[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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