 702. 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.--
            (1) In general.--Any agreement under subsection (a) shall 
        provide that the State agency of the State will make--
                    (A) payments of regular compensation to individuals 
                in amounts and to the extent that such payments would 
                be determined if the State law were applied with the 
                modifications described in paragraph (2); and
                    (B) payments of temporary supplemental unemployment 
                compensation to individuals who--
                            (i) have exhausted all rights to regular 
                        compensation under the State law;
                            (ii) do not, with respect to a week, have 
                        any rights to compensation (excluding extended 
                        compensation) under the State law of any other 
                        State (whether one that has entered into an 
                        agreement under this title or otherwise) nor 
                        compensation under any other Federal law (other 
                        than under the Federal-State Extended 
                        Unemployment Compensation Act of 1970 (26 
                        U.S.C. 3304 note)), and are not paid or 
                        entitled to be paid any additional compensation 
                        under any Federal or State law; and
                            (iii) are not receiving compensation with 
                        respect to such week under the unemployment 
                        compensation law of Canada.
            (2) Modifications described.--The modifications described 
        in this paragraph are as follows:
                    (A) Alternative base period.--An individual shall 
                be eligible for regular compensation if the individual 
                would be so eligible, determined by applying--
                            (i) the base period that would otherwise 
                        apply under the State law if this title had not 
                        been enacted; or
                            (ii) a base period ending at the close of 
                        the calendar quarter most recently completed 
                        before the date of the individual's application 
                        for benefits, provided that wage data for that 
                        quarter has been reported to the State;
                whichever results in the greater amount.
                    (B) Part-time employment.--An individual shall not 
                be denied regular compensation under the State law's 
                provisions relating to availability for work, active 
                search for work, or refusal to accept work, solely by 
                virtue of the fact that such individual is seeking, or 
                is available for, only part-time (and not full-time) 
                work, if--
                            (i) the individual's employment on which 
                        eligibility for the regular compensation is 
                        based was part-time employment; or
                            (ii) the individual can show good cause for 
                        seeking, or being available for, only part-time 
                        (and not full-time) work.
                    (C) Increased benefits.--
                            (i) In general.--The amount of regular 
                        compensation (including dependents' allowances) 
                        payable for any week shall be equal to the 
                        amount determined under the State law (before 
                        the application of this subparagraph), plus an 
                        amount equal to the greater of--
                                    (I) 15 percent of the amount so 
                                determined; or
                                    (II) $25.
                            (ii) Rounding.--For purposes of determining 
                        the amount under clause (i)(I), such amount 
                        shall be rounded to the dollar amount specified 
                        under State law.
    (c) Nonreduction Rule.--Under the agreement, subsection (b)(2)(C) 
shall not apply (or shall cease to apply) with respect to a State upon 
a determination by the Secretary that the method governing the 
computation of regular compensation under the State law of that State 
has been modified in a way such that--
            (1) the average weekly amount of regular compensation which 
        will be payable during the period of the agreement (determined 
        disregarding the modifications described in subsection (b)(2)) 
        will be less than
            (2) the average weekly amount of regular compensation which 
        would otherwise have been payable during such period under the 
        State law, as in effect on September 11, 2001.
    (d) Coordination Rules.--
            (1) Regular compensation payable under a federal law.--The 
        modifications described in subsection (b)(2) shall also apply 
        in determining the amount of benefits payable under any Federal 
        law to the extent that those benefits are determined by 
        reference to regular compensation payable under the State law 
        of the State involved.
            (2) TSUC to serve as second-tier benefits.--Notwithstanding 
        any other provision of law, extended benefits shall not be 
        payable to any individual for any week for which temporary 
        supplemental unemployment compensation is payable to such 
        individual.
    (e) Exhaustion of Benefits.--For purposes of subsection 
(b)(1)(B)(i), an individual shall be considered 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.
    (f) Weekly Benefit Amount, Terms and Conditions, Etc. Relating to 
TSUC.--For purposes of any agreement under this title--
            (1) the amount of temporary supplemental unemployment 
        compensation which shall be payable to an individual for any 
        week of total unemployment shall be equal to the amount of 
        regular compensation (including dependents' allowances) payable 
        to such individual under the State law for a week for total 
        unemployment during such individual's benefit year;
            (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 supplemental unemployment 
        compensation and the payment thereof, except where 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 supplemental 
        unemployment compensation payable to any individual for whom a 
        temporary supplemental unemployment compensation account is 
        established under section 703 shall not exceed the amount 
        established in such account for such individual.

SEC. 703. TEMPORARY SUPPLEMENTAL 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 supplemental unemployment compensation, a 
temporary supplemental unemployment compensation account.
    (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 weekly benefit 
                amount.
            (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.
            (3) Rule of construction.--For purposes of any computation 
        under paragraph (1) (and any determination of amount under 
        section 702(f)(1)), the modification described in section 
        702(b)(2)(C) (relating to increased benefits) shall be deemed 
        to have been in effect with respect to the entirety of the 
        benefit year involved.

SEC. 704. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS TITLE.

    (a) General Rule.--There shall be paid to each State which has 
entered into an agreement under this title an amount equal to--
            (1) 100 percent of any regular compensation made payable to 
        individuals by such State by virtue of the modifications which 
        are described in section 702(b)(2) and deemed to be in effect 
        with respect to such State pursuant to section 702(b)(1)(A);
            (2) 100 percent of any regular compensation--
                    (A) which is paid to individuals by such State by 
                reason of the fact that its State law contains 
                provisions comparable to the modifications described in 
                subparagraphs (A) and (B) of section 702(b)(2); but 
                only
                    (B) to the extent that those amounts would, if such 
                amounts were instead payable by virtue of the State 
                law's being deemed to be so modified pursuant to 
                section 702(b)(1)(A), have been reimbursable under 
                paragraph (1); and
            (3) 100 percent of the temporary supplemental unemployment 
        compensation paid to individuals by the State pursuant to such 
        agreement.
    (b) Determination of Amount.--Sums under subsection (a) 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.
    (c) Administrative Expenses, Etc.--There is hereby appropriated out 
of the employment security administration account of the Unemployment 
Trust Fund (as established by section 901(a) of the Social Security Act 
(42 U.S.C. 1101(a))) $500,000,000 to reimburse States for the costs of 
the administration of agreements under this title (including any 
improvements in technology in connection therewith) and to provide 
reemployment services to unemployment compensation claimants in States 
having agreements under this title. Each State's share of the amount 
appropriated by the preceding sentence shall be determined by the 
Secretary according to the factors described in section 302(a) of the 
Social Security Act (42 U.S.C. 501(a)) and certified by the Secretary 
to the Secretary of the Treasury.

SEC. 705. 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))), and the Federal unemployment account (as 
established by section 904(g) of such Act (42 U.S.C. 1104(g))), of the 
Unemployment Trust Fund (as established by section 904(a) of such Act 
(42 U.S.C. 1104(a))) shall be used, in accordance with subsection (b), 
for the making of payments (described in section 704(a)) 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 
described in section 704(a) which are 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 (or, to the extent 
that there are insufficient funds in that account, from the Federal 
unemployment account, as so established) to the account of such State 
in the Unemployment Trust Fund (as so established).

SEC. 706. 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 
any regular compensation or temporary supplemental unemployment 
compensation under this title to which he was not entitled, such 
individual--
            (1) shall be ineligible for any further benefits 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 any 
regular compensation or temporary supplemental unemployment 
compensation under this title to which such individuals were not 
entitled, the State shall require such individuals to repay those 
benefits to the State agency, except that the State agency may waive 
such repayment if it determines that--
            (1) the payment of such benefits 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 regular 
        compensation or temporary supplemental 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 regular compensation or 
        temporary supplemental unemployment compensation to which such 
        individuals 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. 707. DEFINITIONS.

    For purposes of this title:
            (1) In general.--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, 
        subject to paragraph (2).
            (2) State law and regular compensation.--In the case of a 
        State entering into an agreement under this title--
                    (A) ``State law'' shall be considered to refer to 
                the State law of such State, applied in conformance 
                with the modifications described in section 702(b)(2), 
                subject to section 702(c); and
                    (B) ``regular compensation'' shall be considered to 
                refer to such compensation, determined under its State 
                law (applied in the manner described in subparagraph 
                (A));
        except as otherwise provided or where the context clearly 
        indicates otherwise.

SEC. 708. APPLICABILITY.

    (a) In General.--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.
    (b) Specific Rules.--
            (1) In general.--Under such an agreement, the following 
        rules shall apply:
                    (A) Alternative base periods.--The modification 
                described in section 702(b)(2)(A) (relating to 
                alternative base periods) shall not apply except in the 
                case of initial claims filed on or after the first day 
                of the week that includes September 11, 2001.
                    (B) Part-time employment and increased benefits.--
                The modifications described in subparagraphs (B) and 
                (C) of section 702(b)(2) (relating to part-time 
                employment and increased benefits, respectively) shall 
                apply to weeks of unemployment described in subsection 
                (a), regardless of the date on which an individual's 
                initial claim for benefits is filed.
                    (C) Eligibility for tsuc.--The payments described 
                in section 702(b)(1)(B) (relating to temporary 
                supplemental unemployment compensation) shall not apply 
                except in the case of individuals exhausting their 
                rights to regular compensation (as described in clause 
                (i) of such section) on or after the first day of the 
                week that includes September 11, 2001.
            (2) Reapplication process.--
                    (A) Alternative base periods.--In the case of an 
                individual who filed an initial claim for regular 
                compensation on or after the first day of the week that 
                includes September 11, 2001, and before the date that 
                the State entered into an agreement under subsection 
                (a)(1) that was denied as a result of the application 
                of the base period that applied under the State law 
                prior to the date on which the State entered into the 
                such agreement, such individual--
                            (i) may refile a claim for regular 
                        compensation based on the modification 
                        described in section 702(b)(2)(A) (relating to 
                        alternative base periods) on or after the date 
                        on which the State enters into such agreement 
                        and before the date on which such agreement 
                        terminates; and
                            (ii) if eligible, shall be entitled to such 
                        compensation only for weeks of unemployment 
                        described in subsection (a) beginning on or 
                        after the date on which the individual files 
                        such claim.
                    (B) Part-time employment.--In the case of an 
                individual who before the date that the State entered 
                into an agreement under subsection (a)(1) was denied 
                regular compensation under the State law's provisions 
                relating to availability for work, active search for 
                work, or refusal to accept work, solely by virtue of 
                the fact that such individual is seeking, or available 
                for, only part-time (and not full-time) work, such 
                individual--
                    (i) may refile a claim for regular compensation 
                based on the modification described in section 
                702(b)(2)(B) (relating to part-time employment) on or 
                after the date on which the State enters into the 
                agreement under subsection (a)(1) and before the date 
                on which such agreement terminates; and
                    (ii) if eligible, shall be entitled to such 
                compensation only for weeks of unemployment described 
                in subsection (a) beginning on or after the date on 
                which the individual files such claim.
            (3) No retroactive payments for weeks prior to agreement.--
        No amounts shall be payable to an individual under an agreement 
        entered into under this title for any week of unemployment 
        prior to the week beginning after the date on which such 
        agreement is entered into.

              TITLE VIII--EMERGENCY AGRICULTURE ASSISTANCE

                    Subtitle A--Crop Loss Assistance

SEC. 801. CROP LOSS ASSISTANCE.

    (a) In General.--The Secretary of Agriculture (referred to in this 
title as the ``Secretary'') shall use $1,800,000,000 of funds of the 
Commodity Credit Corporation to make emergency financial assistance 
available to producers on a farm that have incurred qualifying losses 
for the 2001 crop.
    (b) Administration.--The Secretary shall make assistance available 
under this section in the same manner as provided under section 815 of 
the Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act, 2001 (Public Law 105-277; 114 
Stat. 1549A-55), including using the same loss thresholds for the 
quantity and economic losses as were used in administering that 
section.
    (c) Use of Funds for Cash Payments.--The Secretary may use funds 
made available under this section to make, in a manner consistent with 
this section, cash payments not for crop disasters, but for income loss 
to carry out the purposes of this section.

SEC. 802. LIVESTOCK ASSISTANCE PROGRAM.

    (a) In General.--The Secretary shall use $500,000,000 of the funds 
of the Commodity Credit Corporation to make and administer payments for 
livestock losses to producers for 2001 losses in a county that has 
received an emergency designation by the President or the Secretary 
after January 1, 2001.
    (b) Administration.--The Secretary shall make assistance available 
under this section in the same manner as provided under section 806 of 
the Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act, 2001 (Public Law 105-277; 114 
Stat. 1549A-51).

SEC. 803. COMMODITY PURCHASES.

    (a) In General.--The Secretary shall use $220,000,000 of funds of 
the Commodity Credit Corporation to purchase agricultural commodities, 
especially agricultural commodities that have experienced low prices 
during the 2001 crop year, as determined by the Secretary.
    (b) Geographic Diversity.--The Secretary is encouraged to purchase 
agricultural commodities under this section in a manner that reflects 
the geographic diversity of agricultural production in the United 
States, particularly agricultural production in the Northeast and Mid-
Atlantic States.
    (c) Other Purchases.--The Secretary shall ensure that purchases of 
agricultural commodities under this section are in addition to 
purchases by the Secretary under any other law.
    (d) Transportation and Distribution Costs.--The Secretary may use 
not more than $20,000,000 of the funds made available under subsection 
(a) to provide assistance to States to cover costs incurred by the 
States in transporting and distributing agricultural commodities 
purchased under this section.
    (e) Purchases for School Nutrition Programs.--The Secretary shall 
use not less than $55,000,000 of the funds made available under 
subsection (a) to purchase agricultural commodities of the type 
distributed under section 6(a) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1755(a)) for distribution to schools and 
service institutions in accordance with section 6(a) of that Act.

                     Subtitle B--Rural Development

SEC. 811. RURAL COMMUNITY FACILITIES AND UTILITIES.

    (a) Funding.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture--
                    (A) $130,100,000 for the cost of water or waste 
                disposal direct loans under section 306(a)(1) of the 
                Consolidated Farm and Rural Development Act (7 U.S.C. 
                1926(a)(1));
                    (B) $1,074,798,000 for water or waste disposal 
                grants under section 306(a)(2) of that Act;
                    (C) $8,362,000 for the cost of community facility 
                direct loans under section 306(a)(1) of that Act; and
                    (D) $60,000,000 for community facility grants under 
                paragraph (19), (20), or (21) of section 306(a)(1) of 
                that Act.
            (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use in accordance 
        with paragraph (1) the funds transferred under paragraph (1), 
        without further appropriation.
            (3) Availability of funds.--Funds transferred under 
        paragraph (1) shall remain available until expended.
            (4) Applicability of other laws.--For the purposes of the 
        Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.), this 
        section shall be treated as if enacted in an Act of 
        appropriation.
            (5) Appropriated amounts.--Funds made available under this 
        subsection shall be available to the Secretary--
                    (A) to provide funds for pending applications for 
                loans, loan guarantees, and grants described in 
                paragraph (1); and
                    (B) only to the extent that funds for the loans, 
                loan guarantees, and grants appropriated in the annual 
                appropriations Act for fiscal year 2002 have been 
                exhausted.
    (b) Community Facility Guaranteed Loans.--The Secretary may 
guarantee an additional $128,000,000 for community facility guaranteed 
loans under section 306(a)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(1)).

SEC. 812. RURAL TELECOMMUNICATIONS LOANS.

    (a) In General.--Not later than 30 days after the date of enactment 
of this Act, out of any funds in the Treasury not otherwise 
appropriated, the Secretary of the Treasury shall transfer to the 
Secretary of Agriculture to make insured cost of money rural 
telecommunications loans under sections 305 and 306 of the Rural 
Electrification Act of 1936 (7 U.S.C. 935, 936) $40,000,000, to remain 
available until expended.
    (b) Receipt and Acceptance.--The Secretary shall be entitled to 
receive, shall accept, and shall use to carry out this section the 
funds transferred under subsection (a), without further appropriation.
    (c) Applicability of Other Laws.--For the purposes of the Federal 
Credit Reform Act of 1990 (2 U.S.C. 661a et seq.), this section shall 
be treated as if enacted in an Act of appropriation.

SEC. 813. TELEMEDICINE AND DISTANCE LEARNING SERVICES.

    (a) In General.--The Secretary may make additional loans and grants 
for the broadband pilot program and for telemedicine and distance 
learning services under chapter 1 of subtitle D of title XXIII of the 
Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa 
et seq.).
    (b) Amount of Loans.--The Secretary shall make loans under this 
section in an amount not to exceed $400,000,000.
    (c) Funding.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture for the cost of loans 
        and grants under this section $5,000,000, to remain available 
        until expended.
            (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
            (3) Applicability of other laws.--For the purposes of the 
        Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.), this 
        subsection shall be treated as if enacted in an Act of 
        appropriation.

SEC. 814. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    In addition to funds otherwise available, the Secretary shall use 
$1,400,000,000 of funds of the Commodity Credit Corporation to carry 
out the environmental quality incentives program established under 
chapter 4 of subtitle D of title XII of the Food Security Act of 1985 
(16 U.S.C. 3839aa et seq.), including technical assistance under the 
program.

SEC. 815. FARMLAND PROTECTION PROGRAM.

    In addition to funds otherwise available, the Secretary shall use 
$150,000,000 of funds of the Commodity Credit Corporation to carry out 
the farmland protection program established under section 388 of the 
Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 
note; Public Law 104-127).

                       Subtitle C--Administration

SEC. 821. COMMODITY CREDIT CORPORATION.

    The Secretary shall use the funds, facilities, and authorities of 
the Commodity Credit Corporation to carry out subtitle A.

SEC. 822. ADMINISTRATIVE EXPENSES.

    (a) In General.--In addition to funds otherwise available, not 
later than 30 days after the date of enactment of this Act, out of any 
funds in the Treasury not otherwise appropriated, the Secretary of the 
Treasury shall transfer to the Secretary of Agriculture to pay the 
salaries and expenses of the Department of Agriculture in carrying out 
this title $104,500,000, to remain available until expended.
    (b) Receipt and Acceptance.--The Secretary shall be entitled to 
receive, shall accept, and shall use to carry out this section the 
funds transferred under subsection (a), without further appropriation.

SEC. 823. REGULATIONS.

    (a) In General.--The Secretary may promulgate such regulations as 
are necessary to implement this title.
    (b) Procedure.--The promulgation of the regulations and 
administration of this subtitle shall be made without regard to--
            (1) the notice and comment provisions of section 553 of 
        title 5, United States Code;
            (2) the Statement of Policy of the Secretary of Agriculture 
        effective July 24, 1971 (36 Fed. Reg. 13804), relating to 
        notices of proposed rulemaking and public participation in 
        rulemaking; and
            (3) chapter 35 of title 44, United States Code (commonly 
        known as the ``Paperwork Reduction Act'').
    (c) Congressional Review of Agency Rulemaking.--In carrying out 
this section, the Secretary shall use the authority provided under 
section 808 of title 5, United States Code.

                    TITLE IX--ADDITIONAL PROVISIONS

SEC. 901. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 (relating to 
credits against tax) is amended by adding at the end the following new 
subpart:

``Subpart H--Nonrefundable Credit for Holders of Qualified Amtrak Bonds

                              ``Sec. 54. Credit to holders of qualified 
                                        Amtrak bonds.

``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified Amtrak bond on a credit allowance date of such bond which 
occurs during the taxable year, there shall be allowed as a credit 
against the tax imposed by this chapter for such taxable year an amount 
equal to the sum of the credits determined under subsection (b) with 
respect to credit allowance dates during such year on which the 
taxpayer holds such bond.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a qualified Amtrak bond is 25 percent of the annual credit 
        determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any qualified Amtrak bond is the product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (2), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of sale of the issue) on outstanding long-term corporate 
        debt obligations (determined in such manner as the Secretary 
        prescribes).
            ``(4) Credit allowance date.--For purposes of this section, 
        the term `credit allowance date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
            ``(5) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
        determined based on the portion of the 3-month period during 
        which the bond is outstanding. A similar rule shall apply when 
        the bond is redeemed.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than this subpart and subpart C).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(e) Qualified Amtrak Bond.--For purposes of this part, the term 
`qualified Amtrak bond' means any bond issued as part of an issue if--
            ``(1) 95 percent or more of the proceeds from the sale of 
        such issue are to be used for expenditures incurred after the 
        date of the enactment of this section for any qualified 
        project,
            ``(2) the bond is issued by the National Railroad Passenger 
        Corporation, is in registered form, and meets the bond 
        limitation requirements under subsection (f),
            ``(3) the issuer designates such bond for purposes of this 
        section,
            ``(4) the issuer certifies that it meets the State 
        contribution requirement of subsection (k) with respect to such 
        project, as in effect on the date of issuance,
            ``(5) the issuer certifies that it has obtained the written 
        approval of the Secretary of Transportation for such project in 
        accordance with subsection (l),
            ``(6) the term of each bond which is part of such issue 
        does not exceed 20 years,
            ``(7) the payment of principal with respect to such bond is 
        the obligation of the National Railroad Passenger Corporation, 
        and
            ``(8) the issue meets the requirements of subsection (g) 
        (relating to arbitrage).
    ``(f) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a qualified Amtrak 
        bond limitation for each calendar year. Such limitation is--
                    ``(A) for 2002--
                            ``(i) with respect to qualified projects 
                        described in subparagraphs (A), (B), and (C) of 
                        subsection (j)(1), $7,000,000,000, and
                            ``(ii) with respect to the qualified 
                        project described in subsection (j)(1)(D), 
                        $2,000,000,000, and
                    ``(B) except as provided in paragraph (4), zero 
                thereafter.
            ``(2) Limits on bonds for northeast rail corridor and 
        individual states.--
                    ``(A) Northeast rail corridor.--Not more than 
                $2,000,000,000 of the limitation under paragraph (1) 
                may be designated for qualified projects on the 
                northeast rail corridor between Washington, D.C., and 
                Boston, Massachusetts.
                    ``(B) Individual states.--Not more than 
                $2,000,000,000 of the limitation under paragraph (1) 
                may be designated for any individual State. The dollar 
                limitation under this subparagraph is in addition to 
                the dollar limitation for the qualified projects 
                described in subparagraph (A).
            ``(3) Set aside for bonds for non-federally designated 
        high-speed rail corridor projects.--Not less than 15 percent of 
        the limitation under paragraph (1) shall be designated for 
        qualified projects described in subsection (j)(1)(C).
            ``(4) Carryover of unused limitation.--If for any calendar 
        year--
                    ``(A) the qualified Amtrak limitation amount, 
                exceeds
                    ``(B) the amount of bonds issued during such year 
                which are designated under subsection (e)(3),
        the qualified Amtrak limitation amount for the following 
        calendar year shall be increased by the amount of such excess.
Any carryforward of a qualified Amtrak limitation amount may be carried 
only to calendar year 2003 or 2004.
    ``(g) Special Rules Relating to Arbitrage.--
            ``(1) In general.--Subject to paragraph (2), an issue shall 
        be treated as meeting the requirements of this subsection if as 
        of the date of issuance, the issuer reasonably expects--
                    ``(A) to spend at least 95 percent of the proceeds 
                from the sale of the issue for 1 or more qualified 
                projects within the 3-year period beginning on such 
                date,
                    ``(B) to incur a binding commitment with a third 
                party to spend at least 10 percent of the proceeds from 
                the sale of the issue, or to commence construction, 
                with respect to such projects within the 6-month period 
                beginning on such date, and
                    ``(C) to proceed with due diligence to complete 
                such projects and to spend the proceeds from the sale 
                of the issue.
            ``(2) Rules regarding continuing compliance after 3-year 
        determination.--If at least 95 percent of the proceeds from the 
        sale of the issue is not expended for 1 or more qualified 
        projects within the 3-year period beginning on the date of 
        issuance, but the requirements of paragraph (1) are otherwise 
        met, an issue shall be treated as continuing to meet the 
        requirements of this subsection if either--
                    ``(A) the issuer uses all unspent proceeds from the 
                sale of the issue to redeem bonds of the issue within 
                90 days after the end of such 3-year period, or
                    ``(B) the following requirements are met:
                            ``(i) The issuer spends at least 75 percent 
                        of the proceeds from the sale of the issue for 
                        1 or more qualified projects within the 3-year 
                        period beginning on the date of issuance.
                            ``(ii) Either--
                                    ``(I) the issuer spends at least 95 
                                percent of the proceeds from the sale 
                                of the issue for 1 or more qualified 
                                projects within the 4-year period 
                                beginning on the date of issuance, or
                                    ``(II) the issuer pays to the 
                                Federal Government any earnings on the 
                                proceeds from the sale of the issue 
                                that accrue after the end of the 3-year 
                                period beginning on the date of 
                                issuance and uses all unspent proceeds 
                                from the sale of the issue to redeem 
                                bonds of the issue within 90 days after 
                                the end of the 4-year period beginning 
                                on the date of issuance.
    ``(h) Recapture of Portion of Credit Where Cessation of 
Compliance.--
            ``(1) In general.--If any bond which when issued purported 
        to be a qualified Amtrak bond ceases to be such a qualified 
        bond, the issuer shall pay to the United States (at the time 
        required by the Secretary) an amount equal to the sum of--
                    ``(A) the aggregate of the credits allowable under 
                this section with respect to such bond (determined 
                without regard to subsection (c)) for taxable years 
                ending during the calendar year in which such cessation 
                occurs and the 2 preceding calendar years, and
                    ``(B) interest at the underpayment rate under 
                section 6621 on the amount determined under 
                subparagraph (A) for each calendar year for the period 
                beginning on the first day of such calendar year.
            ``(2) Failure to pay.--If the issuer fails to timely pay 
        the amount required by paragraph (1) with respect to such bond, 
        the tax imposed by this chapter on each holder of any such bond 
        which is part of such issue shall be increased (for the taxable 
        year of the holder in which such cessation occurs) by the 
        aggregate decrease in the credits allowed under this section to 
        such holder for taxable years beginning in such 3 calendar 
        years which would have resulted solely from denying any credit 
        under this section with respect to such issue for such taxable 
        years.
            ``(3) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (2) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under paragraph (2) shall not be treated as a tax 
                imposed by this chapter for purposes of determining--
                            ``(i) the amount of any credit allowable 
                        under this part, or
                            ``(ii) the amount of the tax imposed by 
                        section 55.
    ``(i) Trust Account.--
            ``(1) In general.--The following amounts shall be held in a 
        trust account by a trustee independent of the National Railroad 
        Passenger Corporation:
                    ``(A) The proceeds from the sale of all bonds 
                designated for purposes of this section.
                    ``(B) The amount of any matching contributions with 
                respect to such bonds.
                    ``(C) The investment earnings on proceeds from the 
                sale of such bonds.
                    ``(D) Any earnings on any amounts described in 
                subparagraph (A), (B), or (C).
            ``(2) Use of funds.--Amounts in the trust account may be 
        used only to pay costs of qualified projects and redeem 
        qualified Amtrak bonds, except that amounts withdrawn from the 
        trust account to pay costs of qualified projects may not exceed 
        the aggregate proceeds from the sale of all qualified Amtrak 
        bonds issued under this section.
            ``(3) Use of remaining funds in trust account.--Upon the 
        redemption of all qualified Amtrak bonds issued under this 
        section, any remaining amounts in the trust account described 
        in paragraph (1) shall be available to the issuer for any 
        qualified project.
    ``(j) Qualified Project.--For purposes of this section--
            ``(1) In general.--The term `qualified project' means--
                    ``(A) the acquisition, financing, or refinancing of 
                equipment, rolling stock, and other capital 
                improvements (including the introduction of new high-
                speed technologies such as magnetic levitation 
                systems), including track or signal improvements or the 
                elimination of grade crossings, for the northeast rail 
                corridor between Washington, D.C., and Boston, 
                Massachusetts,
                    ``(B) the acquisition, financing, or refinancing of 
                equipment, rolling stock, and other capital 
                improvements (including the introduction of new high-
                speed technologies such as magnetic levitation 
                systems), including development of intermodal 
                facilities, track or signal improvements, or the 
                elimination of grade crossings, for the improvement of 
                train speeds or safety (or both) on the high-speed rail 
                corridors designated under section 104(d)(2) of title 
                23, United States Code, as in effect on the date of the 
                enactment of this section,
                    ``(C) the acquisition, financing, or refinancing of 
                equipment, rolling stock, and other capital 
                improvements, including station rehabilitation or 
                construction, development of intermodal facilities, 
                track or signal improvements, or the elimination of 
                grade crossings, for the improvement of train speeds or 
                safety (or both) for other intercity passenger rail 
                corridors and for the Alaska Railroad, and
                    ``(D) construction, installation of facilities, 
                performance of railroad force account work, and 
                environmental impact studies that facilitate and 
                maximize intercity and regional rail system capacity 
                and connectivity intended to benefit all users, 
                including the National Passenger Rail Corporation, 
                related to the construction of the Trans Hudson Tunnel, 
                an additional railroad passenger tunnel connecting 
                Newark, New Jersey to the City of New York, New York.
            ``(2) Refinancing rules.--For purposes of paragraph (1), a 
        refinancing shall constitute a qualified project only if the 
        indebtedness being refinanced (including any obligation 
        directly or indirectly refinanced by such indebtedness) was 
        originally incurred by the issuer--
                    ``(A) after the date of the enactment of this 
                section,
                    ``(B) for a term of not more than 3 years,
                    ``(C) to finance or acquire capital improvements 
                described in paragraph (1), and
                    ``(D) in anticipation of being refinanced with 
                proceeds of a qualified Amtrak bond.
    ``(k) State Contribution Requirements.--
            ``(1) In general.--For purposes of subsection (e)(4), the 
        State contribution requirement of this subsection is met with 
        respect to any qualified project if the National Railroad 
        Passenger Corporation has received from 1 or more States, not 
        later than the date of issuance of the bond, matching 
        contributions of not less than 20 percent of the cost of the 
        qualified project.
            ``(2) No state contribution requirement for certain 
        qualified projects.--The State contribution requirement of this 
        subsection is zero with respect to any project described in 
        subsection (j)(1)(C) for the Alaska Railroad.
            ``(3) State matching contributions may not include federal 
        funds.--For purposes of this subsection, State matching 
        contributions shall not be derived, directly or indirectly, 
        from Federal funds, including any transfers from the Highway 
        Trust Fund under section 9503.
    ``(l) Department of Transportation Approval for Qualified 
Projects.--
            ``(1) In general.--The written approval of a qualified 
        project by the Secretary of Transportation required for 
        purposes of subsection (e)(5) shall include--
                    ``(A) the finding by the Inspector General of the 
                Department of Transportation described in paragraph 
                (2),
                    ``(B) the certification by the Secretary of 
                Transportation described in paragraph (3), and
                    ``(C) the agreement by the National Railroad 
                Passenger Corporation described in paragraph (4).
            ``(2) Finding by inspector general.--For purposes of 
        paragraph (1), the finding described in this paragraph is a 
        finding by the Inspector General of the Department of 
        Transportation that there is a reasonable likelihood that the 
        proposed project will result in a positive financial 
        contribution to the National Railroad Passenger Corporation and 
        that the investment evaluation process includes consideration 
        of a return on investment, leveraging of funds (including State 
        capital and operating contributions), cost effectiveness, 
        safety improvement, mobility improvement, and feasibility.
            ``(3) Certification.--For purposes of paragraph (1), the 
        certification described in this paragraph is a certification by 
        the Secretary of Transportation that the issuer of the 
        qualified Amtrak bond--
                    ``(A) except with respect to projects described in 
                subsection (j)(1)(C), has entered into a written 
                agreement with the owners of rail properties which are 
                to be improved by the project to be funded by the 
                qualified Amtrak bond, as to the scope and estimated 
                cost of such project and the impact on rail freight 
                capacity, and
                    ``(B) has met the State contribution requirements 
                described in subsection (k).
        The National Railroad Passenger Corporation shall not exercise 
        its rights under section 24308(a)(2) of title 49, United States 
        Code, to resolve disputes with respect to a project to be 
        funded by a qualified Amtrak bond, or with respect to the cost 
        of such a project, unless the project is intended to result in 
        railroad speeds of 79 miles per hour or less.
            ``(4) Agreement by amtrak to issue additional bonds for 
        projects of other carriers.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the agreement described in this paragraph is an 
                agreement by the National Railroad Passenger 
                Corporation with the Secretary of Transportation to 
                issue bonds which meet the requirements of this section 
                for use in financing projects described in subparagraph 
                (B).
                    ``(B) Projects covered.--For purposes of 
                subparagraph (A), the projects described in this 
                subparagraph are any project described in subsection 
                (j)(1)(B) or (j)(1)(C) for an intercity rail passenger 
                carrier other than the National Railroad Passenger 
                Corporation or for the Alaska Railroad.
                    ``(C) Responsibility of intercity rail passenger 
                carrier.--Any project financed by bonds referred to in 
                subparagraph (A) shall be carried out by the intercity 
                rail passenger carrier other than the National Railroad 
                Passenger Corporation, through a contract entered into 
                by the National Railroad Passenger Corporation with 
                such carrier.
                    ``(D) Intercity rail passenger carrier defined.--
                For purposes of this paragraph, the term `intercity 
                rail passenger carrier' means any rail carrier (as 
                defined in section 24102(7) of such title 49, as in 
                effect on the date of the enactment of this section) 
                which is part of the interstate system of rail 
                transportation and which provides intercity rail 
                passenger transportation (as defined in section 
                24102(5) of such title 49 (as so in effect)).
            ``(5) Additional selection criteria.--In determining 
        projects to be approved under this subsection (other than 
        projects for the Alaska Railroad), or to be included in an 
        agreement under paragraph (4), the Secretary of 
        Transportation--
                    ``(A) shall base such approval on--
                            ``(i) the results of alternatives analysis 
                        and preliminary engineering, and
                            ``(ii) a comprehensive review of mobility 
                        improvements, environmental benefits, cost 
                        effectiveness, and operating efficiencies, and
                    ``(B) shall give preference to--
                            ``(i) projects supported by evidence of 
                        stable and dependable financing sources to 
                        construct, maintain, and operate the system or 
                        extension,
                            ``(ii) projects expected to have a 
                        significant impact on air traffic congestion,
                            ``(iii) projects expected to also improve 
                        commuter rail operations,
                            ``(iv) projects that anticipate fares 
                        designed to recover costs and generate a return 
                        on investment, and
                            ``(v) projects that promote regional 
                        balance in infrastructure investment and the 
                        national interest in ensuring the development 
                        of a nationwide high-speed rail transportation 
                        network.
    ``(m) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Treatment of changes in use.--For purposes of 
        subsection (e)(1), the proceeds from the sale of an issue shall 
        not be treated as used for a qualified project to the extent 
        that the issuer takes any action within its control which 
        causes such proceeds not to be used for a qualified project. 
        The Secretary shall specify remedial actions that may be taken 
        (including conditions to taking such remedial actions) to 
        prevent an action described in the preceding sentence from 
        causing a bond to fail to be a qualified Amtrak bond.
            ``(3) Partnership; s corporation; and other pass-thru 
        entities.--In the case of a partnership, trust, S corporation, 
        or other pass-thru entity, rules similar to the rules of 
        section 41(g) shall apply with respect to the credit allowable 
        under subsection (a).
            ``(4) Bonds held by regulated investment companies.--If any 
        qualified Amtrak bond is held by a regulated investment 
        company, the credit determined under subsection (a) shall be 
        allowed to shareholders of such company under procedures 
        prescribed by the Secretary.
            ``(5) Reporting.--Issuers of qualified Amtrak bonds shall 
        submit reports similar to the reports required under section 
        149(e).''.
    (b) Amendments to Other Code Sections.--
            (1) Reporting.--Subsection (d) of section 6049 (relating to 
        returns regarding payments of interest) is amended by adding at 
        the end the following new paragraph:
            ``(8) Reporting of credit on qualified amtrak bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 54(d) and such amounts shall 
                be treated as paid on the credit allowance date (as 
                defined in section 54(b)(4)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A), subsection 
                (b)(4) shall be applied without regard to subparagraphs 
                (A), (H), (I), (J), (K), and (L)(i) of such subsection.
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''.
            (2) Treatment for estimated tax purposes.--
                    (A) Individual.--Section 6654 (relating to failure 
                by individual to pay estimated income tax) is amended 
                by redesignating subsection (m) as subsection (n) and 
                by inserting after subsection (l) the following new 
                subsection:
    ``(m) Special Rule for Holders of Qualified Amtrak Bonds.--For 
purposes of this section, the credit allowed by section 54 to a 
taxpayer by reason of holding a qualified Amtrak bond on a credit 
allowance date shall be treated as if it were a payment of estimated 
tax made by the taxpayer on such date.''.
                    (B) Corporate.--Section 6655 (relating to failure 
                by corporation to pay estimated income tax) is amended 
                by adding at the end of subsection (g) the following 
                new paragraph:
            ``(5) Special rule for holders of qualified amtrak bonds.--
        For purposes of this section, the credit allowed by section 54 
        to a taxpayer by reason of holding a qualified Amtrak bond on a 
        credit allowance date shall be treated as if it were a payment 
        of estimated tax made by the taxpayer on such date.''.
            (3) Exclusion from gross income of contributions by Amtrak 
        to other rail carriers.--
                    (A) In general.--Section 118 (relating to 
                contributions to the capital of a corporation) is 
                amended by redesignating subsection (d) as subsection 
                (e) and by inserting after subsection (c) the following 
                new subsection:
    ``(d) Special Rule for Contributions by Amtrak to Other Rail 
Carriers.--For purposes of this section, the term `contribution to the 
capital of the taxpayer' includes any contribution by the National 
Railroad Passenger Corporation of personal or real property funded by 
the proceeds of qualified Amtrak bonds under section 54.''.
                    (B) Conforming amendment.--Subsection (b) of such 
                section 118 is amended by striking ``subsection (c)'' 
                and inserting ``subsections (c) and (d)''.
            (4) Protection of highway trust fund.--Section 9503 
        (relating to Highway Trust Fund) is amended by adding at the 
        end the following new subsection:
    ``(g) Special Rules Relating to National Railroad Passenger 
Corporation.--
            ``(1) In general.--Except as provided in subsection (c), as 
        in effect on the date of the enactment of this subsection, 
        amounts in the Highway Trust Fund may not be used, either 
        directly or indirectly through a State or local transit 
        authority, to provide funds to the National Railroad Passenger 
        Corporation for any purpose, including issuance of any 
        qualified Amtrak bond pursuant to section 54. The preceding 
        sentence may not be waived by any provision of law which is not 
        contained or referenced in this title, whether such provision 
        of law is a subsequently enacted provision or directly or 
        indirectly seeks to waive the application of such sentence.
            ``(2) Certification by the secretary.--The issuance of any 
        qualified Amtrak bonds by the National Railroad Passenger 
        Corporation pursuant to section 54 is conditioned on 
        certification by the Secretary, after consultation with the 
        Secretary of Transportation, within 30 days of a request by the 
        issuer, that with respect to funds of the Highway Trust Fund 
        described under paragraph (1), the issuer either--
                    ``(A) has not received such funds during calendar 
                years commencing with 2002 and ending before the 
                calendar year the bonds are issued, or
                    ``(B) has repaid to the Highway Trust Fund any such 
                funds which were received during such calendar years.
            ``(3) No retroactive effect.--Nothing in this subsection 
        shall adversely affect the entitlement of the holders of 
        qualified Amtrak bonds to the tax credit allowed pursuant to 
        section 54 or to repayment of principal upon maturity.''.
    (c) Clerical Amendments.--
            (1) The table of subparts for part IV of subchapter A of 
        chapter 1 is amended by adding at the end the following new 
        item:

                              ``Subpart H. Nonrefundable Credit for 
                                        Holders of Qualified Amtrak 
                                        Bonds.''.
            (2) Section 6401(b)(1) is amended by striking ``and G'' and 
        inserting ``G, and H''.
    (d) Annual Report by Treasury on Amtrak Trust Account.--The 
Secretary of the Treasury shall annually report to Congress as to 
whether the amount deposited in the trust account established by the 
National Railroad Passenger Corporation under section 54(i) of the 
Internal Revenue Code of 1986, as added by this section, is sufficient 
to fully repay at maturity the principal of any outstanding qualified 
Amtrak bonds issued pursuant to section 54 of such Code (as so added), 
together with amounts expected to be deposited into such account, as 
certified by the National Railroad Passenger Corporation in accordance 
with procedures prescribed by the Secretary of the Treasury.
    (e) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.
    (f) Multi-Year Capital Spending Plan and Oversight.--
            (1) Amtrak capital spending plan.--
                    (A) In general.--The National Railroad Passenger 
                Corporation shall annually submit to the President and 
                Congress a multi-year capital spending plan, as 
                approved by the Board of Directors of the Corporation.
                    (B) Contents of plan.--Such plan shall identify the 
                capital investment needs of the Corporation over a 
                period of not less than 5 years and the funding sources 
                available to finance such needs and shall prioritize 
                such needs according to corporate goals and strategies.
                    (C) Initial submission date.--The first plan shall 
                be submitted before the issuance of any qualified 
                Amtrak bonds by the National Railroad Passenger 
                Corporation pursuant to section 54 of the Internal 
                Revenue Code of 1986 (as added by this section).
            (2) Oversight of amtrak trust account and qualified 
        projects.--
                    (A) Trust account oversight.--The Secretary of the 
                Treasury shall annually report to Congress as to 
                whether the amount deposited in the trust account 
                established by the National Railroad Passenger 
                Corporation under section 54(i) of such Code (as so 
                added) is sufficient to fully repay at maturity the 
                principal of any outstanding qualified Amtrak bonds 
                issued pursuant to section 54 of such Code (as so 
                added), together with amounts expected to be deposited 
                into such account, as certified by the National 
                Railroad Passenger Corporation in accordance with 
                procedures prescribed by the Secretary of the Treasury.
                    (B) Project oversight.--The National Railroad 
                Passenger Corporation shall contract for an annual 
                independent assessment of the costs and benefits of the 
                qualified projects financed by such qualified Amtrak 
                bonds, including an assessment of the investment 
                evaluation process of the Corporation. The annual 
                assessment shall be included in the plan submitted 
                under paragraph (1).

SEC. 902. BROADBAND INTERNET ACCESS TAX CREDIT.

    (a) In General.--Subpart E of part IV of chapter 1 (relating to 
rules for computing investment credit) is amended by inserting after 
section 48 the following:

``SEC. 48A. BROADBAND CREDIT.

    ``(a) General Rule.--For purposes of section 46, the broadband 
credit for any taxable year is the sum of--
            ``(1) the current generation broadband credit, plus
            ``(2) the next generation broadband credit.
    ``(b) Current Generation Broadband Credit; Next Generation 
Broadband Credit.--For purposes of this section--
            ``(1) Current generation broadband credit.--The current 
        generation broadband credit for any taxable year is equal to 10 
        percent of the qualified expenditures incurred with respect to 
        qualified equipment providing current generation broadband 
        services to qualified subscribers and taken into account with 
        respect to such taxable year.
            ``(2) Next generation broadband credit.--The next 
        generation broadband credit for any taxable year is equal to 20 
        percent of the qualified expenditures incurred with respect to 
        qualified equipment providing next generation broadband 
        services to qualified subscribers and taken into account with 
        respect to such taxable year.
    ``(c) When Expenditures Taken Into Account.--For purposes of this 
section--
            ``(1) In general.--Qualified expenditures with respect to 
        qualified equipment shall be taken into account with respect to 
        the first taxable year in which--
                    ``(A) current generation broadband services are 
                provided through such equipment to qualified 
                subscribers, or
                    ``(B) next generation broadband services are 
                provided through such equipment to qualified 
                subscribers.
            ``(2) Limitation.--
                    ``(A) In general.--Qualified expenditures shall be 
                taken into account under paragraph (1) only with 
                respect to qualified equipment--
                            ``(i) the original use of which commences 
                        with the taxpayer, and
                            ``(ii) which is placed in service,
                after December 31, 2001.
                    ``(B) Leased equipment.--Except as provided in 
                regulations, rules similar to the rules of section 
                203(b)(3) of the Tax Reform Act of 1986 shall apply.
    ``(d) Special Allocation Rules.--
            ``(1) Current generation broadband services.--For purposes 
        of determining the current generation broadband credit under 
        subsection (a)(1) with respect to qualified equipment through 
        which current generation broadband services are provided, if 
        the qualified equipment is capable of serving both qualified 
        subscribers and other subscribers, the qualified expenditures 
        shall be multiplied by a fraction--
                    ``(A) the numerator of which is the sum of the 
                number of potential qualified subscribers within the 
                rural areas and the underserved areas which the 
                equipment is capable of serving with current generation 
                broadband services, and
                    ``(B) the denominator of which is the total 
                potential subscriber population of the area which the 
                equipment is capable of serving with current generation 
                broadband services.
            ``(2) Next generation broadband services.--For purposes of 
        determining the next generation broadband credit under 
        subsection (a)(2) with respect to qualified equipment through 
        which next generation broadband services are provided, if the 
        qualified equipment is capable of serving both qualified 
        subscribers and other subscribers, the qualified expenditures 
        shall be multiplied by a fraction--
                    ``(A) the numerator of which is the sum of--
                            ``(i) the number of potential qualified 
                        subscribers within the rural areas and 
                        underserved areas, plus
                            ``(ii) the number of potential qualified 
                        subscribers within the area consisting only of 
                        residential subscribers not described in clause 
                        (i),
                which the equipment is capable of serving with next 
                generation broadband services, and
                    ``(B) the denominator of which is the total 
                potential subscriber population of the area which the 
                equipment is capable of serving with next generation 
                broadband services.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Antenna.--The term `antenna' means any device used to 
        transmit or receive signals through the electromagnetic 
        spectrum, including satellite equipment.
            ``(2) Cable operator.--The term `cable operator' has the 
        meaning given such term by section 602(5) of the Communications 
        Act of 1934 (47 U.S.C. 522(5)).
            ``(3) Commercial mobile service carrier.--The term 
        `commercial mobile service carrier' means any person authorized 
        to provide commercial mobile radio service as defined in 
        section 20.3 of title 47, Code of Federal Regulations.
            ``(4) Current generation broadband service.--The term 
        `current generation broadband service' means the transmission 
        of signals at a rate of at least 1,000,000 bits per second to 
        the subscriber and at least 128,000 bits per second from the 
        subscriber.
            ``(5) Multiplexing or demultiplexing.--The term 
        `multiplexing' means the transmission of 2 or more signals over 
        a single channel, and the term `demultiplexing' means the 
        separation of 2 or more signals previously combined by 
        compatible multiplexing equipment.
            ``(6) Next generation broadband service.--The term `next 
        generation broadband service' means the transmission of signals 
        at a rate of at least 22,000,000 bits per second to the 
        subscriber and at least 5,000,000 bits per second from the 
        subscriber.
            ``(7) Nonresidential subscriber.--The term `nonresidential 
        subscriber' means a person who purchases broadband services 
        which are delivered to the permanent place of business of such 
        person.
            ``(8) Open video system operator.--The term `open video 
        system operator' means any person authorized to provide service 
        under section 653 of the Communications Act of 1934 (47 U.S.C. 
        573).
            ``(9) Other wireless carrier.--The term `other wireless 
        carrier' means any person (other than a telecommunications 
        carrier, commercial mobile service carrier, cable operator, 
        open video system operator, or satellite carrier) providing 
        current generation broadband services or next generation 
        broadband service to subscribers through the radio transmission 
        of energy.
            ``(10) Packet switching.--The term `packet switching' means 
        controlling or routing the path of a digitized transmission 
        signal which is assembled into packets or cells.
            ``(11) Provider.--The term `provider' means, with respect 
        to any qualified equipment--
                    ``(A) a cable operator,
                    ``(B) a commercial mobile service carrier,
                    ``(C) an open video system operator,
                    ``(D) a satellite carrier,
                    ``(E) a telecommunications carrier, or
                    ``(F) any other wireless carrier,
        providing current generation broadband services or next 
        generation broadband services to subscribers through such 
        qualified equipment.
            ``(12) Provision of services.--A provider shall be treated 
        as providing services to a subscriber if--
                    ``(A) a subscriber has been passed by the 
                provider's equipment and can be connected to such 
                equipment for a standard connection fee,
                    ``(B) the provider is physically able to deliver 
                current generation broadband services or next 
                generation broadband services, as applicable, to such 
                subscribers without making more than an insignificant 
                investment with respect to any such subscriber,
                    ``(C) the provider has made reasonable efforts to 
                make such subscribers aware of the availability of such 
                services,
                    ``(D) such services have been purchased by one or 
                more such subscribers, and
                    ``(E) such services are made available to such 
                subscribers at average prices comparable to those at 
                which the provider makes available similar services in 
                any areas in which the provider makes available such 
                services.
            ``(13) Qualified equipment.--
                    ``(A) In general.--The term `qualified equipment' 
                means equipment which provides current generation 
                broadband services or next generation broadband 
                services--
                            ``(i) at least a majority of the time 
                        during periods of maximum demand to each 
                        subscriber who is utilizing such services, and
                            ``(ii) in a manner substantially the same 
                        as such services are provided by the provider 
                        to subscribers through equipment with respect 
                        to which no credit is allowed under subsection 
                        (a)(1).
                    ``(B) Only certain investment taken into account.--
                Except as provided in subparagraph (C) or (D), 
                equipment shall be taken into account under 
                subparagraph (A) only to the extent it--
                            ``(i) extends from the last point of 
                        switching to the outside of the unit, building, 
                        dwelling, or office owned or leased by a 
                        subscriber in the case of a telecommunications 
                        carrier,
                            ``(ii) extends from the customer side of 
                        the mobile telephone switching office to a 
                        transmission/receive antenna (including such 
                        antenna) owned or leased by a subscriber in the 
                        case of a commercial mobile service carrier,
                            ``(iii) extends from the customer side of 
                        the headend to the outside of the unit, 
                        building, dwelling, or office owned or leased 
                        by a subscriber in the case of a cable operator 
                        or open video system operator, or
                            ``(iv) extends from a transmission/receive 
                        antenna (including such antenna) which 
                        transmits and receives signals to or from 
                        multiple subscribers to a transmission/receive 
                        antenna (including such antenna) on the outside 
                        of the unit, building, dwelling, or office 
                        owned or leased by a subscriber in the case of 
                        a satellite carrier or other wireless carrier, 
                        unless such other wireless carrier is also a 
                        telecommunications carrier.
                    ``(C) Packet switching equipment.--Packet switching 
                equipment, regardless of location, shall be taken into 
                account under subparagraph (A) only if it is deployed 
                in connection with equipment described in subparagraph 
                (B) and is uniquely designed to perform the function of 
                packet switching for current generation broadband 
                services or next generation broadband services, but 
                only if such packet switching is the last in a series 
                of such functions performed in the transmission of a 
                signal to a subscriber or the first in a series of such 
                functions performed in the transmission of a signal 
                from a subscriber.
                    ``(D) Multiplexing and demultiplexing equipment.--
                Multiplexing and demultiplexing equipment shall be 
                taken into account under subparagraph (A) only to the 
                extent it is deployed in connection with equipment 
                described in subparagraph (B) and is uniquely designed 
                to perform the function of multiplexing and 
                demultiplexing packets or cells of data and making 
                associated application adaptions, but only if such 
                multiplexing or demultiplexing equipment is located 
                between packet switching equipment described in 
                subparagraph (C) and the subscriber's premises.
            ``(14) Qualified expenditure.--
                    ``(A) In general.--The term `qualified expenditure' 
                means any amount--
                            ``(i) chargeable to capital account with 
                        respect to the purchase and installation of 
                        qualified equipment (including any upgrades 
                        thereto) for which depreciation is allowable 
                        under section 168, and
                            ``(ii) incurred after December 31, 2001, 
                        and before January 1, 2003.
                    ``(B) Certain satellite expenditures excluded.--
                Such term shall not include any expenditure with 
                respect to the launching of any satellite equipment.
            ``(15) Qualified subscriber.--The term `qualified 
        subscriber' means--
                    ``(A) with respect to the provision of current 
                generation broadband services--
                            ``(i) a nonresidential subscriber 
                        maintaining a permanent place of business in a 
                        rural area or underserved area, or
                            ``(ii) a residential subscriber residing in 
                        a dwelling located in a rural area or 
                        underserved area which is not a saturated 
                        market, and
                    ``(B) with respect to the provision of next 
                generation broadband services--
                            ``(i) a nonresidential subscriber 
                        maintaining a permanent place of business in a 
                        rural area or underserved area, or
                            ``(ii) a residential subscriber.
            ``(16) Residential subscriber.--The term `residential 
        subscriber' means an individual who purchases broadband 
        services which are delivered to such individual's dwelling.
            ``(17) Rural area.--The term `rural area' means any census 
        tract which--
                    ``(A) is not within 10 miles of any incorporated or 
                census designated place containing more than 25,000 
                people, and
                    ``(B) is not within a county or county equivalent 
                which has an overall population density of more than 
                500 people per square mile of land.
            ``(18) Rural subscriber.--The term `rural subscriber' means 
        a residential subscriber residing in a dwelling located in a 
        rural area or nonresidential subscriber maintaining a permanent 
        place of business located in a rural area.
            ``(19) Satellite carrier.--The term `satellite carrier' 
        means any person using the facilities of a satellite or 
        satellite service licensed by the Federal Communications 
        Commission and operating in the Fixed-Satellite Service under 
        part 25 of title 47 of the Code of Federal Regulations or the 
        Direct Broadcast Satellite Service under part 100 of title 47 
        of such Code to establish and operate a channel of 
        communications for distribution of signals, and owning or 
        leasing a capacity or service on a satellite in order to 
        provide such distribution.
            ``(20) Saturated market.--The term `saturated market' means 
        any census tract in which, as of the date of the enactment of 
        this section--
                    ``(A) current generation broadband services have 
                been provided by one or more providers to 85 percent or 
                more of the total number of potential residential 
                subscribers residing in dwellings located within such 
                census tract, and
                    ``(B) such services can be utilized--
                            ``(i) at least a majority of the time 
                        during periods of maximum demand by each such 
                        subscriber who is utilizing such services, and
                            ``(ii) in a manner substantially the same 
                        as such services are provided by the provider 
                        to subscribers through equipment with respect 
                        to which no credit is allowed under subsection 
                        (a)(1).
            ``(21) Subscriber.--The term `subscriber' means a person 
        who purchases current generation broadband services or next 
        generation broadband services.
            ``(22) Telecommunications carrier.--The term 
        `telecommunications carrier' has the meaning given such term by 
        section 3(44) of the Communications Act of 1934 (47 U.S.C. 
        153(44)), but--
                    ``(A) includes all members of an affiliated group 
                of which a telecommunications carrier is a member, and
                    ``(B) does not include a commercial mobile service 
                carrier.
            ``(23) Total potential subscriber population.--The term 
        `total potential subscriber population' means, with respect to 
        any area and based on the most recent census data, the total 
        number of potential residential subscribers residing in 
        dwellings located in such area and potential nonresidential 
        subscribers maintaining permanent places of business located in 
        such area.
            ``(24) Underserved area.--The term `underserved area' means 
        any census tract which is located in--
                    ``(A) an empowerment zone or enterprise community 
                designated under section 1391,
                    ``(B) the District of Columbia Enterprise Zone 
                established under section 1400,
                    ``(C) a renewal community designated under section 
                1400E, or
                    ``(D) a low-income community designated under 
                section 45D.
            ``(25) Underserved subscriber.--The term `underserved 
        subscriber' means a residential subscriber residing in a 
        dwelling located in an underserved area or nonresidential 
        subscriber maintaining a permanent place of business located in 
        an underserved area.
    ``(f) Designation of Census Tracts.--The Secretary shall, not later 
than 90 days after the date of the enactment of this section, designate 
and publish those census tracts meeting the criteria described in 
paragraphs (17), (20), and (24) of subsection (e). In making such 
designations, the Secretary shall consult with such other departments 
and agencies as the Secretary determines appropriate.''.
    (b) Credit To Be Part of Investment Credit.--Section 46 (relating 
to the amount of investment credit) is amended by striking ``and'' at 
the end of paragraph (2), by striking the period at the end of 
paragraph (3) and inserting ``, and'', and by adding at the end the 
following:
            ``(4) the broadband credit.''
    (c) Special Rule for Mutual or Cooperative Telephone Companies.--
Section 501(c)(12)(B) (relating to list of exempt organizations) is 
amended by striking ``or'' at the end of clause (iii), by striking the 
period at the end of clause (iv) and inserting ``, or'', and by adding 
at the end the following:
                            ``(v) from the sale of property subject to 
                        a lease described in section 48A(c)(2)(B), but 
                        only to the extent such income does not in any 
                        year exceed an amount equal to the credit for 
                        qualified expenditures which would be 
                        determined under section 48A for such year if 
                        the mutual or cooperative telephone company was 
                        not exempt from taxation and was treated as the 
                        owner of the property subject to such lease.''.
    (d) Conforming Amendment.--The table of sections for subpart E of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 48 the following:

``Sec. 48A. Broadband credit.''.
    (e) Regulatory Matters.--
            (1) Prohibition.--No Federal or State agency or 
        instrumentality shall adopt regulations or ratemaking 
        procedures that would have the effect of confiscating any 
        credit or portion thereof allowed under section 48A of the 
        Internal Revenue Code of 1986 (as added by this section) or 
        otherwise subverting the purpose of this section.
            (2) Treasury regulatory authority.--It is the intent of 
        Congress in providing the broadband credit under section 48A of 
        the Internal Revenue Code of 1986 (as added by this section) to 
        provide incentives for the purchase, installation, and 
        connection of equipment and facilities offering expanded 
        broadband access to the Internet for users in certain low 
        income and rural areas of the United States, as well as to 
        residential users nationwide, in a manner that maintains 
        competitive neutrality among the various classes of providers 
        of broadband services. Accordingly, the Secretary of the 
        Treasury shall prescribe such regulations as may be necessary 
        or appropriate to carry out the purposes of section 48A of such 
        Code, including--
                    (A) regulations to determine how and when a 
                taxpayer that incurs qualified expenditures satisfies 
                the requirements of section 48A of such Code to provide 
                broadband services, and
                    (B) regulations describing the information, 
                records, and data taxpayers are required to provide the 
                Secretary to substantiate compliance with the 
                requirements of section 48A of such Code.
        Until the Secretary prescribes such regulations, taxpayers may 
        base such determinations on any reasonable method that is 
        consistent with the purposes of section 48A of such Code.
    (f) Effective Date.--The amendments made by this section shall 
apply to expenditures incurred after December 31, 2001, and before 
January 1, 2003.

SEC. 903. CITRUS TREE CANKER RELIEF.

    (a) Expansion of Period Within Which Converted Citrus Tree Property 
Must Be Replaced.--
            (1) In general.--Section 1033 (relating to period within 
        which property must be replaced) is amended by redesignating 
        subsection (k) as subsection (l) and by inserting after 
        subsection (j) the following new subsection:
    ``(k) Commercial Trees Destroyed Because of Citrus Tree Canker.--In 
the case of commercial citrus trees which are compulsorily or 
involuntarily converted under a public order as a result of the citrus 
tree canker, clause (i) of subsection (a)(2)(B) shall be applied as if 
such clause reads: `4 years after the close of the taxable year in 
which a State or Federal plant health authority determines that the 
land on which such trees grew is free from the bacteria that causes 
citrus tree canker'.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to taxable years beginning before, on, or after the 
        date of the enactment of this Act.
    (b) 10-Year Ratable Income Inclusion for Citrus Canker Tree 
Payments.--
            (1) In general.--Part I of subchapter Q of chapter 1 
        (relating to income averaging) is amended by inserting after 
        section 1301 the following new section:

``SEC. 1302. 10-YEAR RATABLE INCOME INCLUSION FOR CITRUS CANKER TREE 
              PAYMENTS.

    ``(a) In General.--At the election of the taxpayer, any amount 
taken into account as income or gain by reason of receiving a citrus 
canker tree payment shall be included in the income of the taxpayer 
ratably over the 10-year period beginning with the taxable year in 
which the payment is received or accrued by the taxpayer. Any election 
under the preceding sentence shall be irrevocable.
    ``(b) Citrus Canker Tree Payment.--For purposes of subsection (a), 
the term `citrus canker tree payment' means a payment made to an owner 
of a commercial citrus grove to recover income that was lost as a 
result of the removal of commercial citrus trees to control canker 
under the amendments to the citrus canker regulations (7 C.F.R. 301) 
made by the final rule published in the Federal Register by the 
Secretary of Agriculture on June 18, 2001 (66 Fed. Reg. 32713, Docket 
No. 00-37-4).''.
            (2) Clerical amendment.--The table of sections for part I 
        of subchapter Q of chapter 1 is amended by inserting after the 
        item relating to section 1301 the following new item:

        ``Sec. 1302. 10-year ratable income inclusion for citrus canker 
                            tree payments.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to payments made before, on, or after the date of 
        the enactment of this Act.

SEC. 904. ALLOWANCE OF ELECTRONIC 1099S.

    Except as otherwise provided by the Secretary of the Treasury, 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 and before January 1, 2003, may electronically furnish such 
statement 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. 905. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR AGRICULTURAL 
              AERIAL APPLICATORS.

    (a) No Waiver by Farm Owner, Tenant, or Operator Necessary.--
Subparagraph (B) of section 6420(c)(4) (relating to certain farming use 
other than by owner, etc.) is amended to read as follows:
                    ``(B) if the person so using the gasoline is an 
                aerial or other applicator of fertilizers or other 
                substances and is the ultimate purchaser of the 
                gasoline, then subparagraph (A) of this paragraph shall 
                not apply and the aerial or other applicator shall be 
                treated as having used such gasoline on a farm for 
                farming purposes.''.
    (b) Exemption Includes Fuel Used Between Airfield and Farm.--
Section 6420(c)(4), as amended by subsection (a), is amended by adding 
at the end the following new flush sentence:
        ``For purposes of this paragraph, in the case of an aerial 
        applicator, gasoline shall be treated as used on a farm for 
        farming purposes if the gasoline is used for the direct flight 
        between the airfield and 1 or more farms.''.
    (c) Exemption from Tax on Air Transportation of Persons for 
Forestry Purposes Extended to Fixed-Wing Aircraft.--Subsection (f) of 
section 4261 (relating to tax on air transportation of persons) is 
amended to read as follows:
    ``(f) Exemption for Certain Uses.--No tax shall be imposed under 
subsection (a) or (b) on air transportation--
            ``(1) by helicopter for the purpose of transporting 
        individuals, equipment, or supplies in the exploration for, or 
        the development or removal of, hard minerals, oil, or gas, or
            ``(2) by helicopter or by fixed-wing aircraft for the 
        purpose of the planting, cultivation, cutting, or 
        transportation of, or caring for, trees (including logging 
        operations),
but only if the helicopter or fixed-wing aircraft does not take off 
from, or land at, a facility eligible for assistance under the Airport 
and Airway Development Act of 1970, or otherwise use services provided 
pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of 
title 49, United States Code, during such use. In the case of 
helicopter transportation described in paragraph (1), this subsection 
shall be applied by treating each flight segment as a distinct 
flight.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel use or air transportation after December 31, 2001, and 
before January 1, 2003.

SEC. 906. RECOVERY PERIOD FOR CERTAIN WIRELESS TELECOMMUNICATIONS 
              EQUIPMENT.

    (a) 5-Year Recovery Period for Certain Wireless Telecommunications 
Equipment.--
            (1) In general.--Subparagraph (A) of section 168(i)(2) 
        (defining qualified technological equipment) 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:
                            ``(iv) any wireless telecommunication 
                        equipment.''.
            (2) Definition of wireless telecommunication equipment.--
        Paragraph (2) of section 168(i) is amended by adding at the end 
        the following:
                    ``(D) Wireless telecommunication equipment.--For 
                purposes of this paragraph--
                            ``(i) In general.--The term `wireless 
                        telecommunication equipment' means equipment 
                        which is--
                                    ``(I) used in the transmission, 
                                reception, coordination, or switching 
                                of wireless telecommunications service, 
                                and
                                    ``(II) placed in service before 
                                September 11, 2002.
                        For purposes of this clause, the term `wireless 
                        telecommunications service' includes any 
                        commercial mobile radio service as defined in 
                        title 47 of the Code of Federal Regulations.
                            ``(ii) Exception.--The term `wireless 
                        telecommunication equipment' shall not include 
                        towers, buildings, T-1 lines, or other cabling 
                        which connects cell sites to mobile switching 
                        centers.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after September 10, 2001.

SEC. 907. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

    (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. 908. 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.
            Amend the title so as to read: ``An Act to provide 
        incentives for an economic recovery and tax relief for victims 
        of terrorism, and for other purposes.''.




                                                       Calendar No. 223

107th CONGRESS

  1st Session

                               H.R. 3090

_______________________________________________________________________

                                 AN ACT

            To provide tax incentives for economic recovery.

_______________________________________________________________________

                            November 9, 2001

        Reported with an amendment and an amendment to the title