[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1791 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1791
To amend the Internal Revenue Code of 1986 to provide for economic
security and recovery, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 10, 2001
Mr. Domenici introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for economic
security and recovery, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Economic Security
and Recovery 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--BUSINESS PROVISIONS
Sec. 101. Special depreciation allowance for certain property acquired
after September 10, 2001, and before
September 11, 2004.
TITLE II--PAYROLL TAX HOLIDAY
Sec. 201. Payroll tax holiday.
TITLE III--TEMPORARY EMERGENCY UNEMPLOYMENT COMPENSATION
Sec. 301. Federal-State agreements.
Sec. 302. Temporary emergency unemployment compensation account.
Sec. 303. Payments to States having agreements for the payment of
temporary emergency unemployment
compensation.
Sec. 304. Financing provisions.
Sec. 305. Fraud and overpayments.
Sec. 306. Definitions.
Sec. 307. Applicability.
TITLE I--BUSINESS PROVISIONS
SEC. 101. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED
AFTER SEPTEMBER 10, 2001, AND BEFORE SEPTEMBER 11, 2004.
(a) In General.--Section 168 (relating to accelerated cost recovery
system) is amended by adding at the end the following new subsection:
``(k) Special Allowance for Certain Property Acquired After
September 10, 2001, and Before September 11, 2004.--
``(1) Additional allowance.--In the case of any qualified
property--
``(A) the depreciation deduction provided by
section 167(a) for the taxable year in which such
property is placed in service shall include an
allowance equal to 20 percent of the adjusted basis of
the qualified property, and
``(B) the adjusted basis of the qualified property
shall be reduced by the amount of such deduction before
computing the amount otherwise allowable as a
depreciation deduction under this chapter for such
taxable year and any subsequent taxable year.
``(2) Qualified property.--For purposes of this
subsection--
``(A) In general.--The term `qualified property'
means property--
``(i)(I) to which this section applies
which has a recovery period of 20 years or less
or which is water utility property, or
``(II) which is computer software (as
defined in section 167(f)(1)(B)) for which a
deduction is allowable under section 167(a)
without regard to this subsection,
``(ii) the original use of which commences
with the taxpayer after September 10, 2001,
``(iii) which is--
``(I) acquired by the taxpayer
after September 10, 2001, and before
September 11, 2004, but only if no
written binding contract for the
acquisition was in effect before
September 11, 2001, or
``(II) acquired by the taxpayer
pursuant to a written binding contract
which was entered into after September
10, 2001, and before September 11,
2004, and
``(iv) which is placed in service by the
taxpayer before January 1, 2005.
``(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.
``(iii) Repaired or reconstructed
property.--Except as otherwise provided in
regulations, the term `qualified property'
shall not include any repaired or reconstructed
property.
``(iv) Qualified leasehold improvement
property.--The term `qualified property' shall
not include any qualified leasehold improvement
property (as defined in section 168(e)(6)).
``(C) Special rules relating to original use.--
``(i) Self-constructed property.--In the
case of a taxpayer manufacturing, constructing,
or producing property for the taxpayer's own
use, the requirements of clause (iii) of
subparagraph (A) shall be treated as met if the
taxpayer begins manufacturing, constructing, or
producing the property after September 10,
2001, and before September 11, 2004.
``(ii) Sale-leasebacks.--For purposes of
subparagraph (A)(ii), if property--
``(I) is originally placed in
service after September 10, 2001, by a
person, and
``(II) sold and leased back by such
person within 3 months after the date
such property was originally placed in
service,
such property shall be treated as originally
placed in service not earlier than the date on
which such property is used under the leaseback
referred to in subclause (II).
``(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 $4,600.
``(ii) Listed property.--The deduction
allowable under paragraph (1) shall be taken
into account in computing any recapture amount
under section 280F(b)(2).''
(b) Allowance Against Alternative Minimum Tax.--
(1) In general.--Section 56(a)(1)(A) (relating to
depreciation adjustment for alternative minimum tax) is amended
by adding at the end the following new clause:
``(iii) Additional allowance for certain
property acquired after september 10, 2001, and
before september 11, 2004.--The deduction under
section 168(k) shall be allowed.''
(2) Conforming amendment.--Clause (i) of section
56(a)(1)(A) is amended by striking ``clause (ii)'' both places
it appears and inserting ``clauses (ii) and (iii)''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after September 10, 2001, in
taxable years ending after such date.
TITLE II--PAYROLL TAX HOLIDAY
SEC. 201. PAYROLL TAX HOLIDAY.
(a) In General.--Notwithstanding any other provision of law, the
rate of tax with respect to remuneration received during the payroll
tax holiday period shall be zero under sections 1401(a), 3101(a), and
3111(a) of the Internal Revenue Code of 1986 and for purposes of
determining the applicable percentage under section 3201(a),
3211(a)(1), and 3221(a) of such Code.
(b) Payroll Tax Holiday Period.--The term ``payroll tax holiday
period'' means the period beginning after November 30, 2001, and ending
before January 1, 2002.
(c) Employer Notification.--The Secretary of the Treasury shall
notify employers of the payroll tax holiday period in any manner the
Secretary deems appropriate.
(d) Transfer of Funds.--The Secretary of the Treasury shall
transfer from the general revenues of the Federal Government an amount
sufficient so as to ensure that the income and balances of the trust
funds under section 201 of the Social Security Act and the Social
Security Equivalent Benefit Account under section 15A of the Railroad
Retirement Act of 1974 (45 U.S.C. 231n-1) are not reduced as a result
of the application of subsection (a).
(e) Determination of Benefits.--In making any determination of
benefits under title II of the Social Security Act, the Commissioner of
Social Security shall disregard the effect of the payroll tax holiday
period on any individual's earnings record.
TITLE III--TEMPORARY EMERGENCY UNEMPLOYMENT BENEFITS
SEC. 301. 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 emergency 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) 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) TEUC 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
emergency unemployment compensation is payable to such
individual.
(d) 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.
(e) Weekly Benefit Amount.--For purposes of any agreement under
this title--
(1) the amount of temporary emergency 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 extended compensation and to the payment thereof
shall apply to claims for temporary emergency 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 emergency unemployment
compensation payable to any individual for whom a temporary
emergency unemployment compensation account is established
under section 302 shall not exceed the amount established in
such account for such individual.
(f) Election by States.--Notwithstanding any other provision of
Federal law (and if State law permits), the Governor of a State is
authorized and may elect to trigger off an extended compensation period
in order to provide payment of temporary emergency unemployment
compensation to individuals who have exhausted their rights to regular
compensation under State law.
SEC. 302. TEMPORARY EMERGENCY UNEMPLOYMENT COMPENSATION ACCOUNT.
(a) In General.--Any agreement under this title shall provide that
the State will establish, for each eligible individual who files an
application for temporary emergency unemployment compensation, a
temporary emergency unemployment compensation account with respect to
such individual's benefit year.
(b) Amount in Account.--
(1) In general.--The amount established in an account under
subsection (a) shall be equal to 13 times the individual's
average weekly benefit amount for the benefit year.
(2) Reduction for extended benefits.--The amount in an
account under paragraph (1) shall be reduced (but not below
zero) by the aggregate amount of extended compensation (if any)
received by such individual relating to the same benefit year
under the Federal-State Extended Unemployment Compensation Act
of 1970 (26 U.S.C. 3304 note).
(3) 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.
SEC. 303. PAYMENTS TO STATES HAVING AGREEMENTS FOR THE PAYMENT OF
TEMPORARY EMERGENCY UNEMPLOYMENT COMPENSATION.
(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 301(b)(2) and deemed to be in effect
with respect to such State pursuant to section 301(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 301(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 301(b)(1)(A), have been reimbursable under
paragraph (1); and
(3) 100 percent of the temporary emergency unemployment
compensation paid to individuals by the State pursuant to such
agreement.
(b) Treatment of Reimbursable Compensation.--No payment shall be
made to any State under this section in respect of any compensation to
the extent the State is entitled to reimbursement in respect of such
compensation under the provisions of any Federal law other than this
title or chapter 85 of title 5, United States Code. A State shall not
be entitled to any reimbursement under such chapter 85 in respect of
any compensation to the extent the State is entitled to reimbursement
under this title in respect of such compensation.
(c) Determination of Amount.--Sums 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.
SEC. 304. FINANCING PROVISIONS.
(a) In General.--There are appropriated such funds as are necessary
to make payments to States having agreements entered into under this
title.
(b) Certification.--The Secretary shall from time to time certify
to the Secretary of the Treasury for payment to each State the sums
payable to such State under this title. The Secretary of the Treasury,
prior to audit or settlement by the General Accounting Office, shall
make payments to the State in accordance with such certification, by
transfers from the extended unemployment compensation account (as so
established) to the account of such State in the Unemployment Trust
Fund (as so established).
(c) Assistance to States.--There are appropriated, without fiscal
year limitation, such funds as may be necessary for purposes of
assisting States (as provided in title III of the Social Security Act
(42 U.S.C. 501 et seq.) in meeting the costs of administration of
agreements under this title.
(d) Appropriations for Certain Payments.--There are appropriated
from the general fund of the Treasury, without fiscal year limitation,
such sums as the Secretary estimates to be necessary to make the
payments under this section in respect of--
(1) compensation payable under chapter 85 of title 5,
United States Code; and
(2) compensation payable on the basis of services to which
section 3309(a)(1) of the Internal Revenue Code of 1986
applies.
Amounts appropriated pursuant to the preceding sentence shall not be
required to be repaid.
SEC. 305. FRAUD AND OVERPAYMENTS.
(a) In General.--If an individual knowingly has made, or caused to
be made by another, a false statement or representation of a material
fact, or knowingly has failed, or caused another to fail, to disclose a
material fact, and as a result of such false statement or
representation or of such nondisclosure such individual has received an
amount of temporary emergency unemployment compensation under this
title to which he was not entitled, such individual--
(1) shall be ineligible for further temporary emergency
unemployment compensation under this title in accordance with
the provisions of the applicable State unemployment
compensation law relating to fraud in connection with a claim
for unemployment compensation; and
(2) shall be subject to prosecution under section 1001 of
title 18, United States Code.
(b) Repayment.--In the case of individuals who have received
amounts of temporary emergency unemployment compensation under this
title to which they were not entitled, the State shall require such
individuals to repay the amounts of such emergency unemployment
compensation to the State agency, except that the State agency may
waive such repayment if it determines that--
(1) the payment of such emergency unemployment compensation
was without fault on the part of any such individual; and
(2) such repayment would be contrary to equity and good
conscience.
(c) Recovery by State Agency.--
(1) In general.--The State agency may recover the amount to
be repaid, or any part thereof, by deductions from any
temporary emergency unemployment compensation payable to such
individual under this title or from any unemployment
compensation payable to such individual under any Federal
unemployment compensation law administered by the State agency
or under any other Federal law administered by the State agency
which provides for the payment of any assistance or allowance
with respect to any week of unemployment, during the 3-year
period after the date such individuals received the payment of
the temporary emergency unemployment compensation to which they
were not entitled, except that no single deduction may exceed
50 percent of the weekly benefit amount from which such
deduction is made.
(2) Opportunity for hearing.--No repayment shall be
required, and no deduction shall be made, until a determination
has been made, notice thereof and an opportunity for a fair
hearing has been given to the individual, and the determination
has become final.
(d) Review.--Any determination by a State agency under this section
shall be subject to review in the same manner and to the same extent as
determinations under the State unemployment compensation law, and only
in that manner and to that extent.
SEC. 306. DEFINITIONS.
In 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
(26 U.S.C. 3304 note), 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 301(b)(2);
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. 307. APPLICABILITY.
(a) In General.--An agreement entered into under this title shall
apply to weeks of unemployment--
(1) beginning no earlier than the first day of the first
week after the date on which such agreement is entered into;
and
(2) ending before the date that is 12 months after the date
of enactment of this Act.
(b) Specific Rules.--
(1) In general.--Under such an agreement, the following
rules shall apply:
(A) Alternative base periods.--The modification
described in section 301(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.--The modifications
described in section 301(b)(2)(B) (relating to part-
time employment) 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 teuc.--The payments described
in section 301(b)(1)(B) (relating to temporary
emergency 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 301(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 301(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.
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