[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 106 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                 S. 106

 To amend the Internal Revenue Code of 1986 to increase and modify the 
  exclusion relating to qualified small business stock, to reduce the 
depreciation recovery period for certain restaurant buildings, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 9, 2003

  Ms. Collins introduced the following bill; which was read twice and 
                referred to the Committee on the Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to increase and modify the 
  exclusion relating to qualified small business stock, to reduce the 
depreciation recovery period for certain restaurant buildings, 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.

    This Act may be cited as the ``Small Business Growth and Worker 
Assistance Act''.

SEC. 2. INCREASED EXCLUSION AND OTHER MODIFICATIONS APPLICABLE TO 
              QUALIFIED SMALL BUSINESS STOCK.

    (a) Increased Exclusion.--
            (1) In general.--Section 1202(a) of the Internal Revenue 
        Code of 1986 (relating to partial exclusion for gain from 
        certain small business stock) is amended by striking ``50 
        percent'' each place it appears and inserting ``75 percent''.
            (2) Empowerment zone businesses.--Subparagraph (A) of 
        section 1202(a)(2) of the Internal Revenue Code of 1986 
        (relating to empowerment zone businesses) is amended by 
        striking ``60 percent'' and inserting ``85 percent''.
    (b) Reduction in Holding Period.--
            (1) In general.--Paragraph (1) of section 1202(a) of the 
        Internal Revenue Code of 1986 is amended by striking ``5 
        years'' and inserting ``3 years''.
            (2) Conforming amendments.--
                    (A) Subparagraph (A) of section 1202(g)(2) of such 
                Code is amended by striking ``5 years'' and inserting 
                ``3 years'',
                    (B) Subparagraph (C) of section 1202(h)(2) of such 
                Code is amended by striking ``5-year'' and inserting 
                ``3-year'', and
                    (C) Subparagraph (A) of section 1202(j)(1) of such 
                Code is amended by striking ``5 years'' and inserting 
                ``3 years''.
    (c) Repeal of Minimum Tax Preference.--
            (1) In general.--Section 57(a) of the Internal Revenue Code 
        of 1986 (relating to items of tax preference) is amended by 
        striking paragraph (7).
            (2) Technical amendment.--Section 53(d)(1)(B)(ii)(II) of 
        such Code is amended by striking ``, (5), and (7)'' and 
        inserting ``and (5)''.
    (d) Other Modifications.--
            (1) Working capital limitation.--
                    (A) In general.--Section 1202(e)(6) of the Internal 
                Revenue Code of 1986 (relating to working capital) is 
                amended--
                            (i) in subparagraph (B), by striking ``2 
                        years'' and inserting ``5 years''; and
                            (ii) by striking ``2 years'' in the last 
                        sentence and inserting ``5 years''.
                    (B) Limitation on assets treated as used in active 
                conduct of business.--The second sentence of section 
                1202(e)(6) of such Code is amended by inserting 
                ``described in subparagraph (A)'' after ``of the 
                corporation''.
            (2) Exception from redemption rules where business 
        purpose.--Section 1202(c)(3) of such Code (relating to certain 
        purchases by corporation of its own stock) is amended by adding 
        at the end the following:
                    ``(D) Waiver where business purpose.--A purchase of 
                stock by the issuing corporation shall be disregarded 
                for purposes of subparagraph (B) if the issuing 
                corporation establishes that there was a business 
                purpose for such purchase and one of the principal 
                purposes of the purchase was not to avoid the 
                limitations of this section.''.
    (e) Excluded Qualified Trade or Business.--Section 1202(e)(3) of 
the Internal Revenue Code of 1986 (relating to qualified trade or 
business) is amended--
            (1) by inserting ``, and is anticipated to continue to 
        be,'' before ``the reputation'' in subparagraph (A), and
            (2) by inserting ``but not including the business of 
        raising fish or any business involving biotechnology 
        applications'' after ``trees'' in subparagraph (C).
    (f) Increase in Cap on Eligible Gain for Joint Returns.--
            (1) In general.--Section 1202(b)(1)(A) of the Internal 
        Revenue Code of 1986 (relating to per-issuer limitations on 
        taxpayer's eligible gain) is amended by inserting 
        ``($20,000,000 in the case of a joint return)'' after 
        ``$10,000,000''.
            (2) Conforming amendment.--Section 1202(b)(3) of such Code 
        is amended by striking subparagraph (A) and redesignating 
        subparagraphs (B) and (C) as subparagraphs (A) and (B), 
        respectively.
    (g) Decrease in Capital Gains Rate.--
            (1) In general.--Subparagraph (A) of section 1(h)(5) of the 
        Internal Revenue Code of 1986 (relating to 28-percent gain) is 
        amended to read as follows:
                    ``(A) collectibles gain, over''.
            (2) Conforming amendments.--
                    (A) Section 1(h) of such Code is amended by 
                striking paragraph (8).
                    (B) Paragraph (9) of section 1(h) of such Code is 
                amended by striking ``, gain described in paragraph 
                (7)(A)(i), and section 1202 gain'' and inserting ``and 
                gain described in paragraph (7)(A)(i)''.
    (h) Increase in Rollover Period for Qualified Small Business 
Stock.--Subsections (a)(1) and (b)(3) of section 1045 of the Internal 
Revenue Code of 1986 (relating to rollover of gain from qualified small 
business stock to another qualified small business stock) are each 
amended by striking ``60-day'' and inserting ``180-day''.
    (i) Effective Date.--The amendments made by this section shall 
apply to stock issued after the date of enactment of this Act.

SEC. 3. DEPRECIATION RECOVERY PERIOD FOR RESTAURANT BUILDINGS.

    (a) 15-Year Recovery Period.--Section 168(e)(3)(E) of the Internal 
Revenue Code of 1986 (relating to 15-year property) is amended by 
striking ``and'' at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ``, and'', and by adding at the 
end the following new clause:
                            ``(iv) any section 1250 property which is a 
                        retail restaurant facility or an improvement 
                        thereto.''.
    (b) Retail Restaurant Facility.--Section 168(e) of the Internal 
Revenue Code of 1986 (relating to classification of property) is 
amended by adding at the end the following new paragraph:
            ``(6) Retail restaurant facility.--The term `retail 
        restaurant facility' means any building if more than 50 percent 
        of the building's square footage is devoted to preparation of, 
        and seating for on-premises consumption of, prepared meals.''.
    (c) Alternative System.--The table contained in section 
168(g)(3)(B) of the Internal Revenue Code of 1986 is amended by 
inserting after the item relating to subparagraph (E)(iii) the 
following new item:

``(E)(iv)...................................................      20''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act and to all improvements made after such date.

SEC. 4. INCREASE IN SECTION 179 EXPENSING.

    (a) In General.--Section 179(b)(1) of the Internal Revenue Code of 
1986 (relating to dollar limitation) is amended to read as follows:
            ``(1) Dollar limitation.--The aggregate cost which may be 
        taken into account under subsection (a) for any taxable year 
        shall not exceed $50,000.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2002.

SEC. 5. EXTENSION OF THE TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION 
              ACT OF 2002.

    (a) In General.--Section 208 of the Temporary Extended Unemployment 
Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30) is amended 
to read as follows:

``SEC. 208. APPLICABILITY.

    ``(a) In General.--Except as provided in subsection (b), an 
agreement entered into under this title shall apply to weeks of 
unemployment--
            ``(1) beginning after the date on which such agreement is 
        entered into; and
            ``(2) ending before July 1, 2003.
    ``(b) Transition for Amount Remaining in Account.--
            ``(1) In general.--Subject to paragraphs (2) and (3), in 
        the case of an individual who has amounts remaining in an 
        account established under section 203 as of June 28, 2003, 
        temporary extended unemployment compensation shall continue to 
        be payable to such individual from such amounts for any week 
        beginning after such date for which the individual meets the 
        eligibility requirements of this title.
            ``(2) No augmentation after june 28, 2003.--If the account 
        of an individual is exhausted after June 28, 2003, then section 
        203(c) shall not apply and such account shall not be augmented 
        under such section, regardless of whether such individual's 
        State is in an extended benefit period (as determined under 
        paragraph (2) of such section).
            ``(3) Limitation.--No compensation shall be payable by 
        reason of paragraph (1) for any week beginning after September 
        27, 2003.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of the Temporary Extended 
Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 
21).

SEC. 6. WORKFORCE INVESTMENT.

    Section 137 of the Workforce Investment Act of 1998 (29 U.S.C. 
2872) is amended to read as follows:

``SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Youth Activities.--There is authorized to be appropriated and 
there is appropriated to carry out the activities described in section 
127(a), $1,000,000,000 for fiscal year 2003.
    ``(b) Adult Employment and Training Activities.--There is 
authorized to be appropriated and there is appropriated to carry out 
the activities described in section 132(a)(1), $2,000,000,000 for 
fiscal year 2003.
    ``(c) Dislocated Worker Employment and Training Activities.--There 
is authorized to be appropriated and there is appropriated to carry out 
the activities described in section 132(a)(2), $2,000,000,000 for 
fiscal year 2003.''.

SEC. 7. TEMPORARY STATE FISCAL RELIEF.

    (a) Temporary Increase of Medicaid FMAP.--
            (1) Permitting maintenance of fiscal year 2002 fmap for 
        last 2 calendar quarters of fiscal year 2003.--Notwithstanding 
        any other provision of law, but subject to paragraph (5), if 
        the FMAP determined without regard to this subsection for a 
        State for fiscal year 2003 is less than the FMAP as so 
        determined for fiscal year 2002, the FMAP for the State for 
        fiscal year 2002 shall be substituted for the State's FMAP for 
        the third and fourth calendar quarters of fiscal year 2003, 
        before the application of this subsection.
            (2) Permitting maintenance of fiscal year 2003 fmap for 
        fiscal year 2004.--Notwithstanding any other provision of law, 
        but subject to paragraph (5), if the FMAP determined without 
        regard to this subsection for a State for fiscal year 2004 is 
        less than the FMAP as so determined for fiscal year 2003, the 
        FMAP for the State for fiscal year 2003 shall be substituted 
        for the State's FMAP for each calendar quarter of fiscal year 
        2004, before the application of this subsection.
            (3) General 1.35 percentage points increase for last 2 
        calendar quarters of fiscal year 2003 and fiscal year 2004.--
        Notwithstanding any other provision of law, but subject to 
        paragraphs (5) and (6), for each State for the third and fourth 
        calendar quarters of fiscal year 2003 and each calendar quarter 
        of fiscal year 2004, the FMAP (taking into account the 
        application of paragraphs (1) and (2)) shall be increased by 
        1.35 percentage points.
            (4) Increase in cap on medicaid payments to territories.--
        Notwithstanding any other provision of law, but subject to 
        paragraph (6), with respect to the third and fourth calendar 
        quarters of fiscal year 2003 and each calendar quarter of 
        fiscal year 2004, the amounts otherwise determined for Puerto 
        Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
        and American Samoa under subsections (f) and (g) of section 
        1108 of the Social Security Act (42 U.S.C. 1308) shall each be 
        increased by an amount equal to 2.7 percent of such amounts.
            (5) Scope of application.--The increases in the FMAP for a 
        State under this subsection shall apply only for purposes of 
        title XIX of the Social Security Act and shall not apply with 
        respect to--
                    (A) disproportionate share hospital payments 
                described in section 1923 of such Act (42 U.S.C. 1396r-
                4), or
                    (B) payments under title IV or XXI of such Act (42 
                U.S.C. 601 et seq. and 1397aa et seq.).
            (6) State eligibility.--
                    (A) In general.--Subject to subparagraph (B), a 
                State is eligible for an increase in its FMAP under 
                paragraph (3) or an increase in a cap amount under 
                paragraph (4) only if the eligibility under its State 
                plan under title XIX of the Social Security Act 
                (including any waiver under such title or under section 
                1115 of such Act (42 U.S.C. 1315)) is no more 
                restrictive than the eligibility under such plan (or 
                waiver) as in effect on January 1, 2003.
                    (B) State reinstatement of eligibility permitted.--
                A State that has restricted eligibility under its State 
                plan under title XIX of the Social Security Act 
                (including any waiver under such title or under section 
                1115 of such Act (42 U.S.C. 1315)) after January 1, 
                2003, but prior to the date of enactment of this Act is 
                eligible for an increase in its FMAP under paragraph 
                (3) or an increase in a cap amount under paragraph (4) 
                in the first calendar quarter (and subsequent calendar 
                quarters) in which the State has reinstated eligibility 
                that is no more restrictive than the eligibility under 
                such plan (or waiver) as in effect on January 1, 2003.
                    (C) Rule of construction.--Nothing in subparagraph 
                (A) or (B) shall be construed as affecting a State's 
                flexibility with respect to benefits offered under the 
                State medicaid program under title XIX of the Social 
                Security Act (42 U.S.C. 1396 et seq.) (including any 
                waiver under such title or under section 1115 of such 
                Act (42 U.S.C. 1315)).
            (7) Definitions.--In this subsection:
                    (A) FMAP.--The term ``FMAP'' means the Federal 
                medical assistance percentage, as defined in section 
                1905(b) of the Social Security Act (42 U.S.C. 
                1396d(b)).
                    (B) State.--The term ``State'' has the meaning 
                given such term for purposes of title XIX of the Social 
                Security Act (42 U.S.C. 1396 et seq.).
            (8) Repeal.--Effective as of October 1, 2004, this 
        subsection is repealed.
    (b) Additional Temporary State Fiscal Relief.--
            (1) In general.--Title XX of the Social Security Act (42 
        U.S.C. 1397-1397f) is amended by adding at the end the 
        following:

``SEC. 2008. ADDITIONAL TEMPORARY GRANTS FOR STATE FISCAL RELIEF.

    ``(a) In General.--For the purpose of providing State fiscal relief 
allotments to States under this section, there are hereby appropriated, 
out of any funds in the Treasury not otherwise appropriated, 
$3,000,000,000. Such funds shall be available for obligation by the 
State through June 30, 2004, and for expenditure by the State through 
September 30, 2004. This section constitutes budget authority in 
advance of appropriations Acts and represents the obligation of the 
Federal Government to provide for the payment to States of amounts 
provided under this section.
    ``(b) Allotment.--Funds appropriated under subsection (a) shall be 
allotted by the Secretary among the States in accordance with the 
following table:

      

------------------------------------------------------------------------
              ``State                       Allotment (in dollars)
------------------------------------------------------------------------
 Alabama                              $33,918,100
 Alaska                               $8,488,200
 Amer. Samoa                          $88,600
 Arizona                              $47,601,600
 Arkansas                             $27,941,800
 California                           $314,653,900
 Colorado                             $27,906,200
 Connecticut                          $41,551,200
 Delaware                             $8,306,000
 District of Columbia                 $12,374,400
 Florida                              $128,271,100
 Georgia                              $69,106,600
 Guam                                 $135,900
 Hawaii                               $9,914,700
 Idaho                                $10,293,600
 Illinois                             $102,577,900
 Indiana                              $50,659,800
 Iowa                                 $27,799,700
 Kansas                               $21,414,300
 Kentucky                             $44,508,400
 Louisiana                            $50,974,000
 Maine                                $17,841,100
 Maryland                             $44,228,800
 Massachusetts                        $100,770,700
 Michigan                             $91,196,800
 Minnesota                            $57,515,400
 Mississippi                          $35,978,500
 Missouri                             $62,189,600
 Montana                              $8,242,000
 Nebraska                             $16,671,600
 Nevada                               $10,979,700
 New Hampshire                        $10,549,400
 New Jersey                           $87,577,300
 New Mexico                           $21,807,600
 New York                             $461,401,900
 North Carolina                       $79,538,300
 North Dakota                         $5,716,900
 N. Mariana Islands                   $50,000
 Ohio                                 $116,367,800
 Oklahoma                             $30,941,800
 Oregon                               $34,327,200
 Pennsylvania                         $159,089,700
 Puerto Rico                          $3,991,900
 Rhode Island                         $16,594,100
 South Carolina                       $38,238,000
 South Dakota                         $6,293,700
 Tennessee                            $81,120,000
 Texas                                $159,779,800
 Utah                                 $12,551,700
 Vermont                              $8,003,800
 Virgin Islands                       $128,800
 Virginia                             $44,288,300
 Washington                           $66,662,200
 West Virginia                        $19,884,400
 Wisconsin                            $47,218,900
 Wyoming                              $3,776,400
------------------------------------------------------------------------
 Total                                $3,000,000,000
------------------------------------------------------------------------

    ``(c) Use of Funds.--Funds appropriated under this section may be 
used by a State for services directed at the goals set forth in section 
2001, subject to the requirements of this title.
    ``(d) Payment to States.--Not later than 30 days after amounts are 
appropriated under subsection (a), in addition to any payment made 
under section 2002 or 2007, the Secretary shall make a lump sum payment 
to a State of the total amount of the allotment for the State as 
specified in subsection (b).
    ``(e) Definition.--For purposes of this section, the term `State' 
means the 50 States, the District of Columbia, and the territories 
contained in the list under subsection (b).''.
            (2) Repeal.--Effective as of January 1, 2005, section 2008 
        of the Social Security Act, as added by paragraph (1), is 
        repealed.
                                 <all>