[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1804 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1804

 To amend the Internal Revenue Code of 1986 to provide tax incentives 
for economic recovery and provide for the payment of emergency extended 
                       unemployment compensation.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 11, 2001

Mr. Sessions (for himself, Mr. Allen, Mr. Hutchinson, and Mr. Smith of 
New Hampshire) 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 tax incentives 
for economic recovery and provide for the payment of emergency extended 
                       unemployment compensation.

    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 ``American Family 
Economic Security and Stimulus Act''.
    (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--ADVANCE PAYMENT OF EARNED INCOME CREDIT

Sec. 101. Additional requirements to ensure greater use of advance 
                            payment of earned income credit.
Sec. 102. Extension of advance payment of earned income credit to all 
                            eligible taxpayers.
                    TITLE II--INDIVIDUAL PROVISIONS

Sec. 201. Acceleration of 25 percent individual income tax rate.
Sec. 202. Temporary expansion of penalty-free retirement plan 
                            distributions for health insurance premiums 
                            of unemployed individuals.
Sec. 203. Increase in child tax credit.
Sec. 204. Temporary increase in deduction for capital losses of 
                            taxpayers other than corporations.
Sec. 205. Nonrefundable credit for elementary and secondary school 
                            expenses.
          TITLE III--TEMPORARY EMERGENCY UNEMPLOYMENT BENEFITS

Sec. 301. Short title.
Sec. 302. Federal-State agreements.
Sec. 303. Temporary emergency unemployment compensation account.
Sec. 304. Payments to States having agreements for the payment of 
                            temporary emergency unemployment 
                            compensation.
Sec. 305. Financing provisions.
Sec. 306. Fraud and overpayments.
Sec. 307. Definitions.
Sec. 308. Applicability.
Sec. 309. Temporary reduction in interest rate applicable to repayments 
                            of advances to State unemployment funds.
                  TITLE IV--NATIONAL EMERGENCY GRANTS

Sec. 401. National emergency grant assistance for workers.
             TITLE V--TEMPORARY BUSINESS RELIEF PROVISIONS

Sec. 501. Special depreciation allowance for certain property.

            TITLE I--ADVANCE PAYMENT OF EARNED INCOME CREDIT

SEC. 101. ADDITIONAL REQUIREMENTS TO ENSURE GREATER USE OF ADVANCE 
              PAYMENT OF EARNED INCOME CREDIT.

    Not later than January 1, 2002, the Secretary of the Treasury by 
regulation shall require--
            (1) each employer of an employee who the employer 
        determines receives wages in an amount which indicates that 
        such employee would be eligible for the earned income credit 
        under section 32 of the Internal Revenue Code of 1986 to 
        provide such employee with a simplified application for an 
        earned income eligibility certificate, and
            (2) require each employee wishing to receive the earned 
        income tax credit to complete and return the application to the 
        employer within 30 days of receipt.
Such regulations shall require an employer to provide such an 
application within 30 days of the hiring date of an employee and at 
least annually thereafter. Such regulations shall further provide that, 
upon receipt of a completed form, an employer shall provide for the 
advance payment of the earned income credit as provided under section 
3507 of the Internal Revenue Code of 1986.

SEC. 102. EXTENSION OF ADVANCE PAYMENT OF EARNED INCOME CREDIT TO ALL 
              ELIGIBLE TAXPAYERS.

    (a) In General.--Section 3507(b) of the Internal Revenue Code of 
1986 (relating to earned income eligibility certificate) is amended by 
striking paragraph (2) and by redesignating paragraphs (3) and (4) as 
paragraphs (2) and (3), respectively.
    (b) Conforming Amendments.--
            (1) Section 3507(c)(2)(B) of the Internal Revenue Code of 
        1986 is amended by inserting ``has 1 or more qualifying 
        children and'' before ``is not married,''.
            (2) Section 3507(c)(2)(C) of such Code is amended by 
        striking ``the employee'' and inserting ``an employee with 1 or 
        more qualifying children''.
            (3) Section 3507(f) of such Code is amended by striking 
        ``who have 1 or more qualifying children and''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

                    TITLE II--INDIVIDUAL PROVISIONS

SEC. 201. ACCELERATION OF 25 PERCENT INDIVIDUAL INCOME TAX RATE.

    (a) In General.--The table contained in paragraph (2) of section 
1(i) (relating to reductions in rates after June 30, 2001) is amended--
            (1) by striking ``27.0%'' and inserting ``25.0%'', and
            (2) by striking ``26.0%'' and inserting ``25.0%''.
    (b) Reduction Not To Increase Minimum Tax.--
            (1) Subparagraph (A) of section 55(d)(1) is amended by 
        striking ``($49,000 in the case of taxable years beginning in 
        2001, 2002, 2003, and 2004)'' and inserting ``($49,000 in the 
        case of taxable years beginning in 2001, $52,200 in the case of 
        taxable years beginning in 2002 or 2003, and $50,700 in the 
        case of taxable years beginning in 2004)''.
            (2) Subparagraph (B) of section 55(d)(1) is amended by 
        striking ``($35,750 in the case of taxable years beginning in 
        2001, 2002, 2003, and 2004)'' and inserting ``($35,750 in the 
        case of taxable years beginning in 2001, $37,350 in the case of 
        taxable years beginning in 2002 or 2003, and $36,600 in the 
        case of taxable years beginning in 2004)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
    (d) Section 15 Not To Apply.--No amendment made by this section 
shall be treated as a change in a rate of tax for purposes of section 
15 of the Internal Revenue Code of 1986.

SEC. 202. TEMPORARY EXPANSION OF PENALTY-FREE RETIREMENT PLAN 
              DISTRIBUTIONS FOR HEALTH INSURANCE PREMIUMS OF UNEMPLOYED 
              INDIVIDUALS.

    (a) In General.--Subparagraph (D) of section 72(t)(2) is amended by 
adding at the end the following new clause:
                            ``(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--
                                    ``(I) clause (i) shall apply to 
                                distributions from all qualified 
                                retirement plans (as defined in section 
                                4974(c)), and
                                    ``(II) such 4 consecutive weeks 
                                shall be substituted for the 12 
                                consecutive weeks referred to in 
                                subclause (I) of clause (i).''
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after the date of the enactment of this Act.

SEC. 203. INCREASE IN CHILD TAX CREDIT.

    (a) In General.--The table contained in section 24(a)(2) (relating 
to per child amount) is amended by striking all matter preceding the 
second item and inserting the following:

                                                        ``The per child
``In the case of any taxable year                           amount is--
        beginning in--
    2001..........................................              $1,000 
    2002, 2003, or 2004...........................               600''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2000.

SEC. 204. TEMPORARY INCREASE IN DEDUCTION FOR CAPITAL LOSSES OF 
              TAXPAYERS OTHER THAN CORPORATIONS.

    (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:
``Paragraph (1) shall be applied by substituting `$5,000' for `$3,000' 
and `$2,500' for `$1,500' in the case of taxable years beginning in 
2001 or 2002.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2000.

SEC. 205. NONREFUNDABLE CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL 
              EXPENSES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25B the following new section:

``SEC. 25C. CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL EXPENSES.

    ``(a) Allowance of Credit.--In the case of an individual who 
maintains a household which includes as a member one or more qualifying 
students (as defined in subsection (b)(1)), there shall be allowed as a 
credit against the tax imposed by this chapter for the taxable year an 
amount equal to the qualified elementary and secondary education 
expenses with respect to such students which are paid or incurred by 
the taxpayer during such taxable year.
    ``(b) Dollar Limit on Amount Creditable.--The amount of qualified 
elementary and secondary education expenses paid or incurred during any 
taxable year which may be taken into account under subsection (a) shall 
not exceed $500.
    ``(c) Qualifying Student.--For purposes of this section, the term 
``qualifying student'' means a dependent of the taxpayer (within the 
meaning of section 152) who is enrolled in school on a full-time basis.
    ``(d) Qualified Elementary and Secondary Education Expenses.--For 
purposes of this section--
            ``(1) In general.--The term `qualified elementary and 
        secondary education expenses' means computer technology or 
        equipment expenses.
            ``(2) Computer technology or equipment.--The term `computer 
        technology or equipment' has the meaning given such term by 
        section 170(e)(6)(F)(i) and includes Internet access and 
        related services and computer software if such software is 
        predominately educational in nature.
    ``(e) School.--For purposes of this section, the term `school' 
means any public, charter, private, religious, or home school which 
provides elementary education or secondary education (through grade 
12), as determined under State law.
    ``(f) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any contribution for which credit is allowed 
under this section.
    ``(g) Election To Have Credit Not Apply.--A taxpayer may elect to 
have this section not apply for any taxable year.
    ``(h) Termination.--This section shall not apply to expenses paid 
or incurred after the date which is 90 days after the date of the 
enactment of this section.''.
    (b) Conforming Amendments.--
            (1) Section 24(b)(3)(B), as added and amended by the 
        Economic Growth and Tax Relief Reconciliation Act of 2001, is 
        amended by striking ``23 and 25B'' and inserting ``23, 25B, and 
        25C''.
            (2) Section 25(e)(1)(C) is amended by striking ``23 and 
        1400C'' and by inserting ``23, 25C, and 1400C''.
            (3) Section 25(e)(1)(C), as amended by the Economic Growth 
        and Tax Relief Reconciliation Act of 2001, is amended by 
        inserting ``25C,'' after ``25B,''.
            (4) Section 25B, as added by the Economic Growth and Tax 
        Relief Reconciliation Act of 2001, is amended by striking 
        ``section 23'' and inserting ``sections 23 and 25C''.
            (5) Section 26(a)(1), as amended by the Economic Growth and 
        Tax Relief Reconciliation Act of 2001, is amended by striking 
        ``and 25B'' and inserting ``25B, and 25C''.
            (6) Section 1400C(d) is amended by inserting ``and section 
        25C'' after ``this section''.
            (7) Section 1400C(d), as amended by the Economic Growth and 
        Tax Relief Reconciliation Act of 2001, is amended by striking 
        ``and 25B'' and inserting ``25B, and 25C''.
            (8) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting before the 
        item relating to section 26 the following new item:

                              ``Sec. 25C. Credit for elementary and 
                                        secondary school expenses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

          TITLE III--TEMPORARY EMERGENCY UNEMPLOYMENT BENEFITS

SEC. 301. SHORT TITLE.

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

SEC. 302. FEDERAL-STATE AGREEMENTS.

    (a) In General.--Any State which desires to do so may enter into 
and participate in an agreement under this title with the Secretary of 
Labor (in this title referred to as the ``Secretary''). Any State which 
is a party to an agreement under this title may, upon providing 30 days 
written notice to the Secretary, terminate such agreement.
    (b) Provisions of Agreement.--Any agreement under subsection (a) 
shall provide that the State agency of the State will make payments of 
temporary emergency unemployment compensation to individuals who--
            (1) have exhausted all rights to regular compensation under 
        the State law;
            (2) have no rights to compensation (including both regular 
        compensation and extended compensation) with respect to a week 
        under such law or any other State unemployment compensation law 
        or to compensation under any other Federal law (and are not 
        paid or entitled to be paid any additional compensation under 
        any State or Federal law); and
            (3) are not receiving compensation with respect to such 
        week under the unemployment compensation law of Canada.
    (c) Exhaustion of Benefits.--For purposes of subsection (b)(1), an 
individual shall be deemed to have exhausted such individual's rights 
to regular compensation under a State law when--
            (1) no payments of regular compensation can be made under 
        such law because such individual has received all regular 
        compensation available to such individual based on employment 
        or wages during such individual's base period; or
            (2) such individual's rights to such compensation have been 
        terminated by reason of the expiration of the benefit year with 
        respect to which such rights existed.
    (d) Weekly Benefit Amount.--For purposes of any agreement under 
this title--
            (1) the amount of temporary emergency unemployment 
        compensation which shall be payable to any individual for any 
        week of total unemployment shall be equal to the amount of the 
        regular compensation (including dependents' allowances) payable 
        to such individual during such individual's benefit year under 
        the State law for a week of total unemployment;
            (2) the terms and conditions of the State law which apply 
        to claims for regular compensation and to the payment thereof 
        shall apply to claims for 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 303 shall not exceed the amount established in 
        such account for such individual.
    (e) Election by States.--Notwithstanding any other provision of 
Federal law (and if State law permits), the Governor of a State 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. 303. 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. 304. PAYMENTS TO STATES HAVING AGREEMENTS FOR THE PAYMENT OF 
              TEMPORARY EMERGENCY UNEMPLOYMENT COMPENSATION.

    (a) General Rule.--There shall be paid to each State that has 
entered into an agreement under this title an amount equal to 100 
percent of the 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 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. 305. FINANCING PROVISIONS.

    (a) In General.--Funds in the extended unemployment compensation 
account (as established by section 905(a) of the Social Security Act 
(42 U.S.C. 1105(a)) of the Unemployment Trust Fund (as established by 
section 904(a) of such Act (42 U.S.C. 1104(a)) shall be used for the 
making of payments to States having agreements entered into under this 
title.
    (b) Certification.--The Secretary shall from time to time certify 
to the Secretary of the Treasury for payment to each State the sums 
payable to such State under this title. The Secretary of the Treasury, 
prior to audit or settlement by the General Accounting Office, shall 
make payments to the State in accordance with such certification, by 
transfers from the extended unemployment compensation account (as so 
established) to the account of such State in the Unemployment Trust 
Fund (as so established).
    (c) Assistance to States.--There are appropriated, 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) Authorization of Appropriations for Certain Payments.--There 
are appropriated from the general fund of the Treasury, without fiscal 
year limitation, to the extended unemployment compensation account (as 
so established) of the Unemployment Trust Fund (as so established) such 
sums as the Secretary estimates to be necessary to make the payments 
under this section in respect of--
            (1) compensation payable under chapter 85 of title 5, 
        United States Code; and
            (2) compensation payable on the basis of services to which 
        section 3309(a)(1) of the Internal Revenue Code of 1986 
        applies.
Amounts appropriated pursuant to the preceding sentence shall not be 
required to be repaid.

SEC. 306. 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. 307. DEFINITIONS.

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

SEC. 308. APPLICABILITY.

    An agreement entered into under this Act shall apply to weeks of 
unemployment--
            (1) beginning no earlier than the first day of the first 
        week beginning after the date on which such agreement is 
        entered into; and
            (2) ending before the date that is 18 months after the date 
        of enactment of this Act.

SEC. 309. TEMPORARY REDUCTION IN INTEREST RATE APPLICABLE TO REPAYMENTS 
              OF ADVANCES TO STATE UNEMPLOYMENT FUNDS.

    With respect to advances made to a State under section 1201 of the 
Social Security Act (42 U.S.C. 1321) during the period beginning on the 
date of enactment of this Act and ending on the date that is 18 months 
after such date of enactment, the rate of interest paid by a State on 
such an advance shall be determined under section 1202(b)(4) of the 
such Act (42 U.S.C. 1322(b)(4)) by substituting ``5 percent'' for ``10 
percent'' in the matter preceding subparagraph (A).

                  TITLE IV--NATIONAL EMERGENCY GRANTS

SEC. 401. NATIONAL EMERGENCY GRANT ASSISTANCE FOR WORKERS.

    (a) Eligibility for Grants.--Section 173(a) of the Workforce 
Investment Act of 1998 (29 U.S.C. 2918(a)) is amended--
            (1) in paragraph (2), by striking ``and'',
            (2) in paragraph (3), by striking the period and inserting 
        ``; and'', and
            (3) by adding at the end the following new paragraph:
            ``(4) from funds appropriated under section 174(c), to a 
        State to provide employment and training assistance and the 
        assistance described in subsections (f) and (g) to dislocated 
        workers affected by a plant closure, mass layoff, or multiple 
        layoffs if the Governor certifies in the application for 
        assistance that the attacks of September 11, 2001, contributed 
        importantly to such plant closures, mass layoffs, and multiple 
        layoffs, and to independently owned businesses and 
        proprietorships.''.
    (b) Use of Funds.--Section 173 of the Workforce Investment Act of 
1998 (29 U.S.C. 2918) is amended by adding at the end the following new 
subsections:
    ``(f) COBRA Continuation Coverage Payment Requirements.--
            ``(1) In general.--Funds made available to a State under 
        paragraph (4) of subsection (a) may be used by the State to 
        assist a participant in the program under such paragraph by 
        paying up to 75 percent of the participant's and any 
        dependents' contribution for COBRA continuation coverage of the 
        participant and dependents for a period not to exceed 10 
        months.
            ``(2) Definition.--For purposes of paragraph (1), 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.
    ``(g) Government Intervention Supplements.--
            ``(1) Personal income.--Using funds made available under 
        subsection (a)(4), a State may provide personal income 
        compensation to a dislocated worker described in such 
        subsection if--
                    ``(A) the worker is unable to work due to direct 
                Federal Government intervention, as a result of a 
                direct response to the terrorist attacks which occurred 
                on September 11, 2001, leading to--
                            ``(i) closure of the facility at which the 
                        worker was employed, prior to the intervention; 
                        or
                            ``(ii) a restriction on how business may be 
                        conducted at the facility; and
                    ``(B) the facility is located within an area in a 
                State in which a major disaster or emergency was 
                certified by the Governor.
            ``(2) Business income.--Using funds made available under 
        subsection (a)(4), a State may provide business income 
        compensation to an independently owned business or 
        proprietorship if--
                    ``(A) the business or proprietorship is unable to 
                earn revenue due to direct Federal intervention, as a 
                result of a direct response to the terrorist attacks 
                which occurred on September 11, 2001, leading to--
                            ``(i) closure of the facility at which the 
                        business or proprietorship was located, prior 
                        to the intervention; or
                            ``(ii) a restriction on how customers may 
                        access the facility; and
                    ``(B) the facility is located within an area in a 
                State in which a major disaster or emergency was 
                certified by the Governor.''.
    (c) Authorization of Appropriations.--Section 174 of the Workforce 
Investment Act of 1998 (29 U.S.C. 2919) is amended by adding at the end 
the following new subsection:
    ``(c) National Emergency Grants Relating to September 11 Attacks.--
There are authorized to be appropriated to carry out subsection (a)(4) 
of section 173 $5,000,000,000 for fiscal year 2002. Funds appropriated 
under this subsection shall be available for obligation for a period 
beginning with the date of enactment of such appropriations and ending 
18 months thereafter.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this section.

             TITLE V--TEMPORARY BUSINESS RELIEF PROVISIONS

SEC. 501. 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.
                                 <all>