[Congressional Record Volume 148, Number 7 (Tuesday, February 5, 2002)]
[Senate]
[Pages S352-S380]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2779. Mr. KERRY submitted an amendment intended to be proposed to 
amendment SA 2698 submitted by Mr. Daschle and intended to be proposed 
to the bill (H.R. 622) to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end, insert the following:

               TITLE VI--SMALL BUSINESS EMERGENCY RELIEF

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``American Small Business 
     Emergency Relief and Recovery Act of 2001''.

     SEC. 602. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) the Nation's 25,000,000 small businesses employ more 
     than 58 percent of the private workforce, and create 75 
     percent of all net new jobs;
       (2) as a result of the terrorist attacks perpetrated 
     against the United States on September 11, 2001, many small 
     businesses nationwide suffered--
       (A) directly because--
       (i) they are, or were as of September 11, 2001, located in 
     or near the World Trade Center or the Pentagon, or in a 
     disaster area declared by the President or the Administrator 
     of the Small Business Administration;
       (ii) they were closed or their business was suspended for 
     National security purposes at the mandate of the Federal 
     Government; or
       (iii) they are, or were as of September 11, 2001, located 
     in an airport that has been closed; and
       (B) indirectly because--
       (i) they supplied or provided services to businesses that 
     were located in or near the World Trade Center or the 
     Pentagon;
       (ii) they are, or were as of September 11, 2001, a 
     supplier, service provider, or complementary industry to any 
     business or industry adversely affected by the terrorist 
     attacks perpetrated against the United States on September 
     11, 2001, in particular, the financial, hospitality, and 
     travel industries; or
       (iii) they are, or were as of September 11, 2001, integral 
     to or dependent upon a business or business sector closed or 
     suspended for national security purposes by mandate of the 
     Federal Government; and
       (3) small business owners adversely affected by the 
     terrorist attacks are finding it difficult or impossible--
       (A) to make loan payments on existing debts;
       (B) to pay their employees;
       (C) to pay their vendors;
       (D) to purchase materials, supplies, or inventory;
       (E) to pay their rent, mortgage, or other operating 
     expenses; or
       (F) to secure financing for their businesses.
       (b) Purpose.--The purpose of this title is to strengthen 
     the loan, investment, procurement assistance, and management 
     education programs of the Small Business Administration, in 
     order to help small businesses meet their existing 
     obligations, finance their businesses, and maintain and 
     create jobs, thereby providing stability to the national 
     economy.

     SEC. 603. DEFINITIONS RELATING TO TERRORIST ATTACKS.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended by adding at the end the following:
       ``(r) Definitions Relating to Terrorism Relief.--In this 
     Act, the following definitions shall apply with respect to 
     the provision of assistance under this Act in response to the 
     terrorist attacks perpetrated against the United States on 
     September 11, 2001, pursuant to the American Small Business 
     Emergency Relief and Recovery Act of 2001:
       ``(1) Directly affected.--A small business concern is 
     directly affected by the terrorist attacks perpetrated 
     against the United States on September 11, 2001, if it--

[[Page S353]]

       ``(A) is, or was as of September 11, 2001, located in or 
     near the World Trade Center or the Pentagon, or in a disaster 
     area declared by the President or the Administrator related 
     to those terrorist attacks;
       ``(B) was closed or its business was suspended for national 
     security purposes at the mandate of the Federal Government; 
     or
       ``(C) is, or was as of September 11, 2001, located in an 
     airport that has been closed.
       ``(2) Indirectly affected.--A small business concern is 
     indirectly affected by the terrorist attacks perpetrated 
     against the United States on September 11, 2001, if it--
       ``(A) supplied or provided services to any business that 
     was located in or near the World Trade Center or the 
     Pentagon, or in a disaster area declared by the President or 
     the Administrator related to those terrorist attacks;
       ``(B) is, or was as of September 11, 2001, a supplier, 
     service provider, or complementary industry to any business 
     or industry adversely affected by the terrorist acts 
     perpetrated against the United States on September 11, 2001, 
     in particular, the financial, hospitality, and travel 
     industries; or
       ``(C) it is, or was as of September 11, 2001, integral to 
     or dependent upon a business or business sector closed or 
     suspended for national security purposes by mandate of the 
     Federal Government.
       ``(3) Adversely affected.--The term `adversely affected' 
     means having suffered economic harm to or disruption of the 
     business operations of a small business concern as a direct 
     or indirect result of the terrorist attacks perpetrated 
     against the United States on September 11, 2001.
       ``(4) Substantial economic injury.--As used in section 
     7(b)(4), the term `substantial economic injury' means an 
     economic harm to a small business concern that results in the 
     inability of the small business concern--
       ``(A) to meet its obligations on an ongoing basis;
       ``(B) to pay its ordinary and necessary operating expenses; 
     or
       ``(C) to market, produce, or provide a product or service 
     ordinarily marketed, produced, or provided by the small 
     business concern.''.

     SEC. 604. DISASTER LOANS AFTER TERRORIST ATTACKS.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately before the 
     undesignated material following paragraph (3) the following:
       ``(4) Disaster loans after terrorist attacks of september 
     11, 2001.--
       ``(A) Loan authority.--In addition to any other loan 
     authorized by this section, the Administration may make such 
     loans (either directly or in cooperation with banks or other 
     lending institutions through agreements to participate on an 
     immediate or deferred basis) to a small business concern that 
     has been directly affected and suffered, or that is likely to 
     suffer, substantial economic injury as the result of the 
     terrorist attacks on September 11, 2001, including due to the 
     closure or suspension of its business for National security 
     purposes at the mandate of the Federal Government.
       ``(B) Deferment of loan payments.--
       ``(i) In general.--Notwithstanding any other provision of 
     law, payments of principal and interest on a loan made under 
     this paragraph (other than a refinancing under subparagraph 
     (D)) or paragraph (1) as a result of the terrorist attacks on 
     September 11, 2001, shall be deferred, and no interest shall 
     accrue with respect to such loan, during the 2-year period 
     following the date of issuance of such loan.
       ``(ii) Resumption of payments.--At the end of the 2-year 
     period described in clause (i), the payment of periodic 
     installments of principal and interest shall be required with 
     respect to such loan, in the same manner and subject to the 
     same terms and conditions as would otherwise be applicable to 
     any other loan made under this subsection.
       ``(C) Refinancing disaster loans.--
       ``(i) In general.--Any loan made under this subsection that 
     was outstanding as to principal or interest on September 11, 
     2001, may be refinanced by a small business concern that is 
     also eligible to receive a loan under this paragraph, and the 
     refinanced amount shall be considered to be part of the new 
     loan for purposes of this clause.
       ``(ii) No effect on eligibility.--A refinancing under 
     clause (i) by a small business concern shall be in addition 
     to any other loan eligibility for that small business concern 
     under this Act.
       ``(D) Refinancing business debt.--
       ``(i) In general.--Any business debt of a small business 
     concern that was outstanding as to principal or interest on 
     September 11, 2001, may be refinanced by the small business 
     concern if it is also eligible to receive a loan under this 
     paragraph. With respect to a refinancing under this clause, 
     payments of principal shall be deferred, and interest may 
     accrue notwithstanding subparagraph (B), during the 1-year 
     period following the date of refinancing.
       ``(ii) Resumption of payments.--At the end of the 1-year 
     period described in clause (i), the payment of periodic 
     installments of principal and interest shall be required with 
     respect to such loan, in the same manner and subject to the 
     same terms and conditions as would otherwise be applicable to 
     any other loan made under this subsection.
       ``(E) Terms.--A loan under this paragraph shall be made at 
     the same interest rate as economic injury loans under 
     paragraph (2). Any reasonable doubt concerning the repayment 
     ability of an applicant under this paragraph shall be 
     resolved in favor of the applicant.
       ``(F) No disaster declaration required.--For purposes of 
     assistance under this paragraph, no declaration of a disaster 
     area is required for those small business concerns directly 
     affected by the terrorist attacks on September 11, 2001.
       ``(G) Size standard adjustments.--Notwithstanding any other 
     provision of law, for purposes of providing assistance under 
     this paragraph to businesses located in areas of New York, 
     Virginia, and the contiguous areas designated by the 
     President or the Administrator as a disaster area following 
     the terrorist attacks on September 11, 2001, a business shall 
     be considered to be a `small business concern' if it meets 
     otherwise applicable size regulations promulgated by the 
     Administration, and, with respect to the applicable size 
     standard, it is--
       ``(i) a restaurant having not more than $8,000,000 in 
     annual receipts;
       ``(ii) a law firm having not more than $8,000,000 in annual 
     receipts;
       ``(iii) a certified public accounting business having not 
     more than $8,000,000 in annual receipts;
       ``(iv) a performing arts business having not more than 
     $8,000,000 in annual receipts;
       ``(v) a warehousing or storage business having not more 
     than $25,000,000 in annual receipts;
       ``(vi) a contracting business having a size standard under 
     the North American Industry Classification System, Subsector 
     235, and having not more than $15,000,000 in annual receipts;
       ``(vii) a food manufacturing business having not more than 
     1,000 employees;
       ``(viii) an apparel manufacturing business having not more 
     than 1,000 employees; or
       ``(ix) a travel agency having not more than $2,500,000 in 
     annual receipts.
       ``(5) Authority to increase or waive size standards and 
     size regulations.--
       ``(A) In general.--At the discretion of the Administrator, 
     the Administrator may increase or waive otherwise applicable 
     size standards or size regulations with respect to businesses 
     applying for assistance under this Act in response to the 
     terrorist attacks on September 11, 2001.
       ``(B) Exemption from administrative procedures.--The 
     provisions of subchapter II of chapter 5, of title 5, United 
     States Code, shall not apply to any increase or waiver by the 
     Administrator under subparagraph (A).
       ``(6) Increased loan caps.--
       ``(A) Aggregate loan amounts.--Except as provided in 
     subparagraph (B), and in addition to amounts otherwise 
     authorized by this Act, the loan amount outstanding and 
     committed to a borrower may not exceed--
       ``(i) with respect to a small business concern located in 
     the areas of New York, Virginia, or the contiguous areas 
     designated by the President or the Administrator as a 
     disaster area following the terrorist attacks on September 
     11, 2001--

       ``(I) $6,000,000 in total obligations under paragraph (1); 
     and
       ``(II) $6,000,000 in total obligations under paragraph (4); 
     and

       ``(ii) with respect to a small business concern that is not 
     located in an area described in clause (i) and that is 
     eligible for assistance under paragraph (4), $5,000,000 in 
     total obligations under paragraph (4).
       ``(B) Waiver authority.--The Administrator may, at the 
     discretion of the Administrator, waive the aggregate loan 
     amounts established under subparagraph (A).
       ``(7) Extended application period.--Notwithstanding any 
     other provision of law, the Administrator shall accept 
     applications for assistance under paragraphs (1) and (4) 
     until September 10, 2002, with respect to applicants for such 
     assistance as a result of the terrorist attacks on September 
     11, 2001.
       ``(8) Limitation on sales of loans.--No loan under 
     paragraph (1) or (4), made as a result of the terrorist 
     attacks on September 11, 2001, shall be sold until 4 years 
     after the date of the final loan disbursement.''.
       (b) Clerical Amendments.--Section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)) is amended in the 
     undesignated matter at the end--
       (1) by striking ``, (2), and (4)'' and inserting ``and 
     (2)''; and
       (2) by striking ``, (2), or (4)'' and inserting ``(2)''.

     SEC. 605. EMERGENCY RELIEF LOAN PROGRAM.

       (a) Loan Program.--Section 7(a) of the Small Business Act 
     (15 U.S.C. 636(a)) is amended by adding at the end the 
     following:
       ``(31) Temporary loan authority following terrorist 
     attacks.--
       ``(A) In general.--During the 1-year period beginning on 
     the date of enactment of this paragraph, the Administration 
     may make loans under this subsection to a small business 
     concern that has been, or that is likely to be directly or 
     indirectly adversely affected.
       ``(B) Loan terms.--With respect to a loan under this 
     paragraph--
       ``(i) for purposes of paragraph (2)(A), participation by 
     the Administration shall be equal to 85 percent of the 
     balance of the financing outstanding at the time of 
     disbursement of the loan;
       ``(ii) the Administrator shall collect an annual fee in an 
     amount equal to 0.25 percent of the outstanding balance of 
     the deferred participation share of the loan, notwithstanding 
     paragraph (23)(A);
       ``(iii) no fee may be collected or charged under paragraph 
     (18);

[[Page S354]]

       ``(iv) the applicable rate of interest shall not exceed a 
     rate that is 2 percentage points above the prime lending 
     rate;
       ``(v) no such loan shall be made if the total amount 
     outstanding and committed (by participation or otherwise) to 
     the borrower under this paragraph--

       ``(I) would exceed $1,000,000; or
       ``(II) at the discretion of the Administrator, and upon 
     notice to the Congress, would exceed $2,000,000, as necessary 
     to provide relief in high-cost areas or to high-cost 
     industries that have been adversely affected; or

       ``(vi) no such loan shall be made if the gross amount of 
     the loan would exceed $3,000,000;
       ``(vii) upon request of the borrower, repayment of 
     principal due on a loan made under this paragraph may be 
     deferred during the 1-year period beginning on the date of 
     issuance of the loan; and
       ``(viii) any reasonable doubt concerning the repayment 
     ability of an applicant for a loan under this paragraph shall 
     be resolved in favor of the applicant.
       ``(C) Applicability.--The loan terms described in 
     subparagraph (B) shall apply to a loan under this paragraph 
     notwithstanding any other provision of this subsection, and 
     except as specifically provided in this paragraph, a loan 
     under this paragraph shall otherwise be subject to the same 
     terms and conditions as any other loan under this subsection.
       ``(D) Travel agencies.--For purposes of loans made under 
     this paragraph, the size standard for a travel agency shall 
     be $2,500,000 in annual receipts.''.
       (b) Conforming Amendment.--Section 7(a)(23)(A) of the Small 
     Business Act (15 U.S.C. 636(a)(23)(A)) is amended by 
     inserting ``other than a loan under paragraph (31) or a loan 
     described in paragraph (2)(E),'' after ``this subsection,''.

     SEC. 606. BUSINESS LOAN ASSISTANCE FOLLOWING TERRORIST 
                   ATTACKS.

       (a) One-Year Waiver of Section 7(a) Fees.--Section 7(a)(18) 
     of the Small Business Act (15 U.S.C. 636(a)(18)) is amended 
     by adding at the end the following:
       ``(C) One-year waiver of fees following terrorist 
     attacks.--For loans approved during the 1-year period 
     following the date of enactment of the American Small 
     Business Emergency Relief and Recovery Act of 2001, a fee 
     equal to not more than one half of the amount otherwise 
     required by this paragraph shall be collected or charged 
     under this paragraph.''.
       (b) One-Year Increase in Participation Levels.--Section 
     7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is 
     amended--
       (1) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (E)''; and
       (2) by adding at the end the following:
       ``(E) Temporary participation levels following terrorist 
     attacks.--For loans under this subsection, other than 
     paragraph (31), that are approved during the 1-year period 
     following the date of enactment of the American Small 
     Business Emergency Relief and Recovery Act of 2001--
       ``(i) the guarantee percentage specified by clause (i) of 
     subparagraph (A) shall be increased to 85 percent (except 
     with respect to loans approved under the SBA Express Pilot 
     Program); and
       ``(ii) the Administrator shall collect an annual fee in an 
     amount equal to 0.25 percent of the outstanding balance of 
     the deferred participation share of the loan, notwithstanding 
     paragraph (23)(A).''.
       (c) Reduction of Section 504 Fees.--
       (1) In general.--Section 503 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 697) is amended--
       (A) in subsection (b)(7)(A)--
       (i) by redesignating clauses (i) and (ii) as subclauses (I) 
     and (II), respectively, and moving the margins 2 ems to the 
     right;
       (ii) by striking ``not exceed the lesser'' and inserting 
     ``not exceed--
       ``(i) the lesser''; and
       (iii) by adding at the end the following:
       ``(ii) 50 percent of the amount established under clause 
     (i) in the case of a loan made during the 1-year period 
     following the date of enactment of the American Small 
     Business Emergency Relief and Recovery Act of 2001, for the 
     life of the loan; and''; and
       (B) by adding at the end the following:
       ``(i) One-Year Waiver of Fees Following Terrorist 
     Attacks.--The Administration may not assess or collect any up 
     front guarantee fee with respect to loans made under this 
     title during the 1-year period following the date of 
     enactment of the American Small Business Emergency Relief and 
     Recovery Act of 2001.''.
       (2) Use of funds for section 504 program.--The provisions 
     of subsections (b)(7)(A), (d)(2), and (i) of section 503 of 
     the Small Business Investment Act of 1958, as amended by this 
     subsection, shall be effective only to the extent that funds 
     are made available under appropriations Acts, which funds 
     shall be utilized to offset the cost (as such term is defined 
     in section 502 of the Federal Credit Reform Act of 1990) to 
     the Administration of making guarantees under those amended 
     provisions.
       (d) Budgetary Treatment of Loans and Financings.--
     Assistance made available under any loan made or approved by 
     the Small Business Administration under section 7(a) or 
     7(b)(4) of the Small Business Act (15 U.S.C. 636(a)) or 
     financings made under title III or V of the Small Business 
     Investment Act of 1958 (15 U.S.C. 697a), during the 1-year 
     period beginning on the date of enactment of this Act, shall 
     be treated as separate programs of the Small Business 
     Administration for purposes of the Federal Credit Reform Act 
     of 1990 only.
       (e) Use of Funds for 7(a) and 7(a) Emergency Relief Loan 
     Programs.--The provisions of paragraphs (2), (18), and (31) 
     of section 7(a) of the Small Business Act, as amended by this 
     title, shall be effective only to the extent that funds are 
     made available under appropriations Acts, which funds shall 
     be utilized to offset the cost (as such term is defined in 
     section 502 of the Federal Credit Reform Act of 1990) to the 
     Administration of making guarantees under those amended 
     provisions.

     SEC. 607. APPROVAL PROCESS.

       Notwithstanding any other provision of law, the 
     Administrator of the Small Business Administration may adopt 
     such approval processes as the Administrator determines, 
     after consultation with the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives, to be appropriate 
     in order to make assistance under this title and the 
     amendments made by this title available to all eligible small 
     business concerns.

     SEC. 608. OTHER SPECIALIZED ASSISTANCE AND MONITORING 
                   AUTHORIZED.

       (a) Additional SBDC Authority.--
       (1) In general.--Section 21(c)(3) of the Small Business Act 
     (15 U.S.C. 648(c)(3)) is amended--
       (A) in subparagraph (S), by striking ``and'' at the end;
       (B) in subparagraph (T), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(U) providing individualized assistance with respect to 
     financing, refinancing of existing debt, and business 
     counseling to small business concerns adversely affected, 
     directly or indirectly, by the terrorist attacks on September 
     11, 2001.''.
       (2) Waiver of matching requirements.--Section 21(a)(4) of 
     the Small Business Act (15 U.S.C. 648(a)(4)) is amended by 
     inserting before the period the following: ``, except that 
     the matching requirements of this paragraph do not apply with 
     respect to any assistance provided under subsection 
     (c)(3)(U)''.
       (b) Additional SCORE Authority.--Section 8(b)(1)(B) of the 
     Small Business Act (15 U.S.C. 637(b)(1)(B) is amended--
       (1) by inserting ``(i)'' after ``(B)''; and
       (2) by adding at the end the following:
       ``(ii) The functions of the Service Corps of Retired 
     Executives (SCORE) shall include the provision of 
     individualized assistance with respect to financing, 
     refinancing of existing debt, and business counseling to 
     small business concerns adversely affected by the terrorist 
     attacks on September 11, 2001.''.
       (c) Additional Microloan Program Authority.--Section 7(m) 
     of the Small Business Act (15 U.S.C. 636(m)) is amended by 
     adding at the end the following:
       ``(14) Assistance after terrorist attacks of september 11, 
     2001.--Amounts made available under this subsection may be 
     used by intermediaries to provide individualized assistance 
     with respect to financing, refinancing of existing debt, and 
     business counseling to small business concerns adversely 
     affected by the terrorist attacks on September 11, 2001.''.
       (d) Additional Women's Business Development Center 
     Authority.--Section 29 of the Small Business Act (15 U.S.C. 
     656) is amended--
       (1) in subsection (b)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(4) individualized assistance with respect to financing, 
     refinancing of existing debt, and business counseling to 
     small business concerns owned and controlled by women that 
     were adversely affected by the terrorist attacks on September 
     11, 2001.''; and
       (2) in subsection (c), by adding at the end the following:
       ``(5) Waiver of matching requirements.--A recipient 
     organization shall not be subject to the non-Federal funding 
     requirements of paragraph (1) with respect to assistance 
     provided under subsection (b)(4).''.
       (e) Additional SBIC Authority.--Section 303 of the Small 
     Business Investment Act of 1958 (15 U.S.C. 683) is amended by 
     adding at the end the following:
       ``(k) Authority After Terrorist Attacks of September 11, 
     2001.--Small business investment companies are authorized and 
     encouraged to provide equity capital and to make loans to 
     small business concerns pursuant to sections 304(a) and 
     305(a) of the Small Business Investment Act of 1958, 
     respectively, for the purpose of providing assistance to 
     small business concerns adversely affected by the terrorist 
     attacks on September 11, 2001.''.

     SEC. 609. STUDY AND REPORT ON EFFECTS ON SMALL BUSINESS 
                   CONCERNS.

       (a) Study.--
       (1) In general.--The Office of Advocacy of the Small 
     Business Administration shall conduct annual studies for a 5-
     year period on the impact of the terrorist attacks 
     perpetrated against the United States on September 11, 2001, 
     on small business concerns, and the effects of assistance 
     provided under this title on such small business concerns.
       (2) Contents.--The study conducted under paragraph (1) 
     shall include information regarding--

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       (A) bankruptcies and business failures that occurred as a 
     result of the events of September 11, 2001, as compared to 
     those that occurred in 1999 and 2000;
       (B) the loss of jobs, revenue, and profits in small 
     business concerns as a result of those events, as compared to 
     those that occurred in 1999 and 2000;
       (C) the impact of assistance provided under this title to 
     small business concerns adversely affected by those attacks, 
     including information regarding whether--
       (i) small business concerns that received such assistance 
     would have remained in business without such assistance;
       (ii) jobs were saved due to such assistance; and
       (iii) small business concerns that remained in business had 
     increases in employment and sales since receiving assistance.
       (b) Report.--The Office of Advocacy shall submit a report 
     to Congress on the studies required by subsection (a)(1), 
     specifically addressing the requirements of subsection (a)(2) 
     in September of each of fiscal years 2002 through 2006.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $500,000 for 
     each of fiscal years 2002 through 2006.

     SEC. 610. EMERGENCY EQUITABLE RELIEF FOR FEDERAL CONTRACTORS.

       (a) Guidance Required.--
       (1) In general.--Under guidance issued by the Administrator 
     for Federal Procurement Policy in conjunction with the 
     Administrator of the Small Business Administration, the head 
     of a contracting agency of the United States may increase the 
     price of a contract entered into by the agency that is 
     performed by a small business concern (as defined in section 
     3 of the Small Business Act) to the extent determined 
     equitable under this section on the basis of loss resulting 
     from security measures taken by the Federal Government at 
     Federal facilities as a result of the terrorist attacks on 
     September 11, 2001.
       (2) Expedited issuance.--Guidance required by paragraph (1) 
     shall be issued under expedited procedures, not later than 20 
     days after the date of enactment of this Act.
       (b) Expedited Procedures.--
       (1) In general.-- The Administrator for Federal Procurement 
     Policy shall prescribe expedited procedures for considering 
     whether to grant an equitable adjustment in the case of a 
     contract of an agency under subsection (a).
       (2) Requirements.--The procedures required by paragraph (1) 
     shall provide for--
       (A) an initial review of the merits of a contractor's 
     request by the contracting officer concerned with the 
     contract;
       (B) a final determination of the merits of the contractor's 
     request, including the value of any price adjustment, by the 
     Head of the Contracting Agency, in consultation with the 
     Administrator of the Small Business Administration, taking 
     into consideration the initial review under subparagraph (A); 
     and
       (C) payment from the fund established under subsection (d) 
     for the contract's price adjustment.
       (3) Timing.--The procedures required by paragraph (1) shall 
     require completion of action on a contractor's request for 
     adjustment not later than 30 days after the date on which the 
     contractor submits the request to the contracting officer 
     concerned.
       (c) Authorized Remedies.--In addition to making a price 
     adjustment under subsection (a), the time for performance of 
     a contract may be extended under this section.
       (d) Payment of Adjusted Price.--
       (1) Fund established.--The Administrator of the Small 
     Business Administration shall establish a fund for the 
     payment of contract price adjustments under this section. 
     Payments of amounts for price adjustments shall be made out 
     of the fund.
       (2) Availability.--Notwithstanding any other provision of 
     law, amounts in the fund under this subsection shall remain 
     available until expended.
       (e) Termination of Authority.--
       (1) Requests.--No request for adjustment under this section 
     may be accepted more than 330 days after the date of 
     enactment of this Act.
       (2) Termination.--The authority under this section shall 
     terminate 1 year after the date of enactment of this Act.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Small Business Administration to 
     carry out this section, $100,000,000, including funds for 
     administrative expenses and costs. Any funds remaining in the 
     fund established under subsection (d) 1 year after the date 
     of enactment of this Act shall be transferred to the disaster 
     loan account of the United States Small Business 
     Administration.

     SEC. 611. REPORTS TO CONGRESS.

       (a) Reports Required.--The Administrator of the Small 
     Business Administration shall submit regular reports to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives regarding the implementation of this title 
     and the amendments made by this title, including program 
     delivery, staffing, and administrative expenses related to 
     such implementation.
       (b) Frequency of Reports.--The reports required by 
     subsection (a) shall be submitted 20 days after the date of 
     enactment of this Act and monthly thereafter until 1 year 
     after the date of enactment of this Act, at which time the 
     reports shall be submitted on a quarterly basis through 
     December 31, 2003.

     SEC. 612. EXPEDITED ISSUANCE OF IMPLEMENTING GUIDELINES.

       Not later than 20 days after the date of enactment of this 
     Act, the Administrator of the Small Business Administration 
     shall issue interim final rules and guidelines to implement 
     this title and the amendments made by this title.

     SEC. 613. SPECIAL AUTHORIZATIONS OF APPROPRIATIONS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     is amended by adding at the end the following:
       ``(j) Special Authorizations of Appropriations Following 
     Terrorist Attacks.--In addition to any other amounts 
     authorized by this Act for any fiscal year, there are 
     authorized to be appropriated to the Administration, to 
     remain available until expended--
       ``(1) for fiscal year 2002 and each fiscal year thereafter, 
     such sums as may be necessary to carry out paragraph (4) of 
     section 7(b), including necessary loan capital and funds for 
     administrative expenses related to making and servicing loans 
     pursuant to that paragraph;
       ``(2) for fiscal year 2002, $25,000,000, to be used for 
     activities of small business development centers pursuant to 
     section 21(c)(3)(U)--
       ``(A) $2,500,000 of which shall be used to assist small 
     business concerns (as that term is defined for purposes of 
     section 7(b)(4)) located in the areas of New York and the 
     contiguous areas designated by the President as a disaster 
     area following the terrorist attacks on September 11, 2001; 
     and
       ``(B) $1,500,000 of which shall be used to assist small 
     business concerns located in areas of Virginia and the 
     contiguous areas designated by the President as a disaster 
     area following those terrorist attacks;
       ``(3) for fiscal year 2002, $2,000,000, to be used under 
     the Service Corps of Retired Executives program authorized by 
     section 8(b)(1) for the activities described in section 
     8(b)(1)(B)(ii);
       ``(4) for fiscal year 2002, $5,000,000 for microloan 
     technical assistance authorized under section 7(m)(14);
       ``(5) for fiscal year 2002, $2,000,000 to be used for 
     activities of women's business centers authorized by section 
     29(b)(4);
       ``(6) for fiscal year 2002 and each fiscal year thereafter, 
     such sums as may be necessary to carry out paragraphs (2)(E), 
     (18)(C), and (31) of section 7(a), including any funds 
     necessary to offset fees and amounts waived or reduced under 
     those provisions, necessary loan capital, and funds for 
     administrative expenses; and
       ``(7) for fiscal year 2002, and each fiscal year 
     thereafter, such sums as may be necessary to carry out the 1-
     year suspension of fees under subsections (b)(7)(A), (d)(2), 
     and (i) of section 503 of the Small Business Investment Act 
     of 1958, in response to the terrorist attacks on September 
     11, 2001, including any funds necessary to offset fees and 
     amounts waived under those provisions and including funds for 
     administrative expenses.''.
                                  ____

  SA 2780. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 
to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       Strike clause (iii) of section 168(k)(2)(B) of the Internal 
     Revenue Code of 1986, as added by section 201(a), and insert 
     the following:
       ``(iii) Transportation property.--For purposes of this 
     subparagraph, the term `transportation property' means 
     tangible property used in the transportation of persons or 
     property in the ordinary course of business.
                                  ____

  SA 2781. Mr. DORGAN submitted an amendment intended to be proposed to 
amendment SA 2764 proposed by Mr. Reid to the amendment SA 2698 
submitted by Mr. Reid and intended to be proposed to the bill (H.R. 
622) to amend the Internal Revenue Code of 1986 to expand the adoption 
credit, and for other purposes; which was ordered to lie on the table; 
as follows:

       At the end, add the following:

                TITLE ___--TRAVEL INDUSTRY STABILIZATION

     SECTION _01. SHORT TITLE.

       This title may be cited as the ``American Travel Industry 
     Stabilization Act''.

     SEC. _02. TRAVEL INDUSTRY DISASTER RELIEF.

       (a) In General.--Notwithstanding any other provision of 
     law, the President shall take the actions described in 
     subsection (b) to compensate eligible travel-related 
     businesses.
       (b) Actions Described.--
       (1) In general.--Subject to such terms and conditions as 
     the President deems necessary, and upon application, the 
     President is authorized to issue Federal credit instruments 
     to eligible travel-related businesses described in subsection 
     (c) that do not, in the aggregate, exceed $2,000,000,000 and 
     provide the subsidy amounts necessary for such instruments in 
     accordance with the provisions of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661 et seq.).
       (2) Time for application.--An application for a Federal 
     credit instrument shall be filed by an eligible travel-
     related business not later than 1 year after the promulgation 
     of regulations.

[[Page S356]]

       (3) Terms of credit instruments.--A loan guaranteed under 
     this title may be used exclusively for the purpose of meeting 
     obligations and expenses to the extent that an applicant 
     demonstrates--
       (A) business operations were directly and adversely 
     affected by the events of September 11, 2001;
       (B) the loan guarantee is necessary to meet such 
     obligations;
       (C) the inability of the applicant to meet such obligations 
     or expenses is directly attributable to the impact of 
     September 11, 2001; and
       (D) the applicant has the ability to repay the loan.
       (c) Definitions.--In this title:
       (1) Board.--The term ``Board'' means the Air Transportation 
     Stabilization Board established under the Air Transportation 
     Safety and System Stabilization Act (49 U.S.C. 40101 note; 
     P.L. 107-42).
       (2) Eligible travel-related business.--The term ``eligible 
     travel-related business'' means a business that was injured 
     by the Government shutdown of the airline industry following 
     the terrorist attacks on the United States that occurred on 
     September 11, 2001, and that on such date--
       (A) had a contractual arrangement with an air carrier to 
     provide goods or services, including those with a contractual 
     relationship with the Airline Reporting Corporation; or
       (B) was a nonaeronautical for-profit business operating at 
     an airport engaged in the sale of consumer goods or services 
     to the public under an arrangement with the airport or the 
     airport's governing body.
       (3) Federal credit instrument.--The term ``Federal credit 
     instrument'' means any guarantee or other pledge by the Board 
     issued under section _02(b) to pledge the full faith and 
     credit of the United States to pay all or part of any of the 
     principal of and interest on a loan or other debt obligation 
     issued by an obligor and funded by a lender.
       (4) Financial obligation.--The term ``financial 
     obligation'' means any note, bond, debenture, or other debt 
     obligation issued by an obligor in connection with financing 
     under this section and section _02(b).
       (5) Lender.--The term ``lender'' means any non-Federal 
     qualified institutional buyer (as defined by section 
     230.144A(a) of title 17, Code of Federal Regulations (or any 
     successor regulatory) known as rule 144A(a) of the Securities 
     and Exchange Commission and issued under the Securities Act 
     of 1933), including--
       (A) a qualified retirement plan (as defined in section 
     4974(c) of the Internal Revenue Code of 1986 (26 U.S.C. 
     4974(c))) that is a qualified institutional buyer; and
       (B) a governmental plan (as defined in section 414(d) of 
     the Internal Revenue Code of 1986 (26 U.S.C. 414(d))) that is 
     a qualified institutional buyer.
       (6) Obligor.--The term ``obligor'' means a party primarily 
     liable for payment of the principal of, or interest on, a 
     Federal credit instrument, which party may be a corporation, 
     partnership, joint venture, trust, or governmental entity, 
     agency, or instrumentality.
       (d) Emergency Designation.--Congress designates the amount 
     of new budget authority and outlays in all fiscal years 
     resulting from this title as an emergency requirement 
     pursuant to section 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such 
     amount shall be available only to the extent that a request, 
     that includes designation of such amount as an emergency 
     requirement as defined in such Act, is transmitted by the 
     President to Congress.

     SEC. _03. ADDITIONAL FUNCTIONS FOR THE AIRLINE STABILIZATION 
                   BOARD.

       (a) Additional Functions To Stabilize the Travel 
     Industry.--The Board shall review and make recommendations to 
     the President with respect to applications for Federal credit 
     instruments submitted under section _02(b).
       (b) Federal Credit Instruments.--
       (1) In general.--The Board may enter into agreements with 1 
     or more obligors to issue Federal credit instruments under 
     section _02(b) if the Board determines, in its discretion, 
     that--
       (A) the obligor is an entity in a travel-related business 
     for which credit is not reasonably available at the time of 
     the transaction;
       (B) the intended obligation by the obligor is prudently 
     incurred; and
       (C) such agreement is a necessary part of maintaining a 
     safe, efficient, and viable travel industry in the United 
     States.
       (2) Terms and limitations.--
       (A) Forms, terms, and conditions.--A Federal credit 
     instrument shall be issued under section _02(b) in such form 
     and such terms and conditions and contain such covenants, 
     representatives, warranties, and requirements (including 
     requirements for audits) as the Board determines appropriate, 
     provided that--
       (i) a loan shall be repaid over a period not to exceed 5 
     years from the date that the loan is guaranteed under this 
     title;
       (ii) the Government guarantee shall cover not less than 80 
     percent of the value of the loan;
       (iii) loan guarantees under this title shall be extended 
     based upon the ability of the eligible travel-related 
     business to repay the loan without regard to collateral; and
       (iv) any loan origination fee may not exceed 1 percent of 
     the loan value.
       (B) Procedures.--Not later than 14 days after the date of 
     enactment of this title, the Director of the Office of 
     Management and Budget, in consultation with the Board, shall 
     issue regulations setting forth procedures for application 
     and minimum requirements.
       (c) Financial Protection of Government.--
       (1) In general.--To the extent feasible and practicable, as 
     provided in paragraphs (2) and (3), the Board shall ensure 
     that the Government is compensated for the risk assumed in 
     making guarantees under this title.
       (2) Government participation in gains.--To the extent to 
     which any participating corporation accepts financial 
     assistance, in the form of accepting the proceeds of any 
     loans guaranteed by the Government under this title, the 
     Board is authorized to enter into contracts under which the 
     Government, contingent on the financial success of the 
     participating corporation, would participate in the gains of 
     the participating corporation or its security holders through 
     the use of such instruments as warrants, stock options, 
     common or preferred stock, or other appropriate equity 
     instruments.
       (3) Deposit in treasury.--All amounts collected by the 
     Secretary of the Treasury under this subsection shall be 
     deposited in the Treasury as miscellaneous receipts.
       (e) Authorization of Funds.--Congress authorizes and hereby 
     appropriates such sums as are necessary to carry out the 
     purposes of this title.
                                  ____

  SA 2782. Mr. WYDEN submitted an amendment intended to be proposed by 
him to the bill H.R. 622 to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:
       At the end, add the following:

     SEC. __. TREATMENT OF PAYMENTS UNDER EMERGENCY SUPPLEMENTAL 
                   ACT, 2000.

       (a) In General.--Chapter 2 of title II of the Emergency 
     Supplemental Act, 2000 (Public Law 106-246; 114 Stat. 547) is 
     amended by adding at the end the following new section:
       ``Sec. 2205. Treatment of Certain Payments. (a) Payments 
     Excluded From Gross Income.--
       ``(1) In general.--For purposes of the Internal Revenue 
     Code of 1986, gross income shall not include any amount of 
     any payment under this chapter with respect to west coast 
     groundfish fishery not otherwise excludable from gross income 
     under such Code.
       ``(2) Denial of double benefit.--Paragraph (1) shall not 
     apply to any amount if under such Code--
       ``(A) a deduction or credit is allowed with respect to such 
     amount, or
       ``(B) an increase in the adjusted basis of any property 
     results from such amount.
       ``(b) Payments Disregarded in the Administration of Federal 
     Programs and Federally Assisted Programs.--Any payment 
     described in subsection (a)(1) shall not be taken into 
     account as income or receipts for purposes of determining the 
     eligibility of such individual or any other individual for 
     benefits or assistance, or the amount or extent of benefits 
     or assistance, under any Federal program or under any State 
     or local program financed in whole or in part with Federal 
     funds.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of the 
     Emergency Supplemental Act, 2000.
                                  ____

  SA 2783. Mr. TORRICELLI submitted an amendment intended to be 
proposed by him to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

          TITLE VI--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

                         Subtitle A--Extensions

     SEC. 601. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS AGAINST 
                   REGULAR AND MINIMUM TAX LIABILITY.

       (a) In General.--Paragraph (2) of section 26(a) is 
     amended--
       (1) by striking ``rule for 2000 and 2001.--'' and inserting 
     ``rule for 2000, 2001, and 2002.--'', and
       (2) by striking ``during 2000 or 2001,'' and inserting 
     ``during 2000, 2001, or 2002,''.
       (b) Conforming Amendments.--
       (1) Section 904(h) is amended by striking ``during 2000 or 
     2001'' and inserting ``during 2000, 2001, or 2002''.
       (2) The amendments made by sections 201(b), 202(f), and 
     618(b) of the Economic Growth and Tax Relief Reconciliation 
     Act of 2001 shall not apply to taxable years beginning during 
     2002.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 602. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

       (a) In General.--Section 30 is amended--
       (1) in subsection (b)(2)--
       (A) by striking ``December 31, 2001,'' and inserting 
     ``December 31, 2002,'', and
       (B) in subparagraphs (A), (B), and (C), by striking 
     ``2002'', ``2003'', and ``2004'', respectively, and inserting 
     ``2003'', ``2004'', and ``2005'', respectively, and
       (2) in subsection (e), by striking ``December 31, 2004'' 
     and inserting ``December 31, 2005''.

[[Page S357]]

       (b) Conforming Amendments.--
       (1) Subparagraph (C) of section 280F(a)(1) is amended by 
     adding at the end the following new clause
       ``(iii) Application of subparagraph.--This subparagraph 
     shall apply to property placed in service after August 5, 
     1997, and before January 1, 2006.''
       (2) Subsection (b) of section 971 of the Taxpayer Relief 
     Act of 1997 is amended by striking ``and before January 1, 
     2005''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to property placed in service after 
     December 31, 2001.

     SEC. 603. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE 
                   RESOURCES.

       (a) In General.--Subparagraphs (A), (B), and (C) of section 
     45(c)(3) are each amended by striking ``2002'' and inserting 
     ``2003''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to property placed in service after 
     December 31, 2001.

     SEC. 604. WORK OPPORTUNITY CREDIT.

       (a) In General.--Subparagraph (B) of section 51(c)(4) is 
     amended by striking ``2001'' and inserting ``2002''.
       (b) Increase in Age Ceiling for Qualified Food Stamp 
     Recipients.--Section 51(d)((8)(A)(i) (defining qualified food 
     stamp recipient) is amended by striking ``age 25'' and 
     inserting ``age 51''.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals who begin work for the employer 
     after December 31, 2001.

     SEC. 605. WELFARE-TO-WORK CREDIT.

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

     SEC. 606. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN 
                   REFUELING PROPERTY.

       (a) In General.--Section 179A is amended--
       (1) in subsection (b)(1)(B)--
       (A) by striking ``December 31, 2001,'' and inserting 
     ``December 31, 2002,'', and
       (B) in clauses (i), (ii), and (iii), by striking ``2002'', 
     ``2003'', and ``2004'', respectively, and inserting ``2003'', 
     ``2004'', and ``2005'', respectively, and
       (2) in subsection (f), by striking ``December 31, 2004'' 
     and inserting ``December 31, 2005''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply with respect to property placed in service after 
     December 31, 2001.

     SEC. 607. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 
                   OIL AND NATURAL GAS PRODUCED FROM MARGINAL 
                   PROPERTIES.

       (a) In General.--Subparagraph (H) of section 613A(c)(6) is 
     amended by striking ``2002'' and inserting ``2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 608. QUALIFIED ZONE ACADEMY BONDS.

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

     SEC. 609. COVER OVER OF TAX ON DISTILLED SPIRITS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2002'' and inserting 
     ``January 1, 2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to articles brought into the United States after 
     December 31, 2001.

     SEC. 610. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       (a) In General.--Subsection (f) of section 9812, as amended 
     by the Departments of Labor, Health and Human Services, and 
     Education, and Related Agencies Appropriations Act, 2002, is 
     amended to read as follows:
       ``(f) Application of Section.--This section shall not apply 
     to benefits for services furnished--
       ``(1) on or after September 30, 2001, and before January 1, 
     2002, and
       ``(2) after December 31, 2002.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to plan years beginning after December 31, 2000.

     SEC. 611. TEMPORARY SPECIAL RULES FOR TAXATION OF LIFE 
                   INSURANCE COMPANIES.

       (a) Reduction in Mutual Life Insurance Company Deductions 
     Not To Apply in Certain Years.--Section 809 (relating to 
     reduction in certain deductions of material life insurance 
     companies) is amended by adding at the end the following:
       ``(j) Differential Earnings Rate Treated as Zero for 
     Certain Years.--Notwithstanding subsection (c) or (f), the 
     differential earnings rate shall be treated as zero for 
     purposes of computing both the differential earnings amount 
     and the recomputed differential earnings amount for a mutual 
     life insurance company's taxable years beginning in 2001 or 
     2002.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 612. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

       (a) In General.--Paragraphs (2) and (3)(B) of section 
     220(i) (defining cut-off year) are each amended by striking 
     ``2002'' each place it appears and inserting ``2003''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 220(j) is amended by striking 
     ``1998, 1999, or 2001'' each place it appears and inserting 
     ``1998, 1999, 2001, or 2002''.
       (2) Subparagraph (A) of section 220(j)(4) is amended by 
     striking ``and 2001'' and inserting ``2001, and 2002''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 613. SUBPART F EXEMPTION FOR ACTIVE FINANCING.

       (a) In General.--
       (1) Section 953(e)(10) is amended--
       (A) by striking ``January 1, 2002'' and inserting ``January 
     1, 2003'', and
       (B) by striking ``December 31, 2001'' and inserting 
     ``December 31, 2002''.
       (2) Section 954(h)(9) is amended by striking ``January 1, 
     2002'' and inserting ``January 1, 2003''.
       (b) Life Insurance and Annuity Contracts.--
       (1) In general.--Subparagraph (B) of section 954(i)(4) is 
     amended to read as follows:
       ``(B) Life insurance and annuity contracts.--
       ``(i) In general.--Except as provided in clause (ii), the 
     amount of the reserve of a qualifying insurance company or 
     qualifying insurance company branch for any life insurance or 
     annuity contract shall be equal to the greater of--

       ``(I) the net surrender value of such contract (as defined 
     in section 807(e)(1)(A)), or
       ``(II) the reserve determined under paragraph (5).

       ``(ii) Ruling request, etc.--The amount of the reserve 
     under clause (i) shall be the foreign statement reserve for 
     the contract (less any catastrophe, deficiency, equalization, 
     or similar reserves), if, pursuant to a ruling request 
     submitted by the taxpayer or as provided in published 
     guidance, the Secretary determines that the factors taken 
     into account in determining the foreign statement reserve 
     provide an appropriate means of measuring income.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 614. REPEAL OF REQUIREMENT FOR APPROVED DIESEL OR 
                   KEROSENE TERMINALS.

       (a) In General.--Subsection (e) of section 4101 is hereby 
     repealed.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2002.

          Subtitle B--Temporary Assistance for Needy Families

     SEC. 621. REAUTHORIZATION OF TANF SUPPLEMENTAL GRANTS FOR 
                   POPULATION INCREASES FOR FISCAL YEAR 2002.

       Section 403(a)(3) of the Social Security Act (42 U.S.C. 
     603(a)(3)) is amended by adding at the end the following:
       ``(H) Reauthorization of grants for fiscal year 2002.--
     Notwithstanding any other provision of this paragraph--
       ``(i) any State that was a qualifying State under this 
     paragraph for fiscal year 2001 or any prior fiscal year shall 
     be entitled to receive from the Secretary for fiscal year 
     2002 a grant in an amount equal to the amount required to be 
     paid to the State under this paragraph for the most recent 
     fiscal year in which the State was a qualifying State;
       ``(ii) subparagraph (G) shall be applied as if `2002' were 
     substituted for `2001'; and
       ``(iii) out of any money in the Treasury of the United 
     States not otherwise appropriated, there are appropriated for 
     fiscal year 2002 such sums as are necessary for grants under 
     this subparagraph.''.

     SEC. 622. 1-YEAR EXTENSION OF CONTINGENCY FUND UNDER THE TANF 
                   PROGRAM.

       Section 403(b) of the Social Security Act (42 U.S.C. 
     603(b)) is amended--
       (1) in paragraph (2), by striking ``and 2001'' and 
     inserting ``2001, and 2002''; and
       (2) in paragraph (3)(C)(ii), by striking ``2001'' and 
     inserting ``2002''.
                                  ____

  SA 2784. Mr. THOMAS (for himself and Mr. Enzi) submitted an amendment 
intended to be proposed by him to the bill H.R. 622, to amend the 
Internal Revenue Code of 1986 to expand the adoption credit, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. INVOLUNTARY CONVERSION RELIEF FOR PRODUCERS FORCED 
                   TO SELL LIVESTOCK DUE TO WEATHER-RELATED 
                   CONDITIONS OR FEDERAL LAND MANAGEMENT AGENCY 
                   POLICY OR ACTION.

       (a) Income Inclusion Rules.--Subsection (e) of section 451 
     of the Internal Revenue Code of 1986 (relating to general 
     rule for taxable year of inclusion) is amended to read as 
     follows:
       ``(e) Special Rule for Proceeds from Livestock Sold on 
     Account of Weather-Related Conditions or Federal Land 
     Management Agency Policy or Action.--
       ``(1) In general.--In the case of income derived from the 
     sale or exchange of livestock in excess of the number the 
     taxpayer would sell if he followed his usual business 
     practices, a taxpayer may elect to include such income for 
     the taxable year following two full taxable years in which 
     the weather-related conditions or forced sales caused by

[[Page S358]]

     Federal land management agency policy or action which 
     resulted in such sale or exchange do not exist if such 
     taxpayer establishes that, under his usual business 
     practices, the sale or exchange would not have occurred in 
     the taxable year in which it occurred if it were not for--
       ``(A) the weather-related conditions that resulted in the 
     area being designated as eligible for assistance by the 
     Federal Government, or
       ``(B) forced sales resulting from Federal land management 
     agency policy or action.
       ``(2) Limitation.--Paragraph (1) shall apply only to a 
     taxpayer whose principal trade or business is farming (within 
     the meaning of section 6420(c)(3)).
       ``(3) Special rules for drought designations.--For purposes 
     of this subsection, areas may be designated as eligible for 
     drought condition assistance--
       ``(A) by Federal Government declaration, or
       ``(B) through Farm Service Agency flash reports as verified 
     and approved by the Farm Service Agency director of the State 
     in which such condition exists.''.
       (b) Rules for Replacement of Involuntarily Converted 
     Livestock.--
       (1) In general.--Section 1033(a)(2)(B) of the Internal 
     Revenue Code of 1986 (relating to period within which 
     property must be replaced) is amended by redesignating clause 
     (ii) as clause (iii) and by inserting after clause (i) the 
     following new clause:
       ``(ii) in the case of an involuntary conversion described 
     in subsection (e), 2 years after the close of the taxable 
     year following the year in which any part of the gain upon 
     the conversion is realized and in which weather-related 
     conditions or forced sales resulting from Federal land 
     management agency policy or action have ended, or''.
       (2) Involuntary conversion described.--Subsection (e) of 
     section 1033 of such Code (relating to involuntary 
     conversions) is amended to read as follows:
       ``(e) Livestock Sold on Account of Weather-Related 
     Conditions or Federal Land Management Agency Policy or 
     Action.--For purposes of this subtitle, the sale or exchange 
     of livestock (other than poultry) held by a taxpayer in 
     excess of the number the taxpayer would sell if he followed 
     usual business practices, shall be treated as an involuntary 
     conversion to which this section applies if such livestock 
     are sold or exchanged by the taxpayer solely on account of 
     weather-related conditions or forced sales caused by Federal 
     land management agency policy or action.''.
       (3) Conversion by heirs.--Section 1033(a)(2) of such Code 
     is amended by adding at the end the following new 
     subparagraph:
       ``(F) Conversion of certain property by heirs.--In the case 
     of an involuntary conversion of property described in 
     subsection (e), if the taxpayer dies during the period 
     specified in subparagraph (B), the requirements of 
     subparagraph (A) shall be satisfied if the decedent's--
       ``(i) personal representative,
       ``(ii) the beneficiary of the converted property, if no 
     personal representative exists, or
       ``(iii) the trustee in the case of a trust,
     replaces the property within such period.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to sales or exchanges after the date 
     of the enactment of this Act.
                                  ____

  SA 2785. Mr. HARKIN submitted an amendment intended to be proposed to 
amendment SA 2698 submitted by Mr. Daschle and intended to be proposed 
to the bill (H.R. 622) to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       Strike section 101(e) of the amendment and all that follows 
     through title III and insert the following:
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Technicals.--The amendments made by subsection (b) 
     shall take effect as if included in the amendment made by 
     section 101(b)(1) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001.

             TITLE II--TEMPORARY BUSINESS RELIEF PROVISIONS

     SEC. 201. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY 
                   ACQUIRED AFTER DECEMBER 31, 2001, AND BEFORE 
                   JANUARY 1, 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 
     December 31, 2001, and Before January 1, 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 30 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,
       ``(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 December 31, 2001,
       ``(iii) which is--

       ``(I) acquired by the taxpayer after December 31, 2001, and 
     before January 1, 2004, but only if no written binding 
     contract for the acquisition was in effect before January 1, 
     2002, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after December 31, 
     2001, and before January 1, 2004, and

       ``(iv) which is placed in service by the taxpayer before 
     January 1, 2004, or, in the case of property described in 
     subparagraph (B), before January 1, 2005.
       ``(B) Certain property having longer production periods 
     treated as qualified property.--
       ``(i) In general.--The term `qualified property' includes 
     property--

       ``(I) which meets the requirements of clauses (i), (ii), 
     and (iii) of subparagraph (A),
       ``(II) which has a recovery period of at least 10 years or 
     is transportation property, and
       ``(III) which is subject to section 263A by reason of 
     clause (ii) or (iii) of subsection (f)(1)(B) thereof.

       ``(ii) Only pre-january 1, 2004, basis eligible for 
     additional allowance.--In the case of property which is 
     qualified property solely by reason of clause (i), paragraph 
     (1) shall apply only to the extent of the adjusted basis 
     thereof attributable to manufacture, construction, or 
     production before January 1, 2004.
       ``(iii) Transportation property.--For purposes of this 
     subparagraph, the term `transportation property' means 
     tangible personal property used in the trade or business of 
     transporting persons or property.
       ``(C) 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.
       ``(D) 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 December 31, 2001, and before January 1, 2004.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(ii), if property--

       ``(I) is originally placed in service after December 31, 
     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).
       ``(E) 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).
       ``(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,

[[Page S359]]

       ``(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 december 31, 2001, and before january 1, 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 December 31, 
     2001, in taxable years ending after such date.

              TITLE III--ASSISTANCE FOR MEDICAID COVERAGE

     SEC. 301. TEMPORARY INCREASES OF MEDICAID FMAP FOR FISCAL 
                   YEARS 2002 AND 2003.

       (a) Permitting Maintenance of Fiscal Year 2001 FMAP For 
     Fiscal Year 2002.--Notwithstanding any other provision of 
     law, but subject to subsection (f), if the FMAP determined 
     without regard to this section for a State for fiscal year 
     2002 is less than the FMAP as so determined for fiscal year 
     2001, the FMAP for the State for fiscal year 2001 shall be 
     substituted for the State's FMAP for fiscal year 2002, before 
     the application of this section.
       (b) Permitting Maintenance of Fiscal Year 2002 FMAP For 
     Fiscal Year 2003.--Notwithstanding any other provision of 
     law, but subject to subsection (f), if the FMAP determined 
     without regard to this section 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 each calendar quarter of 
     fiscal year 2003, before the application of this section.
       (c) General 3 Percentage Points Increase.--Notwithstanding 
     any other provision of law, but subject to subsections (f) 
     and (g), for each State for each calendar quarter in fiscal 
     years 2002 and 2003, the FMAP (taking into account the 
     application of subsections (a) and (b)) shall be increased by 
     3 percentage points.
       (d) Further Increase for States With High Unemployment 
     Rates.--
       (1) In general.--Notwithstanding any other provision of 
     law, but subject to subsections (f) and (g), the FMAP for a 
     high unemployment State for a calendar quarter in fiscal year 
     2002 or fiscal year 2003 (and any subsequent such calendar 
     quarters after the first such calendar quarter for which the 
     State is a high unemployment State regardless of whether the 
     State continues to be a high unemployment State for the 
     subsequent such calendar quarters) shall be increased (after 
     the application of subsections (a), (b), and (c)) by 1.50 
     percentage points.
       (2) High unemployment state.--
       (A) In general.--For purposes of this subsection, a State 
     is a high unemployment State for a calendar quarter if, for 
     any 3 consecutive month period beginning on or after June 
     2001 and ending with the second month before the beginning of 
     the calendar quarter, the State has an average seasonally 
     adjusted unemployment rate that exceeds the average weighted 
     unemployment rate during such period. Such unemployment rates 
     for such months shall be determined based on publications of 
     the Bureau of Labor Statistics of the Department of Labor.
       (B) Average weighted unemployment rate defined.--For 
     purposes of subparagraph (A), the ``average weighted 
     unemployment rate'' for a period is--
       (i) the sum of the seasonally adjusted number of unemployed 
     civilians in each State and the District of Columbia for the 
     period; divided by
       (ii) the sum of the civilian labor force in each State and 
     the District of Columbia for the period.
       (e) 1-Year Increase in Cap on Medicaid Payments to 
     Territories.--Notwithstanding any other provision of law, 
     with respect to fiscal years 2002 and 2003, the amounts 
     otherwise determined for Puerto Rico, the Virgin Islands, 
     Guam, the Northern Mariana Islands, and American Samoa under 
     section 1108 of the Social Security Act (42 U.S.C. 1308) 
     shall each be increased by an amount equal to 6 percentage 
     points of such amounts.
       (f) Scope of Application.--The increases in the FMAP for a 
     State under this section shall apply only for purposes of 
     title XIX of the Social Security Act and shall not apply with 
     respect to--
       (1) disproportionate share hospital payments described in 
     section 1923 of such Act (42 U.S.C. 1396r-4); or
       (2) payments under titles IV and XXI of such Act (42 U.S.C. 
     601 et seq. and 1397aa et seq.).
       (g) State Eligibility.--A State is eligible for an increase 
     in its FMAP under subsection (c) or (d) or an increase in a 
     cap amount under subsection (e) only if the eligibility under 
     its State plan under title XIX of the Social Security Act 
     (including any waiver under such title or under section 1115 
     of such Act (42 U.S.C. 1315)) is no more restrictive than the 
     eligibility under such plan (or waiver) as in effect on 
     October 1, 2001.
       (h) Definitions.--In this section:
       (1) 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)).
       (2) 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.).
       (i) Implementation.--The Secretary of Health and Human 
     Services shall increase payments to States under title XIX 
     for the second, third, and fourth calendar quarters of fiscal 
     year 2002 to take into account the increases in the FMAP 
     provided for in this section for fiscal year 2002 (including 
     the first quarter of such fiscal year) and shall increase 
     payments to States under such title for each calendar quarter 
     of fiscal year 2003 to take into account the increases in the 
     FMAP provided for in this section for fiscal year 2003.
                                  ____

  SA 2786. Mr. DORGAN (for himself and Mr. Kerry) submitted an 
amendment intended to be proposed by him to the bill H.R. 622, to amend 
the Internal Revenue Code of 1986 to expand the adoption credit, and 
for other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. EXCEPTION FROM TAX ON RECOGNIZED BUILT-IN GAIN OF S 
                   CORPORATIONS.

       (a) In General.--Section 1374 of the Internal Revenue Code 
     of 1986 (relating to tax imposed on certain built-in gains) 
     is amended by redesignating subsection (e) as subsection (f) 
     and by inserting after subsection (d) the following new 
     subsection:
       ``(e) Exception for Reinvested Amounts.--
       ``(1) In general.--If an existing S corporation has a net 
     recognized built-in gain for any taxable year in the 
     recognition period and elects the application of this 
     subsection--
       ``(A) the tax (if any) imposed by subsection (a) on such 
     gain shall not be imposed until the second succeeding taxable 
     year, and
       ``(B) the amount of such gain on which tax is imposed by 
     subsection (a) for such second succeeding taxable year shall 
     not exceed the amount equal to the excess of--
       ``(i) the amount realized on the disposition of those 
     assets that resulted in such gain, over
       ``(ii) the excess of--

       ``(I) the aggregate qualified expenditures made by the S 
     corporation during the nonrecognition period, over
       ``(II) the portion (if any) of such expenditures previously 
     taken into account under this subsection.

       ``(2) Qualified expenditures.--For purposes of this 
     subsection, the term `qualified expenditures' means--
       ``(A) amounts chargeable to capital account for property 
     used in a trade or business of the S corporation,
       ``(B) payments of principal and interest on pre-effective 
     date debt of the S corporation, and
       ``(C) amounts distributed to shareholders to the extent 
     such amounts do not exceed the aggregate of such 
     shareholders' tax imposed by this chapter (and State and 
     local taxes) on amounts attributable to the disposition of 
     those assets that resulted in such net recognized built-in 
     gain.

     Payments of principal as part of a refinancing of pre-
     effective date debt shall not be taken into account under 
     subparagraph (B).
       ``(3) Nonrecognition period.--For purposes of this 
     subsection, the term `nonrecognition period' means, with 
     respect to a taxable year for which an S corporation has a 
     net recognized built-in gain, such taxable year and the first 
     and second succeeding taxable years.
       ``(4) Pre-effective date debt.--For purposes of paragraph 
     (2)(B), the term `pre-effective date debt' means--
       ``(A) debt incurred before the date of the enactment of 
     this paragraph, and
       ``(B) debt incurred on or after such date to refinance debt 
     described in subparagraph (A) (or refinanced indebtedness 
     meeting the requirements of this subparagraph) to the extent 
     that (immediately after the refinancing) the principal amount 
     of the indebtedness resulting from the refinancing does

[[Page S360]]

     not exceed the principal amount of the refinanced 
     indebtedness (immediately before the refinancing).
       ``(5) Anti-abuse rule.--Solely for purposes of determining 
     the treatment of distributions to shareholders under section 
     1368 during the recognition period--
       ``(A) any increase in the accumulated adjustment account 
     and shareholder basis by reason of the disposition of those 
     assets that resulted in the net recognized built-in gain 
     shall not exceed the amounts described in paragraph (2)(C), 
     and
       ``(B) any increase in such account and shareholder basis 
     which is not permitted under subparagraph (A) shall occur 
     immediately after the recognition period.
       ``(6) Existing s corporation.--The term `existing S 
     corporation' means any S corporation for which an election 
     under section 1362 is filed before October 12, 2001.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                  ____

  SA 2787. Mr. McCONNELL submitted an amendment intended to be proposed 
by him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 
to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

     SEC.   . INCLUSION OF KENTUCKY IN LIST OF STATES PERMITTED TO 
                   OPERATE A SEPARATE RETIREMENT SYSTEM.

       Section 218(d)(6)(C) of the Social Security Act (42 U.S.C. 
     418(d)(6)(C)) is amended by inserting ``Kentucky,'' after 
     ``Illinois,''.
                                  ____

  SA 2788. Mr. HATCH (for himself and Mr. Bennett) submitted an 
amendment intended to be proposed to amendment SA 2698 submitted by Mr. 
Daschle and intended to be proposed to the bill (H.R. 622) to amend the 
Internal Revenue Code of 1986 to expand the adoption credit, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED 
                   FOR 7 YEARS.

       (a) In General.--Paragraph (1) of section 172(b) of the 
     Internal Revenue Code of 1986 (relating to years to which 
     loss may be carried) is amended by adding at the end the 
     following new subparagraph:
       ``(H) Special rule for certain losses.--
       ``(i) In general.--In the case of a taxpayer which has a 
     net operating loss for any taxable year ending during 2000, 
     2001, or 2002, subparagraph (A)(i) shall be applied by 
     substituting `7' for `2' and subparagraph (F) shall not 
     apply.
       ``(ii) Per year limitation.--For purposes of the 6th and 
     7th taxable year preceeding the taxable year of such loss, 
     the amount of net operating losses to which clause (i) may 
     apply for any taxable year shall not exceed $50,000,000.''
       (b) Election To Disregard 7-Year Carryback.--Section 172 of 
     the Internal Revenue Code of 1986 (relating to net operating 
     loss deduction) is amended by redesignating subsection (j) as 
     subsection (k) and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Election To Disregard 7-Year Carryback for Certain 
     Net Operating Losses.--Any taxpayer entitled to a 7-year 
     carryback under subsection (b)(1)(H) from any loss year may 
     elect to have the carryback period with respect to such loss 
     year determined without regard to subsection (b)(1)(H). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.''
       (c) Temporary Suspension of 90 Percent Limit on Certain NOL 
     Carrybacks.--
       (1) In general.--Subparagraph (A) of section 56(d)(1) of 
     the Internal Revenue Code of 1986 (relating to general rule 
     defining alternative tax net operating loss deduction) is 
     amended to read as follows:
       ``(A) the amount of such deduction shall not exceed the sum 
     of--
       ``(i) the lesser of--

       ``(I) the amount of such deduction attributable to net 
     operating losses (other than the deduction attributable to 
     carrybacks described in clause (ii)(I)), or
       ``(II) 90 percent of alternative minimum taxable income 
     determined without regard to such deduction, plus

       ``(ii) the lesser of--

       ``(I) the amount of such deduction attributable to 
     carrybacks of net operating losses for taxable years ending 
     during 2000, 2001, or 2002, or
       ``(II) alternative minimum taxable income determined 
     without regard to such deduction reduced by the amount 
     determined under clause (i), and''.

       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years beginning before January 1, 
     2003.
       (d) Effective Date.--Except as provided in subsection (c), 
     the amendments made by this section shall apply to net 
     operating losses for taxable years ending after December 31, 
     1999.
                                  ____

  SA 2789. Mr. HATCH (for himself, and Mr. Bennett) submitted an 
amendment intended to be proposed to amendment SA 2698 submitted by Mr. 
Daschle and intended to be proposed to the bill (H.R. 622) to amend the 
Internal Revenue Code of 1986 to expand the adoption credit, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED 
                   FOR 7 YEARS.

       (a) In General.--Paragraph (1) of section 172(b) of the 
     Internal Revenue Code of 1986 (relating to years to which 
     loss may be carried) is amended by adding at the end the 
     following new subparagraph:
       ``(H) Special rule for certain losses.--
       ``(i) In general.--In the case of a taxpayer which has a 
     net operating loss for any taxable year ending during 2000, 
     2001, or 2002, subparagraph (A)(i) shall be applied by 
     substituting `7' for `2' and subparagraph (F) shall not 
     apply.
       ``(ii) Per year limitation.--For purposes of the 6th and 
     7th taxable year preceeding the taxable year of such loss, 
     the amount of net operating losses to which clause (i) may 
     apply for any taxable year shall not exceed $50,000,000.''
       (b) Election To Disregard 7-Year Carryback.--Section 172 of 
     the Internal Revenue Code of 1986 (relating to net operating 
     loss deduction) is amended by redesignating subsection (j) as 
     subsection (k) and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Election To Disregard 7-Year Carryback for Certain 
     Net Operating Losses.--Any taxpayer entitled to a 7-year 
     carryback under subsection (b)(1)(H) from any loss year may 
     elect to have the carryback period with respect to such loss 
     year determined without regard to subsection (b)(1)(H). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.''
       (c) Temporary Suspension of 90 Percent Limit on Certain NOL 
     Carrybacks.--
       (1) In general.--Subparagraph (A) of section 56(d)(1) of 
     the Internal Revenue Code of 1986 (relating to general rule 
     defining alternative tax net operating loss deduction) is 
     amended to read as follows:
       ``(A) the amount of such deduction shall not exceed the sum 
     of--
       ``(i) the lesser of--

       ``(I) the amount of such deduction attributable to net 
     operating losses (other than the deduction attributable to 
     carrybacks described in clause (ii)(I)), or
       ``(II) 90 percent of alternative minimum taxable income 
     determined without regard to such deduction, plus

       ``(ii) the lesser of--

       ``(I) the amount of such deduction attributable to 
     carrybacks of net operating losses for taxable years ending 
     during 2000, 2001, or 2002, or
       ``(II) alternative minimum taxable income determined 
     without regard to such deduction reduced by the amount 
     determined under clause (i), and''.

       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years beginning before January 1, 
     2003.
       (d) Temporary Foreign Tax Credit Clarification.--
       (1) In general.--Section 904(c) (relating to carryback and 
     carryover of excess tax paid) is amended by striking ``Any 
     amount'' and by inserting ``(1) General rule.--Any amount'' 
     and by adding new paragraph (2) to read as follows:
       ``(2) Temporary rule for carryback and carryforward of 
     excess foreign taxes.--For purposes of any taxable year 
     ending in 2000, 2001 or 2002 and any of the preceeding 7 
     taxable years, the provisions of paragraph (1) shall apply, 
     except that the carryforward period shall extend to the tenth 
     succeeding taxable year instead of the fifth succeeding 
     taxable year.
       (2) Effective date.--The amendment made by this subsection 
     shall apply upon enactment.
       (e) Effective Date.--Except as provided in subsections (c) 
     and (d), the amendments made by this section shall apply to 
     net operating losses for taxable years ending after December 
     31, 1999.
                                  ____

  SA 2790. Mr. NICKLES (for Mr. McCain (for himself, Mr. Allard, Mr. 
Lieberman, Ms. Snowe, Mr. Levin, Mr. Murkowski, Mr. Cleland, Mr. 
Inhofe, Ms. Landrieu, Mr. Burns, Mr. Durbin, Mr. Sessions, Mr. DeWine, 
Mr. Thurmond, Mr. Shelby, Mr. Hagel, Mr. Lugar, Mr. Kennedy, Mr. 
Warner, Ms. Collins, Mr. Hatch, Mr. Helms, Mr. Allen, Mr. Kerry, Mr. 
Fitzgerald, Mr. Stevens, Mr. Reid, Mr. Miller, Mr. Roberts, Mr. Bayh, 
Mr. Ensign, Mr. Bunning, Mr. Campbell, Mr. Nelson of Nebraska, Mr. 
Dodd, Mr. Jeffords, Mr. Brownback, Mr. Biden, Ms. Stabenow, Mr. 
Cochran, and Mr. Sarbanes)) submitted an amendment intended to be 
proposed to amendment

[[Page S361]]

SA 2698 submitted by Mr. Daschle and intended to be proposed to the 
bill (H.R. 622) to amend the Internal Revenue Code of 1986 to expand 
the adoption credit, and for other purposes; which was ordered to lie 
on the table; as follows:

       At the appropriate place insert the following:

     SEC. __. SPECIAL RULE FOR MEMBERS OF UNIFORMED SERVICES AND 
                   FOREIGN SERVICE IN DETERMINING EXCLUSION OF 
                   GAIN ON SALE OF PRINCIPAL RESIDENCE.

       (a) In General.--Section 121(d) (relating to special rules) 
     is amended by adding at the end the following:
       ``(9) Members of uniformed services and foreign service.--
       ``(A) In general.--The running of the 5-year period 
     described in subsection (a) shall be suspended with respect 
     to an individual during any time that such individual or such 
     individual's spouse is serving on qualified official extended 
     duty as a member of a uniformed service or of the Foreign 
     Service.
       ``(B) Qualified official extended duty.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `qualified official extended 
     duty' means any period of extended duty during which the 
     member of a uniformed service or the Foreign Service is under 
     a call or order compelling such duty at a duty station which 
     is a least 50 miles from the property described in 
     subparagraph (A) or compelling residence in Government 
     furnished quarters while on such duty.
       ``(ii) Extended duty.--The term `extended duty' means any 
     period of active duty pursuant to a call or order to such 
     duty for a period in excess of 90 days or for an indefinite 
     period.
       ``(C) Definitions.--For purposes of this paragraph--
       ``(i) Uniformed service.--The term `uniformed service' has 
     the meaning given such term by section 101(a)(5) of title 10, 
     United States Code.
       ``(ii) Foreign service of the united states.--The term 
     `member of the Foreign Service' has the meaning given the 
     term `member of the Service' by paragraph (1), (2), (3), (4), 
     or (5) of section 103 of the Foreign Service Act of 1980.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales or exchanges on or after the date of the 
     enactment of this Act.
                                  ____

  SA 2791. Mrs. HUTCHISON submitted an amendment intended to be 
proposed by her to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

     SECTION 1. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   ACCOUNTS FOR CHARITABLE PURPOSES.

       (a) In General.--Subsection (d) of section 408 of the 
     Internal Revenue Code of 1986 (relating to individual 
     retirement accounts) is amended by adding at the end the 
     following new paragraph:
       ``(8) Distributions for charitable purposes.--
       ``(A) In general.--No amount shall be includible in gross 
     income by reason of a qualified charitable distribution from 
     an individual retirement account to an organization described 
     in section 170(c).
       ``(B) Special rules relating to charitable remainder 
     trusts, pooled income funds, and charitable gift annuities.--
       ``(i) In general.--No amount shall be includible in gross 
     income by reason of a qualified charitable distribution from 
     an individual retirement account--

       ``(I) to a charitable remainder annuity trust or a 
     charitable remainder unitrust (as such terms are defined in 
     section 664(d)),
       ``(II) to a pooled income fund (as defined in section 
     642(c)(5)), or
       ``(III) for the issuance of a charitable gift annuity (as 
     defined in section 501(m)(5)).

     The preceding sentence shall apply only if no person holds an 
     income interest in the amounts in the trust, fund, or annuity 
     attributable to such distribution other than one or more of 
     the following: the individual for whose benefit such account 
     is maintained, the spouse of such individual, or any 
     organization described in section 170(c).
       ``(ii) Determination of inclusion of amounts distributed.--
     In determining the amount includible in the gross income of 
     any person by reason of a payment or distribution from a 
     trust referred to in clause (i)(I) or a charitable gift 
     annuity (as so defined), the portion of any qualified 
     charitable distribution to such trust or for such annuity 
     which would (but for this subparagraph) have been includible 
     in gross income--

       ``(I) shall be treated as income described in section 
     664(b)(1), and
       ``(II) shall not be treated as an investment in the 
     contract.

       ``(iii) No inclusion for distribution to pooled income 
     fund.--No amount shall be includible in the gross income of a 
     pooled income fund (as so defined) by reason of a qualified 
     charitable distribution to such fund.
       ``(C) Qualified charitable distribution.--For purposes of 
     this paragraph, the term `qualified charitable distribution' 
     means any distribution from an individual retirement 
     account--
       ``(i) which is made on or after the date that the 
     individual for whose benefit the account is maintained has 
     attained age 59\1/2\, and
       ``(ii) which is made directly from the account to--

       ``(I) an organization described in section 170(c), or
       ``(II) a trust, fund, or annuity referred to in 
     subparagraph (B).

       ``(D) Denial of deduction.--The amount allowable as a 
     deduction under section 170 to the taxpayer for the taxable 
     year shall be reduced (but not below zero) by the sum of the 
     amounts of the qualified charitable distributions during such 
     year which would be includible in the gross income of the 
     taxpayer for such year but for this paragraph.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001, and before January 1, 2004.
                                  ____

  SA 2792. Mr. LUGAR (for himself and Mr. Leahy) submitted an amendment 
intended to be proposed by him to the bill H.R. 622, to amend the 
Internal Revenue Code of 1986 to expand the adoption credit, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD.

       (a) In General.--Subsection (e) of section 170 of the 
     Internal Revenue Code of 1986 (relating to certain 
     contributions of ordinary income and capital gain property) 
     is amended by adding at the end the following new paragraph:
       ``(7) Special rule for contributions of food inventory.--
     For purposes of this section--
       ``(A) In general.--In the case of a charitable contribution 
     of apparently wholesome food by a taxpayer--
       ``(i) paragraph (3)(A) shall be applied without regard to 
     whether or not the contribution is made by a C corporation, 
     and
       ``(ii) in the case of a taxpayer other than a C 
     corporation, the total deductions under subsection (a) with 
     respect to such contributions for any taxable year shall not 
     exceed the percentage specified in subsection (b)(2) of the 
     taxpayer's net income from the trade or business, computed 
     without regard to this section.
       ``(B) Limit on reduction.--In the case of a charitable 
     contribution of apparently wholesome food which is a 
     qualified contribution (within the meaning of paragraph 
     (3)(A), as modified by subparagraph (A) of this paragraph), 
     the amount of the reduction determined under paragraph (3)(B) 
     shall not exceed the amount determined under clause (ii) 
     thereof.
       ``(C) Determination of basis.--For purposes of this 
     paragraph, if a taxpayer--
       ``(i) does not account for inventories under section 471, 
     and
       ``(ii) is not required to capitalize indirect costs under 
     section 263A,

     the taxpayer may elect, solely for purposes of paragraph 
     (3)(B)(ii), to treat the basis of any qualified contribution 
     of such taxpayer as being equal to 25 percent of the fair 
     market value of such contribution.
       ``(D) Determination of fair market value.--In the case of a 
     charitable contribution of apparently wholesome food which is 
     a qualified contribution (within the meaning of paragraph 
     (3), as modified by subparagraphs (A) and (B) of this 
     paragraph) and which, solely by reason of internal standards 
     of the taxpayer or lack of market, cannot or will not be 
     sold, the fair market value of such contribution shall be 
     determined--
       ``(i) without regard to such internal standards or such 
     lack of market and
       ``(ii) by taking into account the price at which the same 
     or substantially the same food items are sold by the taxpayer 
     at the time of the contribution (or, if not so sold at such 
     time, in the recent past).
       ``(E) Apparently wholesome food.--For purposes of this 
     paragraph, the term `apparently wholesome food' has the 
     meaning given such term by section 22(b)(2) of the Bill 
     Emerson Good Samaritan Food Donation Act (42 U.S.C. 
     1791(b)(2)), as in effect on the date of the enactment of 
     this paragraph.
       ``(F) Termination.--This paragraph shall not apply to any 
     contribution made during any taxable year beginning after 
     December 31, 2004.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                  ____

  SA 2793. Mr. GRAMM (for himself, and Mrs. Hutchison) submitted an 
amendment intended to be proposed to amendment SA 2698 submitted by Mr. 
Daschle and intended to be proposed to the bill (H.R. 622) to amend the 
Internal Revenue Code of 1986 to expand the adoption credit, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       (a) In General.--Part II of subchapter O of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to basis rules of 
     general application) is amended by inserting after section 
     1021 the following new section:

[[Page S362]]

     ``SEC. 1022. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       ``(a) General Rule.--
       ``(1) Indexed basis substituted for adjusted basis.--Except 
     as provided in paragraph (2), if an indexed asset which has 
     been held for more than 1 year is sold or otherwise disposed 
     of, then, for purposes of this title, the indexed basis of 
     the asset shall be substituted for its adjusted basis.
       ``(2) Exception for depreciation, etc.--The deductions for 
     depreciation, depletion, and amortization shall be determined 
     without regard to the application of paragraph (1) to the 
     taxpayer or any other person.
       ``(b) Indexed Asset.--
       ``(1) In general.--For purposes of this section, the term 
     `indexed asset' means--
       ``(A) stock in a corporation, and
       ``(B) tangible property (or any interest therein), which is 
     a capital asset or property used in the trade or business (as 
     defined in section 1231(b)).
       ``(2) Certain property excluded.--For purposes of this 
     section, the term `indexed asset' does not include--
       ``(A) Creditor's interest.--Any interest in property which 
     is in the nature of a creditor's interest.
       ``(B) Options.--Any option or other right to acquire an 
     interest in property.
       ``(C) Net lease property.--In the case of a lessor, net 
     lease property (within the meaning of subsection (h)(1)).
       ``(D) Certain preferred stock.--Stock which is preferred as 
     to dividends and does not participate in corporate growth to 
     any significant extent.
       ``(E) Stock in certain corporations.--Stock in--
       ``(i) an S corporation (within the meaning of section 
     1361),
       ``(ii) a personal holding company (as defined in section 
     542), and
       ``(iii) a foreign corporation.
       ``(3) Exception for stock in foreign corporation which is 
     regularly traded on national or regional exchange.--Clause 
     (iii) of paragraph (2)(E) shall not apply to stock in a 
     foreign corporation the stock of which is listed on the New 
     York Stock Exchange, the American Stock Exchange, or any 
     domestic regional exchange for which quotations are published 
     on a regular basis other than--
       ``(A) stock of a foreign investment company (within the 
     meaning of section 1246(b)), and
       ``(B) stock in a foreign corporation held by a United 
     States person who meets the requirements of section 
     1248(a)(2).
       ``(c) Indexed Basis.--For purposes of this section--
       ``(1) General rule.--The indexed basis for any asset is--
       ``(A) the adjusted basis of the asset, increased by
       ``(B) the applicable inflation adjustment.
       ``(2) Applicable inflation adjustment.--The applicable 
     inflation adjustment for any asset is an amount equal to--
       ``(A) the adjusted basis of the asset, multiplied by
       ``(B) the percentage (if any) by which--
       ``(i) the chain-type price index for GDP for the last 
     calendar quarter ending before the asset is disposed of, 
     exceeds
       ``(ii) the chain-type price index for GDP for the last 
     calendar quarter ending before the asset was acquired by the 
     taxpayer.

     The percentage under subparagraph (B) shall be rounded to the 
     nearest \1/10\ of 1 percentage point.
       ``(3) Chain-type price index for gdp.--The chain-type price 
     index for GDP for any calendar quarter is such index for such 
     quarter (as shown in the last revision thereof released by 
     the Secretary of Commerce before the close of the following 
     calendar quarter).
       ``(d) Special Rules.--For purposes of this section--
       ``(1) Treatment as separate asset.--In the case of any 
     asset, the following shall be treated as a separate asset:
       ``(A) a substantial improvement to property,
       ``(B) in the case of stock of a corporation, a substantial 
     contribution to capital, and
       ``(C) any other portion of an asset to the extent that 
     separate treatment of such portion is appropriate to carry 
     out the purposes of this section.
       ``(2) Assets which are not indexed assets throughout 
     holding period.--
       ``(A) In general.--The applicable inflation ratio shall be 
     appropriately reduced for calendar months at any time during 
     which the asset was not an indexed asset.
       ``(B) Certain short sales.--For purposes of applying 
     subparagraph (A), an asset shall be treated as not an indexed 
     asset for any short sale period during which the taxpayer or 
     the taxpayer's spouse sells short property substantially 
     identical to the asset. For purposes of the preceding 
     sentence, the short sale period begins on the day after the 
     substantially identical property is sold and ends on the 
     closing date for the sale.
       ``(3) Treatment of certain distributions.--A distribution 
     with respect to stock in a corporation which is not a 
     dividend shall be treated as a disposition.
       ``(4) Section cannot increase ordinary loss.--To the extent 
     that (but for this paragraph) this section would create or 
     increase a net ordinary loss to which section 1231(a)(2) 
     applies or an ordinary loss to which any other provision of 
     this title applies, such provision shall not apply. The 
     taxpayer shall be treated as having a long-term capital loss 
     in an amount equal to the amount of the ordinary loss to 
     which the preceding sentence applies.
       ``(5) Acquisition date where there has been prior 
     application of subsection (a)(1) with respect to the 
     taxpayer.--If there has been a prior application of 
     subsection (a)(1) to an asset while such asset was held by 
     the taxpayer, the date of acquisition of such asset by the 
     taxpayer shall be treated as not earlier than the date of the 
     most recent such prior application.
       ``(6) Collapsible corporations.--The application of section 
     341(a) (relating to collapsible corporations) shall be 
     determined without regard to this section.
       ``(e) Certain Conduit Entities.--
       ``(1) Regulated investment companies; real estate 
     investment trusts; common trust funds.--
       ``(A) In general.--Stock in a qualified investment entity 
     shall be an indexed asset for any calendar month in the same 
     ratio as the fair market value of the assets held by such 
     entity at the close of such month which are indexed assets 
     bears to the fair market value of all assets of such entity 
     at the close of such month.
       ``(B) Ratio of 90 percent or more.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 90 percent or more, such ratio for 
     such month shall be 100 percent.
       ``(C) Ratio of 10 percent or less.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 10 percent or less, such ratio for 
     such month shall be zero.
       ``(D) Valuation of assets in case of real estate investment 
     trusts.--Nothing in this paragraph shall require a real 
     estate investment trust to value its assets more frequently 
     than once each 36 months (except where such trust ceases to 
     exist). The ratio under subparagraph (A) for any calendar 
     month for which there is no valuation shall be the trustee's 
     good faith judgment as to such valuation.
       ``(E) Qualified investment entity.--For purposes of this 
     paragraph, the term `qualified investment entity' means--
       ``(i) a regulated investment company (within the meaning of 
     section 851),
       ``(ii) a real estate investment trust (within the meaning 
     of section 856), and
       ``(iii) a common trust fund (within the meaning of section 
     584).
       ``(2) Partnerships.--In the case of a partnership, the 
     adjustment made under subsection (a) at the partnership level 
     shall be passed through to the partners.
       ``(3) Subchapter s corporations.--In the case of an 
     electing small business corporation, the adjustment under 
     subsection (a) at the corporate level shall be passed through 
     to the shareholders.
       ``(f) Dispositions Between Related Persons.--
       ``(1) In general.--This section shall not apply to any sale 
     or other disposition of property between related persons 
     except to the extent that the basis of such property in the 
     hands of the transferee is a substituted basis.
       ``(2) Related persons defined.--For purposes of this 
     section, the term `related persons' means--
       ``(A) persons bearing a relationship set forth in section 
     267(b), and
       ``(B) persons treated as single employer under subsection 
     (b) or (c) of section 414.
       ``(g) Transfers To Increase Indexing Adjustment or 
     Depreciation Allowance.--If any person transfers cash, debt, 
     or any other property to another person and the principal 
     purpose of such transfer is--
       ``(1) to secure or increase an adjustment under subsection 
     (a), or
       ``(2) to increase (by reason of an adjustment under 
     subsection (a)) a deduction for depreciation, depletion, or 
     amortization,

     the Secretary may disallow part or all of such adjustment or 
     increase.
       ``(h) Definitions.--For purposes of this section--
       ``(1) Net lease property defined.--The term `net lease 
     property' means leased real property where--
       ``(A) the term of the lease (taking into account options to 
     renew) was 50 percent or more of the useful life of the 
     property, and
       ``(B) for the period of the lease, the sum of the 
     deductions with respect to such property which are allowable 
     to the lessor solely by reason of section 162 (other than 
     rents and reimbursed amounts with respect to such property) 
     is 15 percent or less of the rental income produced by such 
     property.
       ``(2) Stock includes interest in common trust fund.--The 
     term `stock in a corporation' includes any interest in a 
     common trust fund (as defined in section 584(a)).
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''
       (b) Clerical Amendment.--The table of sections for part II 
     of subchapter O of such chapter 1 of the Internal Revenue 
     Code of 1986 is amended by inserting after the item relating 
     to section 1021 the following new item:

``Sec. 1022. Indexing of certain assets for purposes of determining 
              gain or loss.''

       (c) Adjustment To Apply for Purposes of Determining 
     Earnings and Profits.--Subsection (f) of section 312 of the 
     Internal Revenue Code of 1986 (relating to effect on earnings 
     and profits of gain or loss and of receipt of tax-free 
     distributions) is amended by adding at the end thereof the 
     following new paragraph:

[[Page S363]]

       ``(3) Effect on earnings and profits of indexed basis.--

  ``For substitution of indexed basis for adjusted basis in the case of 
the disposition of certain assets after December 31, 2001, see section 
1022(a)(1).''

       (d) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to the disposition of any property the holding period 
     of which begins after the date of the enactment of this Act.
       (2) Certain transactions between related persons.--The 
     amendments made by this section shall not apply to the 
     disposition of any property acquired after the date of the 
     enactment of this Act from a related person (as defined in 
     section 1022(f)(2) of the Internal Revenue Code of 1986, as 
     added by this section) if--
       (A) such property was so acquired for a price less than the 
     property's fair market value, and
       (B) the amendments made by this section did not apply to 
     such property in the hands of such related person.
                                  ____

  SA 2794. Mr. DURBIN submitted an amendment intended to be proposed to 
amendment SA 2698 submitted by Mr. Daschle and intended to be proposed 
to the bill (H.R. 622) to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the appropriate place insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Terrorism Risk Insurance Act 
     of 2001''.

     SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) property and casualty insurance firms are important 
     financial institutions, the products of which allow 
     mutualization of risk and the efficient use of financial 
     resources and enhance the ability of the economy to maintain 
     stability, while responding to a variety of economic, 
     political, environmental, and other risks with a minimum of 
     disruption;
       (2) the ability of businesses and individuals to obtain 
     property and casualty insurance at reasonable and predictable 
     prices, in order to spread the risk of both routine and 
     catastrophic loss, is critical to economic growth, urban 
     development, and the construction and maintenance of public 
     and private housing, as well as to the promotion of United 
     States exports and foreign trade in an increasingly 
     interconnected world;
       (3) the ability of the insurance industry to cover the 
     unprecedented financial risks presented by potential acts of 
     terrorism in the United States can be a major factor in the 
     recovery from terrorist attacks, while maintaining the 
     stability of the economy;
       (4) widespread financial market uncertainties have arisen 
     following the terrorist attacks of September 11, 2001, 
     including the absence of information from which financial 
     institutions can make statistically valid estimates of the 
     probability and cost of future terrorist events, and 
     therefore the size, funding, and allocation of the risk of 
     loss caused by such acts of terrorism;
       (5) a decision by property and casualty insurers to deal 
     with such uncertainties, either by terminating property and 
     casualty coverage for losses arising from terrorist events, 
     or by radically escalating premium coverage to compensate for 
     risks of loss that are not readily predictable, could 
     seriously hamper ongoing and planned construction, property 
     acquisition, and other business projects, generate a dramatic 
     increase in rents, and otherwise suppress economic activity; 
     and
       (6) the United States Government should provide temporary 
     financial compensation to insured parties, contributing to 
     the stabilization of the United States economy in a time of 
     national crisis, while the financial services industry 
     develops the systems, mechanisms, products, and programs 
     necessary to create a viable financial services market for 
     private terrorism risk insurance.
       (b) Purpose.--The purpose of this Act is to establish a 
     temporary Federal program that provides for a transparent 
     system of shared public and private compensation for insured 
     losses resulting from acts of terrorism, in order to--
       (1) protect consumers by addressing market disruptions and 
     ensure the continued widespread availability and 
     affordability of property and casualty insurance for 
     terrorism risk; and
       (2) allow for a transitional period for the private markets 
     to stabilize, resume pricing of such insurance, and build 
     capacity to absorb any future losses, while preserving State 
     insurance regulation and consumer protections.

     SEC. 3. DEFINITIONS.

       In this Act, the following definitions shall apply:
       (1) Act of terrorism.--
       (A) Certification.--The term ``act of terrorism'' means any 
     act that is certified by the Secretary, in concurrence with 
     the Secretary of State, and the Attorney General of the 
     United States--
       (i) to be a violent act or an act that is dangerous to--

       (I) human life;
       (II) property; or
       (III) infrastructure;

       (ii) to have resulted in damage within the United States, 
     or outside the United States in the case of an air carrier or 
     vessel described in paragraph (3)(A)(ii); and
       (iii) to have been committed by an individual or 
     individuals acting on behalf of any foreign person or foreign 
     interest, as part of an effort to coerce the civilian 
     population of the United States or to influence the policy or 
     affect the conduct of the United States Government by 
     coercion.
       (B) Limitation.--No act or event shall be certified by the 
     Secretary as an act of terrorism if--
       (i) the act or event is committed in the course of a war 
     declared by the Congress; or
       (ii) losses resulting from the act or event, in the 
     aggregate, do not exceed $5,000,000.
       (C) Determinations final.--Any certification of, or 
     determination not to certify, an act or event as an act of 
     terrorism under this paragraph shall be final, and shall not 
     be subject to judicial review.
       (2) Business interruption coverage.--The term ``business 
     interruption coverage''--
       (A) means coverage of losses for temporary relocation 
     expenses and ongoing expenses, including ordinary wages, 
     where--
       (i) there is physical damage to the business premises of 
     such magnitude that the business cannot open for business;
       (ii) there is physical damage to other property that 
     totally prevents customers or employees from gaining access 
     to the business premises; or
       (iii) the Federal, State, or local government shuts down an 
     area due to physical or environmental damage, thereby 
     preventing customers or employees from gaining access to the 
     business premises; and
       (B) does not include lost profits, other than in the case 
     of a small business concern (as defined in section 3 of the 
     Small Business Act (15 U.S.C. 632) and applicable regulations 
     thereunder) in any case described in clause (i), (ii), or 
     (iii) of subparagraph (A).
       (3) Insured loss.--The term ``insured loss''--
       (A) means any loss resulting from an act of terrorism that 
     is covered by primary property and casualty insurance, 
     including business interruption coverage, issued by a 
     participating insurance company, if such loss--
       (i) occurs within the United States; or
       (ii) occurs to an air carrier (as defined in section 40102 
     of title 49, United States Code) or to a United States flag 
     vessel (or a vessel based principally in the United States, 
     on which United States income tax is paid and whose insurance 
     coverage is subject to regulation in the United States), 
     regardless of where the loss occurs; and
       (B) excludes any life or health insurance coverage.
       (4) Market share.--
       (A) In general.--The ``market share'' of a participating 
     insurance company shall be calculated using the total amount 
     of direct written property and casualty insurance premiums 
     for the participating insurance company during the 2-year 
     period preceding the year in which the subject act of 
     terrorism occurred (or during such other period for which 
     adequate data are available, as determined by the Secretary), 
     as a percentage of the aggregate of all such property and 
     casualty insurance premiums industry-wide during that period.
       (B) Adjustments.--The Secretary may adjust the market share 
     of a participating insurance company under subparagraph (A), 
     as necessary to reflect current market participation of that 
     participating insurance company.
       (5) NAIC.--The term ``NAIC'' means the National Association 
     of Insurance Commissioners.
       (6) Participating insurance company.--The term 
     ``participating insurance company'' means any insurance 
     company, including any subsidiary or affiliate thereof--
       (A) that--
       (i) is licensed or admitted to engage in the business of 
     providing primary insurance in any State, and was so licensed 
     or admitted on September 11, 2001, or had pending on that 
     date an application for such license or admission; or
       (ii) is not licensed or admitted as described in clause 
     (i), if it is an eligible surplus line carrier listed on the 
     Quarterly Listing of Alien Insurers of the NAIC, or any 
     successor thereto;
       (B) that receives direct premiums for any type of 
     commercial property and casualty insurance coverage or that, 
     not later than 21 days after the date of enactment of this 
     Act, submits written notification to the Secretary of its 
     intent to participate in the Program with regard to personal 
     lines of property and casualty insurance; and
       (C) that meets any other criteria that the Secretary may 
     reasonably prescribe.
       (7) Participating insurance company deductible.--The term 
     ``participating insurance company deductible'' means--
       (A) a participating insurance company's market share, 
     multiplied by $10,000,000,000, with respect to insured losses 
     resulting from an act of terrorism occurring during the 
     period beginning on the date of enactment of this Act and 
     ending at midnight on December 31, 2002; and
       (B) a participating insurance company's market share, 
     multiplied by $15,000,000,000, with respect to insured losses 
     resulting from an act of terrorism occurring during the 
     period beginning on January 1, 2003 and ending at midnight on 
     December 31, 2003, if the Program is extended in accordance 
     with section 6.

[[Page S364]]

       (8) Person.--The term ``person'' means any individual, 
     business or nonprofit entity (including those organized in 
     the form of a partnership, limited liability company, 
     corporation, or association), trust or estate, or a State or 
     political subdivision of a State or other governmental unit.
       (9) Program.--The term ``Program'' means the Terrorism 
     Insured Loss Shared Compensation Program established by this 
     Act.
       (10) Property and casualty insurance.--The term ``property 
     and casualty insurance''--
       (A) means commercial lines of property and casualty 
     insurance;
       (B) includes personal lines of property and casualty 
     insurance, if a notification is made in accordance with 
     paragraph (6)(B); and
       (C) does not include--
       (i) Federal crop insurance issued or reinsured under the 
     Federal Crop Insurance Act (7 U.S.C. 1501 et seq.); or
       (ii) private mortgage insurance, as that term is defined in 
     section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 
     4901).
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (12) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, American Samoa, Guam, and each of the United States 
     Virgin Islands.
       (13) United states.--The term ``United States'' means the 
     several States, and includes the territorial sea of the 
     United States.

     SEC. 4. TERRORISM INSURED LOSS SHARED COMPENSATION PROGRAM.

       (a) Establishment of Program.--
       (1) In general.--There is established in the Department of 
     the Treasury the Terrorism Insured Loss Shared Compensation 
     Program.
       (2) Authority of the secretary.--Notwithstanding any other 
     provision of State or Federal law, the Secretary shall 
     administer the Program, and shall pay the Federal share of 
     compensation for insured losses in accordance with subsection 
     (e).
       (b) Conditions for Federal Payments.--No payment may be 
     made by the Secretary under subsection (e), unless--
       (1) a person that suffers an insured loss, or a person 
     acting on behalf of that person, files a claim with a 
     participating insurance company;
       (2) the participating insurance company provides clear and 
     conspicuous disclosure to the policyholder of the premium 
     charged for insured losses covered by the Program and the 
     Federal share of compensation for insured losses under the 
     Program--
       (A) in the case of any policy covering an insured loss that 
     is issued on or after the date of enactment of this Act, in 
     the policy, at the time of offer, purchase, and renewal of 
     the policy; and
       (B) in the case of any policy that is issued before the 
     date of enactment of this Act, not later than 90 days after 
     that date of enactment;
       (3) the participating insurance company processes the claim 
     for the insured loss in accordance with its standard business 
     practices, and any reasonable procedures that the Secretary 
     may prescribe; and
       (4) the participating insurance company submits to the 
     Secretary, in accordance with such reasonable procedures as 
     the Secretary may establish--
       (A) a claim for payment of the Federal share of 
     compensation for insured losses under the Program;
       (B) written verification and certification--
       (i) of the underlying claim; and
       (ii) of all payments made for insured losses; and
       (C) certification of its compliance with the provisions of 
     this subsection.
       (c) Mandatory Participation; Mandatory Availability.--Each 
     insurance company that meets the definition of a 
     participating insurance company under section 3--
       (1) shall participate in the Program;
       (2) shall make available in all of its property and 
     casualty insurance policies (in all of its participating 
     lines), coverage for insured losses; and
       (3) shall make available property and casualty insurance 
     coverage for insured losses that does not differ materially 
     from the terms, amounts, and other coverage limitations 
     applicable to losses arising from events other than acts of 
     terrorism.
       (d) Participation by Self Insured Entities.--
       (1) Determination by the secretary.--The Secretary may, in 
     consultation with the NAIC, establish procedures to allow 
     participation in the Program by municipalities and other 
     governmental or quasi-governmental entities (and by any other 
     entity, as the Secretary deems appropriate) operating through 
     self insurance arrangements that were in existence on 
     September 11, 2001, but only if the Secretary makes a 
     determination with regard to participation by any such entity 
     before the occurrence of an act of terrorism in which the 
     entity incurs an insured loss.
       (2) Participation.--If the Secretary makes a determination 
     to allow an entity described in paragraph (1) to participate 
     in the Program, all reports, conditions, requirements, and 
     standards established by this Act for participating insurance 
     companies shall apply to any such entity, as determined to be 
     appropriate by the Secretary.
       (e) Shared Insurance Loss Coverage.--
       (1) Federal share.--
       (A) In general.--Subject to the cap on liability under 
     paragraph (2) and the limitation under paragraph (6), the 
     Federal share of compensation under the Program to be paid by 
     the Secretary for insured losses resulting from an act of 
     terrorism occurring during the period beginning on the date 
     of enactment of this Act and ending at midnight on December 
     31, 2002--
       (i) shall be equal to 80 percent of that portion of the 
     amount of aggregate insured losses that--

       (I) exceeds the participating insurance company deductibles 
     required to be paid for those insured losses; and
       (II) does not exceed $10,000,000,000; and

       (ii) shall be equal to 90 percent of that portion of the 
     amount of aggregate insured losses that--

       (I) exceeds the participating insurance company deductibles 
     required to be paid for those insured losses; and
       (II) exceeds $10,000,000,000.

       (B) Extension period.--If the Program is extended in 
     accordance with section 6, the Federal share of compensation 
     under the Program to be paid by the Secretary for insured 
     losses resulting from an act of terrorism occurring during 
     the period beginning on January 1, 2003 and ending at 
     midnight on December 31, 2003, shall be calculated in 
     accordance with clauses (i) and (ii) of subparagraph (A), 
     subject to the cap on liability in paragraph (2) and the 
     limitation under paragraph (6).
       (C) Pro rata share.--If, during the period described in 
     subparagraph (A) (or during the period described in 
     subparagraph (B), if the Program is extended in accordance 
     with section 6), the aggregate insured losses for that period 
     exceed $10,000,000,000, the Secretary shall determine the pro 
     rata share for each participating insurance company of the 
     Federal share of compensation for insured losses calculated 
     under subparagraph (A).
       (D) Prohibition on duplicative compensation.--The Federal 
     share of compensation for insured losses under the Program 
     shall be reduced by the amount of compensation provided by 
     the Federal Government for those insured losses under any 
     other Federal insurance or reinsurance program.
       (2) Cap on annual liability.--Notwithstanding paragraph 
     (1), or any other provision of Federal or State law, if the 
     aggregate insured losses exceed $100,000,000,000 during any 
     period referred to in subparagraph (A) or (B) of paragraph 
     (1)--
       (A) the Secretary shall not make any payment under this Act 
     for any portion of the amount of such losses that exceeds 
     $100,000,000,000; and
       (B) participating insurance companies shall not be liable 
     for the payment of any portion of the amount that exceeds 
     $100,000,000,000.
       (3) Notice to congress.--The Secretary shall notify the 
     Congress if estimated or actual aggregate insured losses 
     exceed $100,000,000,000 in any period described in paragraph 
     (1), and the Congress shall determine the procedures for and 
     the source of any such excess payments.
       (4) Final netting.--The Secretary shall have sole 
     discretion to determine the time at which claims relating to 
     any insured loss or act of terrorism shall become final.
       (5) Determinations final.--Any determination of the 
     Secretary under this subsection shall be final, and shall not 
     be subject to judicial review.
       (6) In-force reinsurance agreements.--For policies covered 
     by reinsurance contracts in force on the date of enactment of 
     this Act, until the in-force reinsurance contract is renewed, 
     amended, or has reached its 1-year anniversary date, any 
     Federal share of compensation due to a participating 
     insurance company for insured losses during the effective 
     period of the Program shall be shared--
       (A) with all reinsurance companies to which the 
     participating insurance company has ceded some share of the 
     insured loss pursuant to an in-force reinsurance contract; 
     and
       (B) in a manner that distributes the Federal share of 
     compensation for insured losses between the participating 
     insurance company and the reinsurance company or companies in 
     the same proportion as the insured losses would have been 
     distributed if the Program did not exist.

     SEC. 5. GENERAL AUTHORITY AND ADMINISTRATION OF CLAIMS.

       (a) General Authority.--The Secretary shall have the powers 
     and authorities necessary to carry out the Program, including 
     authority--
       (1) to investigate and audit all claims under the Program; 
     and
       (2) to prescribe regulations and procedures to implement 
     the Program.
       (b) Interim Rules and Procedures.--The Secretary shall 
     issue interim final rules or procedures specifying the manner 
     in which--
       (1) participating insurance companies may file, verify, and 
     certify claims under the Program;
       (2) the Secretary shall publish or otherwise publicly 
     announce the applicable percentage of insured losses that is 
     the responsibility of participating insurance companies and 
     the percentage that is the responsibility of the Federal 
     Government under the Program;
       (3) the Federal share of compensation for insured losses 
     will be paid under the Program, including payments based on 
     estimates of or actual aggregate insured losses;
       (4) the Secretary may, at any time, seek repayment from or 
     reimburse any participating insurance company, based on 
     estimates of insured losses under the Program,

[[Page S365]]

     to effectuate the insured loss sharing provisions contained 
     in section 4;
       (5) each participating insurance company that incurs 
     insured losses shall pay its pro rata share of insured 
     losses, in accordance with section 4; and
       (6) the Secretary will determine any final netting of 
     payments for actual insured losses under the Program, 
     including payments owed to the Federal Government from any 
     participating insurance company and any Federal share of 
     compensation for insured losses owed to any participating 
     insurance company, to effectuate the insured loss sharing 
     provisions contained in section 4.
       (c) Subrogation Rights.--The United States shall have the 
     right of subrogation with respect to any payment made by the 
     United States under the Program.
       (d) Contracts for Services.--The Secretary may employ 
     persons or contract for services, as may be necessary to 
     implement the Program.
       (e) Civil Penalties.--The Secretary may assess civil money 
     penalties for violations of this Act or any rule, regulation, 
     or order issued by the Secretary under this Act relating to 
     the submission of false or misleading information for 
     purposes of the Program, or any failure to repay any amount 
     required to be reimbursed under regulations or procedures 
     described in section 5(b). The authority granted under this 
     subsection shall continue during any period in which the 
     Secretary's authority under section 6(d) is in effect.

     SEC. 6. TERMINATION OF PROGRAM; DISCRETIONARY EXTENSION.

       (a) Termination of Program.--
       (1) In general.--The Program shall terminate at midnight on 
     December 31, 2002, unless the Secretary--
       (A) determines, after considering the report and finding 
     required by this section, that the Program should be extended 
     for one additional year, until midnight on December 31, 2003; 
     and
       (B) promptly notifies the Congress of such determination 
     and the reasons therefor.
       (2) Determination final.--The determination of the 
     Secretary under paragraph (1) shall be final, and shall not 
     be subject to judicial review.
       (3) Termination after extension.--If the Program is 
     extended under paragraph (1), the Program shall terminate at 
     midnight on December 31, 2003.
       (b) Report to Congress.--Not later than 9 months after the 
     date of enactment of this Act, the Secretary shall submit a 
     report to Congress--
       (1) regarding--
       (A) the availability of insurance coverage for acts of 
     terrorism;
       (B) the affordability of such coverage, including the 
     effect of such coverage on premiums; and
       (C) the capacity of the insurance industry to absorb future 
     losses resulting from acts of terrorism, taking into account 
     the profitability of the insurance industry; and
       (2) that considers--
       (A) the impact of the Program on each of the factors 
     described in paragraph (1); and
       (B) the probable impact on such factors and on the United 
     States economy if the Program terminates at midnight on 
     December 31, 2002.
       (c) Finding Required.--A determination under subsection (a) 
     to extend the Program shall be based on a finding by the 
     Secretary that--
       (1) widespread market uncertainties continue to disrupt the 
     ability of insurance companies to price insurance coverage 
     for losses resulting from acts of terrorism, thereby 
     resulting in the continuing unavailability of affordable 
     insurance for consumers; and
       (2) extending the Program for an additional year would 
     likely encourage economic stabilization and facilitate a 
     transition to a viable market for private terrorism risk 
     insurance.
       (d) Continuing Authority To Pay or Adjust Compensation.--
     Following the termination of the Program under subsection 
     (a), the Secretary may take such actions as may be necessary 
     to ensure payment, reimbursement, or adjustment of 
     compensation for insured losses arising out of any act of 
     terrorism occurring during the period in which the Program 
     was in effect under this Act, in accordance with the 
     provisions of section 4 and regulations promulgated 
     thereunder.
       (e) Repeal; Savings Clause.--This Act, other than section 
     10, is repealed at midnight on the final termination date of 
     the Program under subsection (a), except that such repeal 
     shall not be construed--
       (1) to prevent the Secretary from taking, or causing to be 
     taken, such actions under subsection (d) of this section and 
     sections 4(e)(4), 4(e)(5), 5(a)(1), 5(c), 5(d), and 5(e) (as 
     in effect on the day before the date of such repeal), and 
     applicable regulations promulgated thereunder, during any 
     period in which the authority of the Secretary under 
     subsection (d) of this section is in effect; or
       (2) to prevent the availability of funding under section 
     9(b) during any period in which the authority of the 
     Secretary under subsection (d) of this section is in effect.
       (f) Sense of the Congress.--It is the sense of the Congress 
     that the Secretary should make any determination under 
     subsection (a) in sufficient time to enable participating 
     insurance companies to include coverage for acts of terrorism 
     in their policies for 2003.
       (g) Study and Report on Scope of the Program.--
       (1) Study.--The Secretary, after consultation with the 
     NAIC, representatives of the insurance industry, and other 
     experts in the insurance field, shall conduct a study of the 
     potential effects of acts of terrorism on the availability of 
     life insurance and other lines of insurance coverage.
       (2) Report.--Not later than 9 months after the date of 
     enactment of this Act, the Secretary shall submit a report to 
     the Congress on the results of the study conducted under 
     paragraph (1).
       (h) Reports Regarding Terrorism Risk Insurance Premiums.--
       (1) Report to the naic.--Beginning 6 months after the date 
     of enactment of this Act, and every 6 months thereafter, each 
     participating insurance company shall submit a report to the 
     NAIC that states the premium rates charged by that 
     participating insurance company during the preceding 6-month 
     period for insured losses covered by the Program, and 
     includes an explanation of and justification for those rates.
       (2) Reports forwarded.--The NAIC shall promptly forward 
     copies of each report submitted under paragraph (1) to the 
     Secretary, the Secretary of Commerce, the Chairman of the 
     Federal Trade Commission, and the Comptroller General of the 
     United States.
       (3) Agency reports to congress.--
       (A) In general.--The Secretary, the Secretary of Commerce, 
     and the Chairman of the Federal Trade Commission shall submit 
     joint reports to Congress and the Comptroller General of the 
     United States summarizing and evaluating the reports 
     forwarded under paragraph (2).
       (B) Timing.--The reports required under subparagraph (A) 
     shall be submitted--
       (i) 9 months after the date of enactment of this Act; and
       (ii) 12 months after the date of submission of the first 
     report under clause (i).
       (4) GAO evaluation and report.--
       (A) Evaluation.--The Comptroller General of the United 
     States shall evaluate each report submitted under paragraph 
     (3), and upon request, the Secretary, the Secretary of 
     Commerce, the Chairman of the Federal Trade Commission, and 
     the NAIC shall provide to the Comptroller all documents, 
     records, and any other information that the Comptroller deems 
     necessary to carry out such evaluation.
       (B) Report to congress.--Not later than 90 days after 
     receipt of each report submitted under paragraph (3), the 
     Comptroller General of the United States shall submit to 
     Congress a report of the evaluation required by subparagraph 
     (A).
       (i) Study of Reserves for Certain Types of Insurance for 
     Terrorist or Other Catastrophic Events.--
       (1) In general.--The Secretary shall conduct a study of 
     issues relating to permitting insurance companies that 
     provide property and casualty insurance, life insurance, and 
     other lines of insurance coverage to establish deductible 
     reserves against losses for future acts of terrorism, 
     including--
       (A) whether such tax-favored reserves would promote--
       (i) insurance coverage of risks of terrorism; and
       (ii) the accumulation of additional resources needed to 
     satisfy potential claims resulting from such risks;
       (B) the lines of business for which such reserves would be 
     appropriate, including whether such reserves for property and 
     casualty insurance should be applied to personal or 
     commercial lines of business;
       (C) how the amount of such reserves would be determined;
       (D) how such reserves would be administered;
       (E) a comparison of the Federal tax treatment of such 
     reserves with other insurance reserves permitted under 
     Federal tax laws;
       (F) an analysis of the use of tax-favored reserves for 
     catastrophic events, including acts of terrorism, under the 
     tax laws of foreign countries; and
       (G) whether it would be appropriate to permit similar 
     reserves for other future catastrophic events, such as 
     natural disasters, taking into account the factors under the 
     preceding paragraphs.
       (2) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary shall submit a report to 
     Congress on the results of the study under paragraph (1), 
     together with recommendations for amending the Internal 
     Revenue Code of 1986, or other appropriate action.

     SEC. 7. PRESERVATION OF STATE LAW.

       Nothing in this Act shall affect the jurisdiction or 
     regulatory authority of the insurance commissioner (or any 
     agency or office performing like functions) of any State over 
     any participating insurance company or other person--
       (1) except as specifically provided in this Act; and
       (2) except that--
       (A) the definition of the term ``act of terrorism'' in 
     section 3 shall be the exclusive definition of that term for 
     purposes of compensation for insured losses under this Act, 
     and shall preempt any provision of State law that is 
     inconsistent with that definition, to the extent that such 
     provision of law would otherwise apply to any type of 
     insurance covered by this Act;
       (B) during the period beginning on the date of enactment of 
     this Act and ending at midnight on December 31, 2002, rates 
     for terrorism risk insurance covered by this Act and filed 
     with any State shall not be subject to prior approval or a 
     waiting period, under any law of a State that would otherwise 
     be applicable, except that nothing in this Act affects the 
     ability of any State to invalidate

[[Page S366]]

     a rate as excessive, inadequate, or unfairly discriminatory; 
     and
       (C) during the period beginning on the date of enactment of 
     this Act and for so long as the Program is in effect, as 
     provided in section 6 (including any period during which the 
     authority of the Secretary under section 6(d) is in effect), 
     books and records of any participating insurance company that 
     are relevant to the Program shall be provided, or caused to 
     be provided, to the Secretary or the designee of the 
     Secretary, upon request by the Secretary or such designee, 
     notwithstanding any provision of the laws of any State 
     prohibiting or limiting such access.

     SEC. 8. SENSE OF THE CONGRESS REGARDING CAPACITY BUILDING.

       It is the sense of the Congress that the insurance industry 
     should build capacity and aggregate risk to provide 
     affordable property and casualty insurance coverage for 
     terrorism risk.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS; PAYMENT AUTHORITY.

       (a) Administrative Expenses.--There are authorized to be 
     appropriated to the Secretary, out of funds in the Treasury 
     not otherwise appropriated, such sums as may be necessary for 
     administrative expenses of the Program, to remain available 
     until expended.
       (b) Payment Authority.--This Act constitutes payment 
     authority in advance of appropriation Acts, and represents 
     the obligation of the Federal Government to provide for the 
     Federal share of compensation for insured losses under the 
     Program.

     SEC. 10. PROCEDURES FOR CIVIL ACTIONS.

       (a) Federal Cause of Action.--
       (1) In general.--There shall exist a Federal cause of 
     action for property damage, personal injury, or death arising 
     out of or resulting from an act of terrorism, which shall be 
     the exclusive cause of action and remedy for claims for such 
     property damage, personal injury, or death, except as 
     provided in subsection (d).
       (2) Preemption of state actions.--All State causes of 
     action of any kind for property damage, personal injury, or 
     death arising out of or resulting from an act of terrorism 
     that are otherwise available under State law, are hereby 
     preempted, except as provided in subsection (d).
       (b) Governing Law.--The substantive law for decision in an 
     action described in subsection (a)(1) shall be derived from 
     the law, including applicable choice of law principles, of 
     the State in which the act of terrorism giving rise to the 
     action occurred, except to the extent that--
       (1) the law, including choice of law principles, of another 
     State is determined to be applicable to the action by the 
     district court hearing the action; or
       (2) otherwise applicable State law (including that 
     determined pursuant to paragraph (1), is inconsistent with or 
     otherwise preempted by Federal law.
       (c) Punitive Damages.--Any amounts awarded in a civil 
     action described in subsection (a)(1) that are attributable 
     to punitive damages shall not count as insured losses for 
     purposes of this Act.
       (d) Claims Against Terrorists.--Nothing in this section 
     shall in any way be construed to limit the ability of any 
     plaintiff to seek any form of recovery from any person, 
     government, or other entity that was a participant in, or 
     aider and abettor of, any act of terrorism.
       (e) Effective Period.--This section shall apply only to 
     actions described in subsection (a)(1) arising out of or 
     resulting from acts of terrorism that occur during the 
     effective period of the Program, including, if applicable, 
     any extension period provided for under section 6.
                                  ____

  SA 2795. Mr. BOND submitted an amendment intended to be proposed by 
him to the bill H.R. 622 to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end, add the following:

     SEC. __. TREATMENT OF CERTAIN INDIVIDUALS PERFORMING SERVICES 
                   IN CERTAIN HAZARDOUS DUTY AREAS.

       (a) General Rule.--For purposes of the following provisions 
     of the Internal Revenue Code of 1986, a qualified hazardous 
     duty area shall be treated in the same manner as if it were a 
     combat zone (as determined under section 112 of such Code):
       (1) Section 2(a)(3) (relating to special rule where 
     deceased spouse was in missing status).
       (2) Section 112 (relating to the exclusion of certain 
     combat pay of members of the Armed Forces).
       (3) Section 692 (relating to income taxes of members of 
     Armed Forces and victims of certain terrorist attacks on 
     death).
       (4) Section 2201 (relating to combat zone-related deaths of 
     members of the Armed Forces and deaths of victims of certain 
     terrorist attacks).
       (5) Section 3401(a)(1) (defining wages relating to combat 
     pay for members of the Armed Forces).
       (6) Section 4253(d) (relating to the taxation of phone 
     service originating from a combat zone from members of the 
     Armed Forces).
       (7) Section 6013(f)(1) (relating to joint return where 
     individual is in missing status).
       (8) Section 7508 (relating to time for performing certain 
     acts postponed by reason of service in combat zone).
       (b) Qualified Hazardous Duty Area.--For purposes of this 
     section, the term ``qualified hazardous duty area'' means 
     Somalia, if for the period beginning on December 3, 1992, and 
     ending before March 31, 1995, any member of the Armed Forces 
     of the United States was entitled to special pay under 
     section 310 of title 37, United States Code (relating to 
     special pay; duty subject to hostile fire or imminent danger) 
     for services performed in such country. Such term includes 
     such country only during the period such entitlement was in 
     effect.
       (c) Effective Date; Special Rule.--
       (1) Effective date.--The provisions of this section shall 
     take effect on the date of the enactment of this Act.
       (2) Special rule.--If refund or credit of any overpayment 
     of tax resulting from the application of this section is 
     prevented at any time on or before April 15, 2003, by the 
     operation of any law or rule of law (including res judicata), 
     refund or credit of such overpayment (to the extent 
     attributable to the application of this section) may, 
     nevertheless, be made or allowed if claim therefor is filed 
     on or before April 15, 2003.
                                  ____

  SA 2796. Mr. BUNNING submitted an amendment intended to be proposed 
to amendment SA 2698 submitted by Mr. Daschle and intended to be 
proposed to the bill (H.R. 622) to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the end of title V add the following:

     SEC. __. EXCLUSION FOR FOSTER CARE PAYMENTS TO APPLY TO 
                   PAYMENTS BY QUALIFIED PLACEMENT AGENCIES.

       (a) In General.--The matter preceding subparagraph (B) of 
     section 131(b)(1) (defining qualified foster care payment) is 
     amended to read as follows:
       ``(1) In general.--The term `qualified foster care payment' 
     means any payment made pursuant to a foster care program of a 
     State or political subdivision thereof--
       ``(A) which is paid by--
       ``(i) a State or political subdivision thereof, or
       ``(ii) a qualified foster care placement agency, and''.
       (b) Qualified Foster Individuals To Include Individuals 
     Placed by Qualified Placement Agencies.--Subparagraph (B) of 
     section 131(b)(2) (defining qualified foster individual) is 
     amended to read as follows:
       ``(B) a qualified foster care placement agency.''
       (c) Qualified Foster Care Placement Agency Defined.--
     Subsection (b) of section 131 is amended by redesignating 
     paragraph (3) as paragraph (4) and by inserting after 
     paragraph (2) the following new paragraph:
       ``(3) Qualified foster care placement agency.--The term 
     `qualified foster care placement agency' means any placement 
     agency which is licensed or certified by--
       ``(A) a State or political subdivision thereof, or
       ``(B) an entity designated by a State or political 
     subdivision thereof,

     for the foster care program of such State or political 
     subdivision to make foster care payments to providers of 
     foster care.''
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                  ____

  SA 2797. Mr. BOND submitted an amendment intended to be proposed to 
amendment SA 2698 submitted by Mr. Daschle and intended to be proposed 
to the bill (H.R. 622) to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end, add the following:

     SEC. __. TREATMENT OF CERTAIN INDIVIDUALS PERFORMING SERVICES 
                   IN CERTAIN HAZARDOUS DUTY AREAS.

       (a) General Rule.--For purposes of the following provisions 
     of the Internal Revenue Code of 1986, a qualified hazardous 
     duty area shall be treated in the same manner as if it were a 
     combat zone (as determined under section 112 of such Code):
       (1) Section 2(a)(3) (relating to special rule where 
     deceased spouse was in missing status).
       (2) Section 112 (relating to the exclusion of certain 
     combat pay of members of the Armed Forces).
       (3) Section 692 (relating to income taxes of members of 
     Armed Forces and victims of certain terrorist attacks on 
     death).
       (4) Section 2201 (relating to combat zone-related deaths of 
     members of the Armed Forces and deaths of victims of certain 
     terrorist attacks).
       (5) Section 3401(a)(1) (defining wages relating to combat 
     pay for members of the Armed Forces).
       (6) Section 4253(d) (relating to the taxation of phone 
     service originating from a combat zone from members of the 
     Armed Forces).
       (7) Section 6013(f)(1) (relating to joint return where 
     individual is in missing status).
       (8) Section 7508 (relating to time for performing certain 
     acts postponed by reason of service in combat zone).
       (b) Qualified Hazardous Duty Area.--For purposes of this 
     section, the term ``qualified hazardous duty area'' means 
     Somalia, if for the period beginning on December 3, 1992, and 
     ending before March 31, 1995, any member of the Armed Forces 
     of the United States was entitled to special pay under 
     section 310

[[Page S367]]

     of title 37, United States Code (relating to special pay; 
     duty subject to hostile fire or imminent danger) for services 
     performed in such country. Such term includes such country 
     only during the period such entitlement was in effect.
       (c) Effective Date; Special Rule.--
       (1) Effective date.--The provisions of this section shall 
     take effect on the date of the enactment of this Act.
       (2) Special rule.--If refund or credit of any overpayment 
     of tax resulting from the application of this section is 
     prevented at any time on or before April 15, 2003, by the 
     operation of any law or rule of law (including res judicata), 
     refund or credit of such overpayment (to the extent 
     attributable to the application of this section) may, 
     nevertheless, be made or allowed if claim therefor is filed 
     on or before April 15, 2003.
                                  ____

  SA 2798. Mr. GRAHAM submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end of the bill insert the following:

                 TITLE __--TRAVEL AND TOURISM PROMOTION

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``Rediscover America Act of 
     2002''.

     SEC. __02. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) the revitalization of the travel and tourism industry 
     following the September 11, 2001, terrorist attacks on the 
     United States is a national economic necessity;
       (2) in light of the effect that the attacks have had on the 
     tourism industry, it is important to put measures immediately 
     into place to restore consumer confidence in travel and in 
     the economy;
       (3) safety and security in travel is of utmost importance 
     in order to restore consumer confidence in the industry;
       (4) the travel and tourism industry has a large impact on 
     the U.S. economy--adding nearly 5 percent to the GDP, 
     generating more than $578,000,000 in revenues, supporting 
     more than 17,000,000 million jobs, and providing a 
     $14,000,000 trade surplus for the country; and
       (5) more than 95 percent of the businesses in travel and 
     tourism are small to medium sized enterprises.
       (b) Purpose.--The purpose of this title is to assist the 
     travel and tourism industry in its effort to restore consumer 
     confidence in the wake of the September 11, 2001, terrorist 
     attacks on the United States.

     SEC. __03. UNITED STATES TRAVEL AND TOURISM PROMOTION BUREAU.

       (a) Establishment.--The Secretary of Commerce shall 
     designate an employee of the Department of Commerce to be 
     responsible for establishing a Travel and Tourism Promotion 
     Board.
       (b) Purpose.--The Bureau shall--
       (1) work to help restore consumer confidence in travel in 
     the two years following the September 11, 2001, terrorist 
     attacks on the United States; and
       (2) work in conjunction with private industry and industry 
     employee representatives to design and implement public 
     service announcements and advertising to promote tourism, 
     encouraging Americans and foreign visitors to rediscover the 
     nation's treasures.
       (c) Powers.--To carry out the purposes of this title, the 
     Bureau may--
       (1) distribute funds to any travel and tourism related 
     organization or association;
       (2) enter into contracts with private organizations or 
     business;
       (3) utilize up to three existing employees of the 
     Department of Commerce, as may be assigned by the Secretary; 
     and
       (4) conduct any and all acts necessary and proper to carry 
     out the purposes of this title.

     SEC. __04. UNITED STATES TRAVEL AND TOURISM PROMOTION BUREAU 
                   ADVISORY COMMITTEE.

       (a) Establishment.--There is established a United States 
     Travel and Tourism Promotion Bureau Advisory Committee for 
     the purpose of recommending activities to the Bureau.
       (b) Members.--Within 30 days after enactment of this Act, 
     the Secretary of Commerce shall appoint the members of the 
     Advisory Committee as follows:
       (1) 1 member representing the aviation industry;
       (2) 1 member representing airline workers;
       (3) 1 member representing the hotel industry;
       (4) 1 member representing hotel workers;
       (5) 1 member representing the restaurant industry;
       (6) 1 member representing restaurant workers;
       (7) 1 member representing amusement parks; and
       (8) 1 member of the Rural Tourism Foundation;
       (c) Chair.--The Advisory Committee shall elect a Chair for 
     an initial term of 6 months. After such initial term, the 
     Chair shall be elected for such term as the Committee may 
     designate.
       (d) Vacancies.--If a vacancy occurs in the membership of 
     the Committee, the Secretary of Commerce shall fill the 
     vacancy, provided that the membership of the Committee 
     remains consistent with subsection (b).

     SEC. __05. QUARTERLY REPORTING PROVISION.

       Not less than once every 90 days, the Bureau shall report 
     to the U.S. Senate Committee on Commerce, Science and 
     Transportation and the U.S. House of Representatives 
     Committee on Energy and Commerce on--
       (1) the Bureau's activities to promote travel and tourism; 
     and
       (2) the state of the travel and tourism industry.

     SEC. __06. SUNSET.

       The provisions of this title shall terminate two years 
     after the date of enactment of this Act.

     SEC. __07. AUTHORIZATION OF APPROPRIATIONS.

       (a) Appropriation.--Of the funds provided in Public Law 
     107-38, not less than $60,000,000 shall be used for the 
     purpose of carrying out this title.
       (b) Availability of Funds.--The funds made available 
     pursuant to subsection (a) shall be available to be expended 
     in fiscal years 2002, 2003, and 2004.
                                  ____

  SA 2799. Mr. GRAHAM submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end, add the following:

     SEC.  . METHOD OF ACCOUNTING FOR DEPOSITS RECEIVED BY ACCRUAL 
                   BASIS TOUR OPERATORS.

       In the case of a tour operator using an accrual method of 
     accounting, amounts received from or on behalf of passengers 
     in advance of the departure of a tour arranged by such 
     operator--
       (1) shall be treated as properly accounted for under the 
     Internal Revenue Code of 1986 if they are accounted for under 
     a method permitted by section 3 of Revenue Procedure 71-21, 
     and
       (2) for purposes of Revenue Procedure 71-21, shall be 
     deemed earned as of the date the tour departs.
                                  ____

  SA 2800. Mr. FRIST submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end add the following:

     SEC. __. ACCESS TO UNUSED ACCOUNT BALANCES IN FLEXIBLE 
                   SPENDING ARRANGEMENTS BY INVOLUNTARILY 
                   SEPARATED EMPLOYEES.

       (a) In General.--Section 125 of the Internal Revenue Code 
     of 1986 (relating to cafeteria plans) is amended by 
     redesignating subsections (h) and (i) as subsections (i) and 
     (j), respectively, and by inserting after subsection (g) the 
     following:
       ``(h) Access to Unused Account Balance in FSA by Certain 
     Involuntarily Separated Employees.--
       ``(1) In general.--For purposes of this title, a plan or 
     other arrangement shall not fail to be treated as a flexible 
     spending or similar arrangement solely because under such 
     arrangement an individual (or any designated heir of such 
     individual) during a qualified period has the option of--
       ``(A) receiving as a cash payment any unused account 
     balance in such arrangement with respect to such individual 
     remaining on the date of an involuntary separation of 
     employment, the receipt of which is includible in gross 
     income, or
       ``(B) applying such unused account balance to the payment 
     of any premium for health insurance coverage of such 
     individual (including any premium required for coverage 
     described in section 4980B(f)) in the same manner as the 
     payment of any allowable expense under such arrangement prior 
     to such qualified period, the receipt of which is not 
     includible in gross income.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Involuntary separation from employment.--The term 
     `involuntary separation from employment' includes separation 
     caused by disability or death.
       ``(B) Qualified period.--The term `qualified period' means 
     a period beginning on the date of an involuntary separation 
     from employment and ending on the earlier of--
       ``(i) the date which is 60 days after such date of 
     involuntary separation, or
       ``(ii) the last day of the calendar year in which such date 
     of involuntary separation occurs.
       ``(C) Unused account balance.--The term `unused account 
     balance' means the excess (if any) of--
       ``(i) an amount equal to--

       ``(I) \1/12\ of the agreed upon foregone remuneration of 
     the individual for the calendar year under a flexible 
     spending or similar arrangement, times
       ``(II) the number of months in such calendar year ending 
     with the month in which the date of the involuntary 
     separation from employment of such individual occurs, over

       ``(ii) the amount of allowable expenses of such individual 
     for such calendar year paid or accrued under such arrangement 
     prior to such date.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to involuntary separations after December 31, 
     2001.
                                  ____

  SA 2801. Mr. SCHUMER (for himself, and Mrs. Clinton) submitted an 
amendment intended to be proposed by him to the bill H.R. 622, to amend 
the

[[Page S368]]

Internal Revenue Code of 1986 to expand the adoption credit, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

               TITLE VI--TAX INCENTIVES FOR NEW YORK CITY

     SEC. 601. TAX BENEFITS FOR AREA OF NEW YORK CITY DAMAGED IN 
                   TERRORIST ATTACKS ON SEPTEMBER 11, 2001.

       (a) In General.--Chapter 1 is amended by adding at the end 
     the following new subchapter:

             ``Subchapter Y--New York Liberty Zone Benefits

``Sec. 1400L. Tax benefits for New York Liberty Zone.

     ``SEC. 1400L. TAX BENEFITS FOR NEW YORK LIBERTY ZONE.

       ``(a) Expansion of Work Opportunity Tax Credit.--
       ``(1) In general.--For purposes of section 51, a New York 
     Liberty Zone business employee shall be treated as a member 
     of a targeted group.
       ``(2) New york liberty zone business employee.--For 
     purposes of this subsection--
       ``(A) In general.--The term `New York Liberty Zone business 
     employee' means, with respect to any taxable year which 
     includes any portion of the period beginning after September 
     10, 2001, and ending before January 1, 2004, any employee of 
     a New York Liberty Zone business if--
       ``(i) substantially all the services performed during such 
     portion of such taxable year by such employee for such 
     business are performed in an area described in subparagraph 
     (B) in a trade or business of such business,
       ``(ii) the annual rate of remuneration received by such 
     employee for such services during such portion of such 
     taxable year does not exceed $200,000, and
       ``(iii) with respect to any employee of such business 
     described in subparagraph (B)(i)(II), such employee is 
     designated by such business as a New York Liberty Zone 
     business employee for purposes of this subsection, except 
     that the total employees so designated for any taxable year 
     shall not exceed the lesser of 250 employees or the excess 
     of--

       ``(I) the number of employees of such business on September 
     11, 2001, in the New York Liberty Zone, over
       ``(II) the number of employees of such business treated as 
     New York Liberty Zone business employees for such taxable 
     year with respect to any business located in the New York 
     Liberty Zone.

     The Secretary may require any business to have the number 
     determined under clause (iii)(I) verified by the New York 
     State Department of Labor.
       ``(B) New york liberty zone business.--The term `New York 
     Liberty Zone business' means any business which is--
       ``(i) located in the New York Liberty Zone, or
       ``(ii) located in the City of New York, New York, outside 
     the New York Liberty Zone, as the result of the physical 
     destruction or damage of such place of business by the 
     September 11, 2001, terrorist attack.
       ``(C) Special rules for determining amount of credit.--For 
     purposes of applying subpart E of part IV of subchapter B of 
     this chapter to wages paid or incurred to any New York 
     Liberty Zone business employee--
       ``(i) section 51(a) shall be applied by substituting 
     `qualified wages' for `qualified first-year wages',
       ``(ii) the rules of section 52 shall apply for purposes of 
     determining the number of employees under subparagraph 
     (A)(iii),
       ``(iii) subsections (c)(4) and (i)(2) of section 51 shall 
     not apply, and
       ``(iv) in determining qualified wages, the following shall 
     apply in lieu of section 51(b):

       ``(I) Qualified wages.--The term `qualified wages' means 
     the wages paid or incurred by the employer for work performed 
     during the period beginning on September 11, 2001, and ending 
     on December 31, 2004, to individuals who are New York Liberty 
     Zone business employees of such employer.
       ``(II) Only first $6,000 of wages per taxable year taken 
     into account.--The amount of the qualified wages which may be 
     taken into account with respect to any individual shall not 
     exceed $6,000 per taxable year of the employer.

       ``(b) Special Allowance for Certain Property Acquired After 
     September 10, 2001.--
       ``(1) Additional allowance.--In the case of any qualified 
     New York Liberty Zone 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 30 percent of the 
     adjusted basis of such property, and
       ``(B) the adjusted basis of the qualified New York Liberty 
     Zone 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 new york liberty zone property.--For 
     purposes of this subsection--
       ``(A) In general.--The term `qualified New York Liberty 
     Zone 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,
       ``(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, or
       ``(III) which is nonresidential real property or 
     residential rental property which is described in 
     subparagraph (B),
       ``(ii) substantially all of the use of which is in the New 
     York Liberty Zone and is in the active conduct of a trade or 
     business by the taxpayer in such Zone,
       ``(iii) the original use of which in the New York Liberty 
     Zone commences with the taxpayer after September 10, 2001,
       ``(iv) which is acquired by the taxpayer by purchase (as 
     defined in section 179(d)) after September 10, 2001, but only 
     if no written binding contract for the acquisition was in 
     effect before September 11, 2001, and6
       ``(v) which is placed in service by the taxpayer on or 
     before the termination date.

     The term `termination date' means December 31, 2006 (December 
     31, 2009, in the case of nonresidential real property and 
     residential rental property).
       ``(B) Eligible real property.--Nonresidential real property 
     or residential rental property is described in this 
     subparagraph if it rehabilitates property damaged, or 
     replaces property destroyed or condemned, as a result of the 
     September 11, 2001, terrorist attack. For purposes of the 
     preceding sentence, property shall be treated as replacing 
     property so destroyed if, as part of an integrated plan, such 
     property replaces property which is included in a continuous 
     area which includes property so destroyed.
       ``(C) Exceptions.--
       ``(i) Alternative depreciation property.--The term 
     `qualified New York Liberty Zone property' shall not include 
     any property to which the alternative depreciation system 
     under section 168(g) applies, determined--

       ``(I) without regard to paragraph (7) of section 168(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.
       ``(D) 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 (iv) of 
     subparagraph (A) shall be treated as met if the taxpayer 
     begins manufacturing, constructing, or producing the property 
     after September 10, 2001, and before the termination date.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(iii), 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).
       ``(E) Allowance against alternative minimum tax.--The 
     deduction allowed by this subsection shall be allowed in 
     determining alternative minimum taxable income under section 
     55.
       ``(c) Tax-Exempt Bond Financing.--
       ``(1) In general.--For purposes of this title, any 
     qualified New York Liberty Bond shall be treated as an exempt 
     facility bond.
       ``(2) Qualified new york liberty bond.--For purposes of 
     this subsection, the term `qualified New York Liberty Bond' 
     means any bond issued as part of an issue if--
       ``(A) 95 percent or more of the net proceeds (as defined in 
     section 150(a)(3)) of such issue are to be used for qualified 
     project costs,
       ``(B) such bond is issued by the State of New York or any 
     political subdivision thereof (or any agency, instrumentality 
     or constituted authority on behalf thereof),
       ``(C) the Governor of the State of New York or the Mayor of 
     the City of New York, designates such bond for purposes of 
     this section, and
       ``(D) such bond is issued during calendar year 2002, 2003, 
     or 2004.
       ``(3) Limitations on amount of bonds.--
       ``(A) Aggregate amount designated.--The maximum aggregate 
     face amount of bonds which may be designated under this 
     subsection shall not exceed $8,000,000,000, of which not to 
     exceed $4,000,000,000 may be designated by the Governor of 
     the State of New York and not to exceed $4,000,000,000 may be 
     designated by the Mayor of the City of New York.
       ``(B) Specific limitations.--The aggregate face amount of 
     bonds issued which are to be used for--
       ``(i) costs for property located outside the New York 
     Liberty Zone shall not exceed $2,000,000,000,
       ``(ii) costs with respect to residential property--

       ``(I) shall not exceed $1,600,000,000, and
       ``(II) shall not include, on a project by project basis, 
     per-unit qualified project costs that exceed the maximum per-
     unit allowable costs within the discretionary authority of 
     the Secretary of Housing and Urban Development under section 
     221(a)(3)(ii) of the National Housing Act (12 U.S.C. 
     17151(d)(3)(ii)), and

       ``(iii) costs with respect to property used for retail 
     sales of tangible property and functionally related and 
     subordinate property shall not exceed $800,000,000.


[[Page S369]]


     The limitations under clauses (i), (ii), and (iii) shall be 
     applied proportionately to the bonds designated under this 
     subsection by the Governor of the State of New York and the 
     Mayor of the City of New York.
       ``(C) Movable property.--No bonds shall be issued which are 
     to be used for movable fixtures and equipment.
       ``(4) Qualified project costs.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified project costs' means 
     the cost of acquisition, construction, reconstruction, 
     rehabilitation, and renovation of--
       ``(i) nonresidential real property and residential property 
     (including fixed tenant improvements associated with such 
     property) located in the New York Liberty Zone, and
       ``(ii) public utility property (as defined in section 
     168(i)(10)) located in the New York Liberty Zone.
       ``(B) Costs for certain property outside zone included.--
     Such term includes the cost of acquisition, construction, 
     reconstruction, and renovation of nonresidential real 
     property (including fixed tenant improvements associated with 
     such property) located outside the New York Liberty Zone but 
     within the City of New York, New York, if--
       ``(i) such property is part of a project which consists of 
     at least 100,000 square feet of usable office or other 
     commercial space located in a single building or multiple 
     adjacent buildings, or
       ``(ii) such property consists of electric generation 
     facilities of not more than 150 mw to provide additional 
     energy capacity in the New York Liberty Zone.
       ``(5) Special rules.--In applying this title to any 
     qualified New York Liberty Bond, the following modifications 
     shall apply:
       ``(A) Section 146 (relating to volume caps) shall not 
     apply.
       ``(B) Section 147(d) (relating to acquisition of existing 
     property not permitted) shall be applied by substituting `50 
     percent' for `15 percent' each place it appears.
       ``(C) Section 148(f)(4)(C) (relating to exception from 
     rebate for certain proceeds to be used to finance 
     construction expenditures) shall apply to the available 
     construction proceeds of bonds issued under this section.
       ``(D) Repayments of principal on financing provided by the 
     issue--
       ``(i) may not be used to provide financing, and
       ``(ii) must be used not later than the close of the 1st 
     semiannual period beginning after the date of the repayment 
     to redeem bonds which are part of such issue.

     The requirement of clause (ii) shall be treated as met with 
     respect to amounts received within 10 years after the date of 
     issuance of the issue (or, in the case of refunding bond, the 
     date of issuance of the original bond) if such amounts are 
     used by the close of such 10 years to redeem bonds which are 
     part of such issue.
       ``(E) Section 57(a)(5) shall not apply.
       ``(6) Separate issue treatment of portions of an issue.--
     This subsection shall not apply to the portion of an issue 
     which (if issued as a separate issue) would be treated as a 
     qualified bond or as a bond that is not a private activity 
     bond (determined without regard to paragraph (1)), if the 
     issuer elects to so treat such portion.
       ``(d) Advance Refundings of Certain Tax-Exempt Bonds.--
       ``(1) In general.--With respect to a bond described in 
     paragraph (2) issued as part of an issue 90 percent (95 
     percent in the case of a bond described in paragraph (2)(C)) 
     or more of the net proceeds (as defined in section 150(a)(3)) 
     of which were used to finance facilities located within the 
     City of New York, New York (or functionally related and 
     subordinate to such facilities for the furnishing of water), 
     one additional advanced refunding after December 31, 2001, 
     and before January 1, 2005, shall be allowed under the 
     applicable rules of section 149(d) if the requirements of 
     paragraphs (3) and (4) are met.
       ``(2) Bonds described.--A bond is described in this 
     paragraph if such bond was outstanding on September 11, 2001, 
     and is--
       ``(A) a State or local bond (as defined in section 
     103(c)(1)) which is a general obligation of the City of New 
     York, New York,
       ``(B) a State or local bond (as so defined) other than a 
     private activity bond (as defined in section 141(a)) issued 
     by the New York City Municipal Water Finance Authority or the 
     Metropolitan Transportation Authority (MTA) of the State of 
     New York, or
       ``(C) a qualified 501(c)(3) bond (as defined in section 
     145(a)) which is a qualified hospital bond (as defined in 
     section 145(c)) issued by or on behalf of either the State of 
     New York or the City of New York, New York, or political 
     subdivisions, agencies, or instrumentalities thereof.
       ``(3) Approval; aggregate limit.--Paragraph (1) shall not 
     apply to the advance refunding of any bond--
       ``(A) unless Governor of the State of New York or the Mayor 
     of the City of New York designates the bond for purposes of 
     this subsection, and
       ``(B) to the extent the aggregate face amount of the 
     advance refunding bond, when added to the aggregate face 
     amount of advance refunding bonds previously issued under 
     this subsection, exceeds $9,000,000,000.

     The limitation under subparagraph (B) shall be applied 
     equally between the bonds designated under subparagraph (A) 
     by the Governor of the State of New York and by the Mayor of 
     the City of New York.
       ``(4) Additional requirements.--The requirements of this 
     paragraph are met if--
       ``(A) all advance refundings of a bond described in 
     paragraph (2) allowed under any provision of law other than 
     the advance refunding allowed under paragraph (1) were 
     utilized before September 12, 2001,
       ``(B) the advance refunding bond allowed under paragraph 
     (1) is the only other outstanding bond with respect to the 
     refunded bond described in paragraph (2), and
       ``(C) the requirements of section 148 are met with respect 
     to all bonds issued under this subsection.
       ``(e) Increase in Expensing Under Section 179.--
       ``(1) In general.--For purposes of section 179--
       ``(A) the limitation under section 179(b)(1) shall be 
     increased by the lesser of--
       ``(i) $35,000, or
       ``(ii) the cost of section 179 property which is qualified 
     New York Liberty Zone property placed in service during the 
     taxable year, and
       ``(B) the amount taken into account under section 179(b)(2) 
     with respect to any section 179 property which is qualified 
     New York Liberty Zone property shall be 50 percent of the 
     cost thereof.
       ``(2) Qualified new york liberty zone property.--For 
     purposes of this subsection, the term `qualified New York 
     Liberty Zone property' has the meaning given such term by 
     subsection (b)(2).
       ``(3) Recapture.--Rules similar to the rules under section 
     179(d)(10) shall apply with respect to any qualified New York 
     Liberty Zone property which ceases to be used in the New York 
     Liberty Zone.
       ``(f) Extension of Replacement Period for Nonrecognition of 
     Gain.--Notwithstanding subsections (g) and (h) of section 
     1033, clause (i) of section 1033(a)(2)(B) shall be applied by 
     substituting `5 years' for `2 years' with respect to property 
     which is compulsorily or involuntarily converted as a result 
     of the terrorist attacks on September 11, 2001, in the New 
     York Liberty Zone but only if substantially all of the use of 
     the replacement property is in the City of New York, New 
     York.
       ``(g) New York Liberty Zone.--For purposes of this section, 
     the term `New York Liberty Zone' means the area located on or 
     south of Canal Street, East Broadway (east of its 
     intersection with Canal Street), or Grand Street (east of its 
     intersection with East Broadway) in the Borough of Manhattan 
     in the City of New York, New York.''.
       (b) Credit Allowed Against Regular and Minimum Tax.--
       (1) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax) is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) Special rules for new york liberty zone business 
     employee credit.--
       ``(A) In general.--In the case of the New York Liberty Zone 
     business employee credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credit, and
       ``(ii) in applying paragraph (1) to such credit--

       ``(I) the tentative minimum tax shall be treated as being 
     zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the New York 
     Liberty Zone business employee credit).

       ``(B) New york liberty zone business employee credit.--For 
     purposes of this subsection, the term `New York Liberty Zone 
     business employee credit' means the portion of work 
     opportunity credit under section 51 determined under section 
     1400L(a).''.
       (2) Conforming amendment.--Subclause (II) of section 
     38(c)(2)(A)(ii) is amended by inserting ``or the New York 
     Liberty Zone business employee credit'' after ``employment 
     credit''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending after September 11, 2001.
       (c) Clerical Amendment.--The table of subchapters for 
     chapter 1 is amended by adding at the end the following new 
     item:

``Subchapter Y--New York Liberty Zone Benefits.''.
                                  ____

  SA 2802. Mr. CRAIG submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. EXPANSION OF AVAILABILITY OF ARCHER MEDICAL SAVINGS 
                   ACCOUNTS.

       (a) Repeal of Limitations on Number of Medical Savings 
     Accounts.--
       (1) In general.--Subsections (i) and (j) of section 220 of 
     the Internal Revenue Code of 1986 are hereby repealed.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 220(c) of such Code is amended 
     by striking subparagraph (D).
       (B) Section 138 of such Code is amended by striking 
     subsection (f).
       (b) Availability Not Limited to Accounts for Employees of 
     Small Employers and Self-Employed Individuals.--
       (1) In general.--Subparagraph (A) of section 220(c)(1) of 
     such Code (relating to eligible individual) is amended to 
     read as follows:

[[Page S370]]

       ``(A) In general.--The term `eligible individual' means, 
     with respect to any month, any individual if--
       ``(i) such individual is covered under a high deductible 
     health plan as of the 1st day of such month, and
       ``(ii) such individual is not, while covered under a high 
     deductible health plan, covered under any health plan--

       ``(I) which is not a high deductible health plan, and
       ``(II) which provides coverage for any benefit which is 
     covered under the high deductible health plan.''.

       (2) Conforming amendments.--
       (A) Section 220(c)(1) of such Code is amended by striking 
     subparagraph (C).
       (B) Section 220(c) of such Code is amended by striking 
     paragraph (4) (defining small employer) and by redesignating 
     paragraph (5) as paragraph (4).
       (C) Section 220(b) of such Code is amended by striking 
     paragraph (4) (relating to deduction limited by compensation) 
     and by redesignating paragraphs (5), (6), and (7) as 
     paragraphs (4), (5), and (6), respectively.
       (c) Increase in Amount of Deduction Allowed for 
     Contributions to Medical Savings Accounts.--
       (1) In general.--Paragraph (2) of section 220(b) of such 
     Code is amended to read as follows:
       ``(2) Monthly limitation.--The monthly limitation for any 
     month is the amount equal to \1/12\ of the annual deductible 
     (as of the first day of such month) of the individual's 
     coverage under the high deductible health plan.''.
       (2) Conforming amendment.--Clause (ii) of section 
     220(d)(1)(A) of such Code is amended by striking ``75 percent 
     of''.
       (d) Both Employers and Employees May Contribute to Medical 
     Savings Accounts.--Paragraph (4) of section 220(b) of such 
     Code (as redesignated by subsection (b)(2)(C)) is amended to 
     read as follows:
       ``(4) Coordination with exclusion for employer 
     contributions.--The limitation which would (but for this 
     paragraph) apply under this subsection to the taxpayer for 
     any taxable year shall be reduced (but not below zero) by the 
     amount which would (but for section 106(b)) be includible in 
     the taxpayer's gross income for such taxable year.''.
       (e) Reduction of Permitted Deductibles Under High 
     Deductible Health Plans.--
       (1) In general.--Subparagraph (A) of section 220(c)(2) of 
     such Code (defining high deductible health plan) is amended--
       (A) by striking ``$1,500'' in clause (i) and inserting 
     ``$1,000''; and
       (B) by striking ``$3,000'' in clause (ii) and inserting 
     ``$2,000''.
       (2) Conforming amendment.--Subsection (g) of section 220 of 
     such Code is amended to read as follows:
       ``(g) Cost-of-Living Adjustment.--
       ``(1) In general.--In the case of any taxable year 
     beginning in a calendar year after 1998, each dollar amount 
     in subsection (c)(2) shall be increased by an amount equal 
     to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which such taxable 
     year begins by substituting `calendar year 1997' for 
     `calendar year 1992' in subparagraph (B) thereof.
       ``(2) Special rules.--In the case of the $1,000 amount in 
     subsection (c)(2)(A)(i) and the $2,000 amount in subsection 
     (c)(2)(A)(ii), paragraph (1)(B) shall be applied by 
     substituting `calendar year 2000' for `calendar year 1997'.
       ``(3) Rounding.--If any increase under paragraph (1) or (2) 
     is not a multiple of $50, such increase shall be rounded to 
     the nearest multiple of $50.''.
       (f) Providing Incentives for Preferred Provider 
     Organizations To Offer Medical Savings Accounts.--Clause (ii) 
     of section 220(c)(2)(B) of such Code is amended by striking 
     ``preventive care if'' and all that follows and inserting 
     ``preventive care.''
       (g) Medical Savings Accounts May Be Offered Under Cafeteria 
     Plans.--Subsection (f) of section 125 of such Code is amended 
     by striking ``106(b),''.
       (h) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       (i) Emergency Designation.--Congress designates as 
     emergency requirements pursuant to section 252(e) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 the 
     following amounts:
       (1) An amount equal to the amount by which revenues are 
     reduced by this section below the recommended levels of 
     Federal revenues for fiscal year 2002, the total of fiscal 
     years 2002 through 2006, and the total of fiscal years 2002 
     through 2011, provided in the conference report accompanying 
     H. Con. Res. 83, the concurrent resolution on the budget for 
     fiscal year 2002.
       (2) Amounts equal to the amounts of new budget authority 
     and outlays provided in this Act in excess of the allocations 
     under section 302(a) of the Congressional Budget Act of 1974 
     to the Committee on Finance of the Senate for fiscal year 
     2002, the total of fiscal years 2002 through 2006, and the 
     total of fiscal years 2002 through 2011.
                                  ____

  SA 2803. Mr. THURMOND submitted an amendment intended to be proposed 
by him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 
to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

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

       (a) In General.--Subsection (b) of section 1211 of the 
     Internal Revenue Code of 1986 (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 `$4,000' for 
     `$3,000' and `$2,000' for `$1,500' in the case of taxable 
     years beginning in 2001, and by substituting `$5,000' for 
     `$3,000' and `$2,500' for `$1,500' in the case of taxable 
     years beginning in 2002.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2000.
                                  ____

  SA 2804. Mr. SESSIONS submitted an amendment intended to be proposed 
to amendment SA 2698 submitted by Mr. Daschle and intended to be 
proposed to the bill (H.R. 622) to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       Strike all after ``SECTION'' and insert the following:

     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 VII--UNEMPLOYMENT ASSISTANCE

Sec. 301. Short title.
Sec. 302. Federal-State agreements.
Sec. 303. Temporary extended unemployment compensation account.
Sec. 304. Payments to States having agreements for the payment of 
              temporary extended unemployment compensation.
Sec. 305. Financing provisions.
Sec. 306. Fraud and overpayments.
Sec. 307. Definitions.
Sec. 308. Applicability.
Sec. 309. Special Reed Act transfer in fiscal year 2002.

                  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 acquired 
              after December 31, 2001, and before January 1, 2004.

                    TITLE VI--ADDITIONAL PROVISIONS

Sec. 601. Emergency designation.

            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 February 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.

[[Page S371]]

     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:

``In the case of any taxable year beginning ``The per child amount is--
  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--UNEMPLOYMENT ASSISTANCE

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Temporary Extended 
     Unemployment Compensation Act of 2002''.

     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 extended unemployment 
     compensation to individuals who--
       (1) have exhausted all rights to regular compensation under 
     the State law or under Federal law with respect to a benefit 
     year (excluding any benefit year that ended before March 15, 
     2001);
       (2) have no rights to regular compensation or 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;
       (3) are not receiving compensation with respect to such 
     week under the unemployment compensation law of Canada; and
       (4) filed an initial claim for regular compensation on or 
     after March 15, 2001.
       (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

[[Page S372]]

     the expiration of the benefit year with respect to which such 
     rights existed.
       (d) Weekly Benefit Amount, Etc.--For purposes of any 
     agreement under this title--
       (1) the amount of temporary extended 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 extended unemployment 
     compensation and the payment thereof, except--
       (A) that an individual shall not be eligible for temporary 
     extended unemployment compensation under this title unless, 
     in the base period with respect to which the individual 
     exhausted all rights to regular compensation under the 
     State law, the individual had 20 weeks of full-time 
     insured employment or the equivalent in insured wages, as 
     determined under the provisions of the State law 
     implementing section 202(a)(5) of the Federal-State 
     Extended Unemployment Compensation Act of 1970 (26 U.S.C. 
     3304 note); and
       (B) where otherwise 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 extended unemployment 
     compensation payable to any individual for whom a temporary 
     extended 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 that is in an extended benefit period may 
     provide for the payment of temporary extended unemployment 
     compensation in lieu of extended compensation to individuals 
     who otherwise meet the requirements of this section. Such an 
     election shall not require a State to trigger off an extended 
     benefit period.

     SEC. 303. TEMPORARY EXTENDED 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 extended 
     unemployment compensation, a temporary extended 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 the lesser of--
       (A) 50 percent of the total amount of regular compensation 
     (including dependents' allowances) payable to the individual 
     during the individual's benefit year under such law, or
       (B) 13 times the individual's 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 EXTENDED 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 extended 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 out of 
     the employment security administration account (as 
     established by section 901(a) of the Social Security Act (42 
     U.S.C. 1101(a)) of the Unemployment Trust Fund, 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, 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 extended unemployment compensation under this title 
     to which he was not entitled, such individual--
       (1) shall be ineligible for further temporary extended 
     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 extended unemployment 
     compensation under this title to which they were not 
     entitled, the State shall require such individuals to repay 
     the amounts of such temporary extended unemployment 
     compensation to the State agency, except that the State 
     agency may waive such repayment if it determines that--
       (1) the payment of such temporary extended 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 extended 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 extended 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).

[[Page S373]]

     SEC. 308. APPLICABILITY.

       An agreement entered into under this title shall apply to 
     weeks of unemployment--
       (1) beginning after the date on which such agreement is 
     entered into; and
       (2) ending before January 1, 2003.

     SEC. 309. SPECIAL REED ACT TRANSFER IN FISCAL YEAR 2002.

       (a) Repeal of Certain Provisions Added by the Balanced 
     Budget Act of 1997.--
       (1) In general.--The following provisions of section 903 of 
     the Social Security Act (42 U.S.C. 1103) are repealed:
       (A) Paragraph (3) of subsection (a).
       (B) The last sentence of subsection (c)(2).
       (2) Savings provision.--Any amounts transferred before the 
     date of enactment of this Act under the provision repealed by 
     paragraph (1)(A) shall remain subject to section 903 of the 
     Social Security Act, as last in effect before such date of 
     enactment.
       (b) Special Transfer in Fiscal Year 2002.--Section 903 of 
     the Social Security Act is amended by adding at the end the 
     following:

                 ``Special Transfer in Fiscal Year 2002

       ``(d)(1) The Secretary of the Treasury shall transfer (as 
     of the date determined under paragraph (5)) from the Federal 
     unemployment account to the account of each State in the 
     Unemployment Trust Fund the amount determined with respect to 
     such State under paragraph (2).
       ``(2) The amount to be transferred under this subsection to 
     a State account shall (as determined by the Secretary of 
     Labor and certified by such Secretary to the Secretary of the 
     Treasury) be equal to--
       ``(A) the amount which would have been required to have 
     been transferred under this section to such account at the 
     beginning of fiscal year 2002 if--
       ``(i) section 709(a)(1) of the Temporary Extended 
     Unemployment Compensation Act of 2002 had been enacted before 
     the close of fiscal year 2001, and
       ``(ii) section 5402 of Public Law 105-33 (relating to 
     increase in Federal unemployment account ceiling) had not 
     been enacted,

     minus
       ``(B) the amount which was in fact transferred under this 
     section to such account at the beginning of fiscal year 2002.
       ``(3)(A) Except as provided in paragraph (4), amounts 
     transferred to a State account pursuant to this subsection 
     may be used only in the payment of cash benefits--
       ``(i) to individuals with respect to their unemployment, 
     and
       ``(ii) which are allowable under subparagraph (B) or (C).
       ``(B)(i) At the option of the State, cash benefits under 
     this paragraph may include amounts which shall be payable 
     as--
       ``(I) regular compensation, or
       ``(II) additional compensation, upon the exhaustion of any 
     temporary extended unemployment compensation (if such State 
     has entered into an agreement under the Temporary Extended 
     Unemployment Compensation Act of 2002), for individuals 
     eligible for regular compensation under the unemployment 
     compensation law of such State.
       ``(ii) Any additional compensation under clause (i) may not 
     be taken into account for purposes of any determination 
     relating to the amount of any extended compensation for which 
     an individual might be eligible.
       ``(C)(i) At the option of the State, cash benefits under 
     this paragraph may include amounts which shall be payable to 
     1 or more categories of individuals not otherwise eligible 
     for regular compensation under the unemployment compensation 
     law of such State, including those described in clause (iii).
       ``(ii) The benefits paid under this subparagraph to any 
     individual may not, for any period of unemployment, exceed 
     the maximum amount of regular compensation authorized under 
     the unemployment compensation law of such State for that same 
     period, plus any additional compensation (described in 
     subparagraph (B)(i)) which could have been paid with respect 
     to that amount.
       ``(iii) The categories of individuals described in this 
     clause include the following:
       ``(I) Individuals who are seeking, or available for, only 
     part-time (and not full-time) work.
       ``(II) Individuals who would be eligible for regular 
     compensation under the unemployment compensation law of such 
     State under an alternative base period.
       ``(D) Amounts transferred to a State account under this 
     subsection may be used in the payment of cash benefits to 
     individuals only for weeks of unemployment beginning after 
     the date of enactment of this subsection.
       ``(4) Amounts transferred to a State account under this 
     subsection may be used for the administration of its 
     unemployment compensation law and public employment offices 
     (including in connection with benefits described in paragraph 
     (3) and any recipients thereof), subject to the same 
     conditions as set forth in subsection (c)(2) (excluding 
     subparagraph (B) thereof, and deeming the reference to 
     `subsections (a) and (b)' in subparagraph (D) thereof to 
     include this subsection).
       ``(5) Transfers under this subsection shall be made by 
     December 31, 2001, unless this paragraph is not enacted until 
     after that date, in which case such transfers shall be made 
     within 10 days after the date of enactment of this 
     paragraph.''
       (c) Limitations on Transfers.--Section 903(b) of the Social 
     Security Act shall apply to transfers under section 903(d) of 
     such Act (as amended by this section). For purposes of the 
     preceding sentence, such section 903(b) shall be deemed to be 
     amended as follows:
       (1) By substituting ``the transfer date described in 
     subsection (d)(5)'' for ``October 1 of any fiscal year''.
       (2) By substituting ``remain in the Federal unemployment 
     account'' for ``be transferred to the Federal unemployment 
     account as of the beginning of such October 1''.
       (3) By substituting ``fiscal year 2002 (after the transfer 
     date described in subsection (d)(5))'' for ``the fiscal year 
     beginning on such October 1''.
       (4) By substituting ``under subsection (d)'' for ``as of 
     October 1 of such fiscal year''.
       (5) By substituting ``(as of the close of fiscal year 
     2002)'' for ``(as of the close of such fiscal year)''.
       (d) Technical Amendments.--(1) Sections 3304(a)(4)(B) and 
     3306(f)(2) of the Internal Revenue Code of 1986 are amended 
     by inserting ``or 903(d)(4)'' before ``of the Social Security 
     Act''.
       (2) Section 303(a)(5) of the Social Security Act is amended 
     in the second proviso by inserting ``or 903(d)(4)'' after 
     ``903(c)(2)''.
       (e) Regulations.--The Secretary of Labor may prescribe any 
     operating instructions or regulations necessary to carry out 
     this section and the amendments made by this section.

                  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.

[[Page S374]]

             TITLE V--TEMPORARY BUSINESS RELIEF PROVISIONS

     SEC. 501. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY 
                   ACQUIRED AFTER DECEMBER 31, 2001, AND BEFORE 
                   JANUARY 1, 2004.

       (a) In General.--Section 168 of the Internal Revenue Code 
     of 1986 (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 
     December 31, 2001, and Before January 1, 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 30 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,
       ``(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 December 31, 2001,
       ``(iii) which is--

       ``(I) acquired by the taxpayer after December 31, 2001, and 
     before January 1, 2004, but only if no written binding 
     contract for the acquisition was in effect before January 1, 
     2002, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after December 31, 
     2001, and before January 1, 2004, and

       ``(iv) which is placed in service by the taxpayer before 
     January 1, 2004, or, in the case of property described in 
     subparagraph (B), before January 1, 2005.
       ``(B) Certain property having longer production periods 
     treated as qualified property.--
       ``(i) In general.--The term `qualified property' includes 
     property--

       ``(I) which meets the requirements of clauses (i), (ii), 
     and (iii) of subparagraph (A),
       ``(II) which has a recovery period of at least 10 years or 
     is transportation property, and
       ``(III) which is subject to section 263A by reason of 
     clause (ii) or (iii) of subsection (f)(1)(B) thereof.

       ``(ii) Only pre-january 1, 2004, basis eligible for 
     additional allowance.--In the case of property which is 
     qualified property solely by reason of clause (i), paragraph 
     (1) shall apply only to the extent of the adjusted basis 
     thereof attributable to manufacture, construction, or 
     production before January 1, 2004.
       ``(iii) Transportation property.--For purposes of this 
     subparagraph, the term `transportation property' means 
     tangible personal property used in the trade or business of 
     transporting persons or property.
       ``(C) 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.
       ``(D) 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 December 31, 2001, and before January 1, 2004.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(ii), if property--

       ``(I) is originally placed in service after December 31, 
     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).
       ``(E) 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).
       ``(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) of the Internal 
     Revenue Code of 1986 (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 december 31, 2001, and before january 1, 2004.--The 
     deduction under section 168(k) shall be allowed.''
       (2) Conforming amendment.--Clause (i) of section 
     56(a)(1)(A) of the Internal Revenue Code of 1986 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 December 31, 
     2001, in taxable years ending after such date.

                    TITLE VI--ADDITIONAL PROVISIONS

     SEC. 602. EMERGENCY DESIGNATION.

       Congress designates as emergency requirements pursuant to 
     section 252(e) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 the following amounts:
       (1) An amount equal to the amount by which revenues are 
     reduced by this Act below the recommended levels of Federal 
     revenues for fiscal year 2002, the total of fiscal years 2002 
     through 2006, and the total of fiscal years 2002 through 
     2011, provided in the conference report accompanying H. Con. 
     Res. 83, the concurrent resolution on the budget for fiscal 
     year 2002.
       (2) Amounts equal to the amounts of new budget authority 
     and outlays provided in this Act in excess of the allocations 
     under section 302(a) of the Congressional Budget Act of 1974 
     to the Committee on Finance of the Senate for fiscal year 
     2002, the total of fiscal years 2002 through 2006, and the 
     total of fiscal years 2002 through 2011.
                                  ____

  SA 2805. Mr. SESSIONS submitted an amendment intended to be proposed 
to amendment SA 2698 submitted by Mr. Daschle and intended to be 
proposed to the bill (H.R. 622) to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       Add at the end of title V of the amendment, add the 
     following:

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

       Not later than February 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

[[Page S375]]

       (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. __. 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.
                                  ____

  SA 2806. Ms. LANDRIEU submitted an amendment intended to be proposed 
by her to the bill H.R. 622, to amend the Internal Revenue Code of 1986 
to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

           TITLE VI--REFUNDABLE HEALTH INSURANCE COSTS CREDIT

     SEC. 601. REFUNDABLE HEALTH INSURANCE COSTS CREDIT.

       (a) Allowance of Credit.--
       (1) In general.--Subpart C of part IV of subchapter A of 
     chapter 1 (relating to refundable personal credits) is 
     amended by redesignating section 35 as section 36 and 
     inserting after section 34 the following:

     ``SEC. 35. HEALTH INSURANCE COSTS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     individual, there shall be allowed as a credit against the 
     tax imposed by this subtitle for the taxable year an amount 
     equal to the amount paid by the taxpayer during such taxable 
     year for qualified health insurance for the taxpayer and the 
     taxpayer's spouse and dependents.
       ``(b) Limitations.--
       ``(1) Maximum dollar amount.--
       ``(A) In general.--The amount allowed as a credit under 
     subsection (a) to the taxpayer for the taxable year shall not 
     exceed the sum of the monthly limitations for coverage months 
     during such taxable year.
       ``(B) Monthly limitation.--The monthly limitation for each 
     coverage month during the taxable year is an amount equal to 
     75 percent of the amount paid for qualified health insurance 
     for such month.
       ``(2) 12-month limitation.--For purposes of paragraph (1), 
     the total number of coverage months taken into account with 
     respect to each qualifying event of the individual shall not 
     exceed the lesser of--
       ``(A) the total number of consecutive coverage months 
     starting with the first coverage month with respect to the 
     event, or
       ``(B) 12.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Coverage month.--
       ``(A) In general.--The term `coverage month' means, with 
     respect to an individual, any month if--
       ``(i) as of the first day of such month such individual is 
     covered by qualified health insurance, and
       ``(ii) the premium for coverage under such insurance, or 
     any portion of the premium, for such month is paid by the 
     taxpayer.
       ``(B) Exclusion of months in which individual is 
     imprisoned.--Such term shall not include any month with 
     respect to an individual if, as of the first day of such 
     month, such individual is imprisoned under Federal, State, or 
     local authority.
       ``(2) Eligible individual.--
       ``(A) In general.--The term `eligible individual' means an 
     individual who is--
       ``(i) a covered employee (as defined in section 4980B(f)) 
     of the plan sponsor of the qualified health insurance, and
       ``(ii) eligible for continuation coverage by reason of a 
     qualifying event which occurs after September 11, 2001.
       ``(B) Dependents of terrorist victims.--The term `eligible 
     individual' shall include the spouse, child, or other 
     individual who--
       ``(i) was an insured under health insurance coverage of an 
     individual who was killed as a result of the terrorist-
     related aircraft crashes on September 11, 2001, or as a 
     result of any other terrorist-related event occurring during 
     the period beginning on September 11, 2001, and ending on 
     December 31, 2002, and
       ``(ii) is eligible for continuation coverage by reason of 
     the death of such individual.
       ``(C) Certain coverage treated as continuation coverage.--
     If an individual during the period beginning on September 11, 
     2001, and ending on December 31, 2002--
       ``(i) elects to take a voluntary leave program offered by 
     such individual's employer after the employer has announced 
     that employee separations will occur as a result of the 
     terrorist-related aircraft crashes on September 11, 2001, or 
     as a result of any other terrorist-related event occurring 
     during such period; and
       ``(ii) is eligible under such voluntary leave program, and 
     has elected, to continue their health insurance coverage 
     under a group health plan through payment of 100 percent of 
     the premium for such coverage,

     then, for purposes of this section, such individual shall be 
     treated as an eligible individual and such coverage shall be 
     treated as qualified health insurance.
       ``(3) Qualified health insurance.--The term `qualified 
     health insurance' means health insurance coverage under--
       ``(A) a COBRA continuation provision (as defined in section 
     9832(d)(1)), or
       ``(B) section 8905a of title 5, United States Code.

     Such term includes such continuation coverage provided in a 
     State that has enacted a law that requires such coverage even 
     though the coverage would not otherwise be required under the 
     provisions of law referred to in subparagraph (A).
       ``(4) Qualifying event.--The term `qualifying event' means 
     an event described in section 4980B(f)(3)(B), except that 
     such term shall not include a voluntary termination.
       ``(d) Special Rules.--
       ``(1) Coordination with medical expense deduction.--The 
     amount which would (but for this paragraph) be taken into 
     account by the taxpayer under section 213 for the taxable 
     year shall be reduced by the credit (if any) allowed by this 
     section to the taxpayer for such year.
       ``(2) Coordination with advance payment.--Rules similar to 
     the rules of section 32(g) shall apply to any credit to which 
     this section applies.
       ``(e) Expenses Must Be Substantiated.--A payment for 
     insurance to which subsection (a) applies may be taken into 
     account under this section only if the taxpayer substantiates 
     such payment in such form as the Secretary may prescribe.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     this section.
       ``(g) Termination.--This section shall not apply to any 
     amount paid after December 31, 2002.''.
       (b) Information Reporting.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 (relating to information concerning transactions 
     with other persons) is amended by inserting after section 
     6050S the following:

     ``SEC. 6050T. RETURNS RELATING TO PAYMENTS FOR QUALIFIED 
                   HEALTH INSURANCE.

       ``(a) In General.--Any person who, in connection with a 
     trade or business conducted by such person, receives payments 
     during any calendar year from any individual for coverage of 
     such individual or any other individual under creditable 
     health insurance, shall make the return described in 
     subsection (b) (at such time as the Secretary may by 
     regulations prescribe) with respect to each individual from 
     whom such payments were received.
       ``(b) Form and Manner of Returns.--A return is described in 
     this subsection if such return--
       ``(1) is in such form as the Secretary may prescribe, and
       ``(2) contains--
       ``(A) the name, address, and TIN of the individual from 
     whom payments described in subsection (a) were received,
       ``(B) the name, address, and TIN of each individual who was 
     provided by such person with coverage under creditable health 
     insurance by reason of such payments and the period of such 
     coverage,
       ``(C) the aggregate amount of payments described in 
     subsection (a),
       ``(D) the qualified health insurance credit advance amount 
     (as defined in section 7527(e)) received by such person with 
     respect to the individual described in subparagraph (A), and
       ``(E) such other information as the Secretary may 
     reasonably prescribe.
       ``(c) Creditable Health Insurance.--For purposes of this 
     section, the term `creditable health insurance' means 
     qualified health insurance (as defined in section 35(c)).
       ``(d) Statements To Be Furnished to Individuals With 
     Respect to Whom Information Is Required.--Every person 
     required to make a return under subsection (a) shall furnish 
     to each individual whose name is required under subsection 
     (b)(2)(A) to be set forth in such return a written statement 
     showing--
       ``(1) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person,
       ``(2) the aggregate amount of payments described in 
     subsection (a) received by the person required to make such 
     return from the individual to whom the statement is required 
     to be furnished,
       ``(3) the information required under subsection (b)(2)(B) 
     with respect to such payments, and
       ``(4) the qualified health insurance credit advance amount 
     (as defined in section 7527(e)) received by such person with 
     respect to the individual described in paragraph (2).


[[Page S376]]


     The written statement required under the preceding sentence 
     shall be furnished on or before January 31 of the year 
     following the calendar year for which the return under 
     subsection (a) is required to be made.
       ``(e) Returns Which Would Be Required To Be Made by 2 or 
     More Persons.--Except to the extent provided in regulations 
     prescribed by the Secretary, in the case of any amount 
     received by any person on behalf of another person, only the 
     person first receiving such amount shall be required to make 
     the return under subsection (a).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) (relating to 
     definitions) is amended by redesignating clauses (xi) through 
     (xvii) as clauses (xii) through (xviii), respectively, and by 
     inserting after clause (x) the following:
       ``(xi) section 6050T (relating to returns relating to 
     payments for qualified health insurance),''.
       (B) Paragraph (2) of section 6724(d) is amended by striking 
     ``or'' at the end of the next to last subparagraph, by 
     striking the period at the end of the last subparagraph and 
     inserting ``, or'', and by adding at the end the following:
       ``(BB) section 6050T(d) (relating to returns relating to 
     payments for qualified health insurance).''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6050S the 
     following:

``Sec. 6050T. Returns relating to payments for qualified health 
              insurance.''.

       (c) Criminal Penalty for Fraud.--Subchapter B of chapter 75 
     (relating to other offenses) is amended by adding at the end 
     the following:

     ``SEC. 7276. PENALTIES FOR OFFENSES RELATING TO HEALTH 
                   INSURANCE TAX CREDIT.

       ``Any person who knowingly misuses Department of the 
     Treasury names, symbols, titles, or initials to convey the 
     false impression of association with, or approval or 
     endorsement by, the Department of the Treasury of any 
     insurance products or group health coverage in connection 
     with the credit for health insurance costs under section 35 
     shall on conviction thereof be fined not more than $10,000, 
     or imprisoned not more than 1 year, or both.''.
       (d) Conforming Amendments.--
       (1) Section 162(l) is amended by adding at the end the 
     following:
       ``(6) Election to have subsection apply.--No deduction 
     shall be allowed under paragraph (1) for a taxable year 
     unless the taxpayer elects to have this subsection apply for 
     such year.''.
       (2) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 35 of such Code''.
       (3) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 is amended by striking the last 
     item and inserting the following:

``Sec. 35. Health insurance costs.
``Sec. 36. Overpayments of tax.''.

       (4) The table of sections for subchapter B of chapter 75 is 
     amended by adding at the end the following:

``Sec. 7276. Penalties for offenses relating to health insurance tax 
              credit.''.

       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2001, without regard to whether 
     final regulations to carry out such amendments have been 
     promulgated by such date.
       (2) Penalties.--The amendments made by subsections (c) and 
     (d)(4) shall take effect on the date of the enactment of this 
     Act.

     SEC. 602. ADVANCE PAYMENT OF CREDIT TO ISSUERS OF QUALIFIED 
                   HEALTH INSURANCE.

       (a) In General.--Chapter 77 (relating to miscellaneous 
     provisions) is amended by adding at the end the following:

     ``SEC. 7527. ADVANCE PAYMENT OF HEALTH INSURANCE CREDIT FOR 
                   PURCHASERS OF QUALIFIED HEALTH INSURANCE.

       ``(a) General Rule.--Every plan sponsor of a group health 
     plan providing, or qualified health insurance issuer of, 
     qualified health insurance to an eligible individual shall--
       ``(1) make qualified premium payments with respect to such 
     individual in an amount equal to the qualified health 
     insurance credit advance amount, and
       ``(2) treat such payments in the manner provided in 
     subsection (g).
       ``(b) Eligible Individual.--For purposes of this section, 
     the term `eligible individual' means any individual--
       ``(1) who purchases qualified health insurance (as defined 
     in section 35(c)), and
       ``(2) for whom a qualified health insurance credit 
     eligibility certificate is in effect.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified health insurance issuer.--The term 
     `qualified health insurance issuer' means a health insurance 
     issuer described in section 9832(b)(2) (determined without 
     regard to the last sentence thereof) offering coverage in 
     connection with a group health plan.
       ``(2) Group health plan.--The term `group health plan' has 
     the meaning given such term by section 5000(b)(1) (determined 
     without regard to subsection (d) thereof).
       ``(3) Qualified premium payments.--The term `qualified 
     premium payments' means any amount paid or incurred, cost 
     incurred, or health coverage value provided, with respect to 
     qualified health insurance for an eligible individual and the 
     individual's spouse and dependents. For purposes of the 
     preceding sentence, in the case of a group health plan, the 
     health coverage value is equal to the applicable premium 
     under the plan for the qualified health insurance coverage 
     provided to an eligible individual and the individual's 
     spouse and dependents, as determined under section 4980B.
       ``(d) Qualified Health Insurance Credit Eligibility 
     Certificate.--For purposes of this section, a qualified 
     health insurance credit eligibility certificate is a 
     statement furnished by an individual to a plan sponsor of a 
     group health plan or qualified health insurance issuer 
     which--
       ``(1) certifies that the individual will be eligible to 
     receive the credit provided by section 35 for the taxable 
     year,
       ``(2) estimates the amount of such credit for such taxable 
     year, and
       ``(3) provides such other information as the Secretary may 
     require for purposes of this section.
       ``(e) Qualified Health Insurance Credit Advance Amount.--
     For purposes of this section, the term `qualified health 
     insurance credit advance amount' means, with respect to any 
     plan sponsor of a group health plan providing, or qualified 
     health insurance issuer of, qualified health insurance, the 
     amount of credit allowable under section 35 to the individual 
     for the taxable year which is attributable to the insurance 
     provided to the individual by such sponsor or issuer.
       ``(f) Required Documentation for Receipt of Payments of 
     Advance Amount.--No payment of a qualified health insurance 
     credit advance amount with respect to any eligible individual 
     may be made under subsection (a) unless the plan sponsor of 
     the group health plan or qualified health insurance issuer 
     provides to the Secretary--
       ``(1) the qualified health insurance credit eligibility 
     certificate of such individual, and
       ``(2) the return relating to such individual under section 
     6050T.
       ``(g) Qualified Premium Payments To Be Treated as Payments 
     of Withholding Amounts and Certain Employer Tax.--
       ``(1) In general.--For purposes of this title, qualified 
     premium payments made or costs incurred by the sponsor of a 
     group health plan, or any entity designated by the sponsor to 
     make such payments or incur such costs--
       ``(A) shall not be treated as compensation, and
       ``(B) shall be treated, in such manner as provided by the 
     Secretary, as made out of--
       ``(i) amounts required to be deposited by the taxpayer as 
     estimated income tax under section 6654 or 6655,
       ``(ii) amounts required to be deducted and withheld under 
     section 3401 (relating to wage withholding),
       ``(iii) amounts of the taxes imposed under section 3111(a) 
     or 50 percent of taxes imposed under section 1401(a) 
     (relating to FICA employer taxes), or
       ``(iv) amounts required to be deducted under section 3102 
     with respect to taxes imposed under section 3101(a) or 50 
     percent of taxes imposed under section 1401(a) (relating to 
     FICA employee taxes),

     as if such sponsor, or such designated entity, had paid to 
     the Secretary an amount equal to such payments.
       ``(2) Qualified premium payments exceed taxes due.--In the 
     case of any entity, if for any time period the aggregate 
     qualified premium payments exceed the amounts described in 
     paragraph (1)(B), the Secretary shall reduce amounts 
     described in such paragraph for any succeeding time period as 
     necessary to reflect such excess.
       ``(3) Failure to make qualified premium payments.--For 
     purposes of this title (including penalties), failure to make 
     a qualified premium payment with respect to an eligible 
     individual at the time provided therefor shall be treated as 
     the failure at such time to deduct and withhold under chapter 
     24 of such Code in an amount equal to the amount of such 
     qualified premium payments.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     this section.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     77 is amended by adding at the end the following:

``Sec. 7527. Advance payment of health insurance credit for purchasers 
              of qualified health insurance.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2002, without regard to 
     whether final regulations to carry out such amendments have 
     been promulgated by such date.

     SEC. 603. COBRA NOTIFICATION REQUIREMENTS.

       (a) Change in COBRA Notice.--
       (1) General notice.--For purposes of this section--
       (A) In general.--Any notice required to be provided under 
     section 4980B(f)(6) of the Internal Revenue Code of 1986, 
     section 2206 of the Public Health Service Act (42 U.S.C. 
     300bb-6), section 606 of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1166), or section 
     8905a(f)(2)(A) of title 5,

[[Page S377]]

     United States Code, with respect to an eligible individual 
     shall include an additional notification to the recipient of 
     the availability of qualified premium payments for such 
     coverage under section 7527 of the Internal Revenue Code of 
     1986.
       (B) Alternative notice.--In the case of COBRA continuation 
     coverage to which the notice provision under such sections 
     does not apply, the Secretary of the Treasury, in 
     consultation with the Secretary of Labor, shall, in 
     coordination with administrators of the group health plans 
     (or other entities) that provide or administer the COBRA 
     continuation coverage involved, assure the provision of such 
     notice.
       (C) Form.--The requirement of the additional notification 
     under this paragraph may be met by amendment of existing 
     notice forms or by inclusion of a separate document with the 
     notice otherwise required.
       (2) Specific requirements.--Each additional notification 
     under paragraph (1) shall include the following:
       (A) The forms necessary for establishing eligibility for, 
     and making a designation to request, qualified premium 
     payments under section 7527 of the Internal Revenue Code of 
     1986.
       (B) The following displayed in a prominent manner:
       (i) The name, address, and telephone number necessary to 
     contact the employer, administrator, and any other person 
     maintaining relevant information in connection with how to 
     request such qualified premium payments.
       (ii) The toll-free telephone number and Internet website 
     address established under paragraph (4)(A)(i).
       (iii) The name, address, and telephone number for the group 
     health plan (including a multiemployer plan), issuer of 
     health insurance coverage, administrator, an employer, or 
     other entity (as appropriate with respect to the individual) 
     that will collect the monthly premium for such coverage, 
     specifying that the forms described in subparagraph (A) are 
     to be completed by the individual and sent to such entity.
       (iv) The following statement:
       ``You may be eligible to receive qualified premium payments 
     for payment of 75 percent of your COBRA continuation coverage 
     premiums and with temporary medicaid coverage for the 
     remaining premium portion for a duration of not to exceed 12 
     months. This assistance will not be available after December 
     31, 2002. Return the enclosed forms as soon as possible to 
     the address specified.''.
       (C) The dollar amount equal to 25 percent of the monthly 
     2002 premium that would be owed during 2002 by the individual 
     for the coverage if the individual is eligible for, and 
     requests, qualified premium payments.
       (3) Supplemental notice for individuals previously provided 
     notice or whose election period is temporarily extended.--In 
     the case of notices described in paragraph (1) which were 
     transmitted before the date of enactment of this Act to an 
     eligible individual who has elected (or is still eligible to 
     elect, including as a result of section 604) COBRA 
     continuation coverage as of the date of enactment of this 
     Act, the employer, administrator, or other entity involved, 
     or the Secretary of the Treasury, in consultation with the 
     Secretary of Labor (in the case described in the paragraph 
     (1)(B)), shall provide (within the period required under 
     paragraph (4)(B)(i)) for the additional notification required 
     to be provided under this subsection.
       (4) Required timeline.--
       (A) In general.--Not later than 15 days after the date of 
     enactment of this Act, the Secretary of the Treasury shall--
       (i) establish a toll-free telephone number and an Internet 
     website to provide information and answer inquiries about the 
     qualified premium payments available under section 7527 of 
     the Internal Revenue Code of 1986;
       (ii) prescribe models for the additional notification 
     required under this subsection and the forms necessary for 
     establishing eligibility, and requesting, such qualified 
     premium payments;
       (iii) notify each covered employer, plan sponsors of a 
     group health plan providing qualified health insurance, and 
     qualified health insurance issuers of qualified health 
     insurance of such qualified premium payments, and notify each 
     covered employer of the additional notification required 
     under this subsection;
       (iv) make the model notification and forms under clause 
     (ii) available to each such covered employer; and
       (v) provide, in consultation with the Secretary of Labor, 
     the additional notification required for individuals 
     described in paragraph (1)(B).
       (B) Covered employers.--Not later than 15 days after the 
     model notification and forms are made available under 
     subparagraph (A)(iv), each covered employer or their designee 
     shall--
       (i) provide the additional notification required under this 
     subsection; and
       (ii) be able to comply with such additional notification 
     requirement in the case of any individual described in 
     paragraph (1)(A).
       (C) Definition of covered employer.--For purposes of this 
     section, the term ``covered employer'' means, for any 
     calendar year, any person on whom an excise tax is imposed 
     under section 3111 or 1401 of the Internal Revenue Code of 
     1986 with respect to having an individual in the person's 
     employ to whom wages are paid by such person during such 
     calendar year.
       (5) Eligible individual.--For purposes of this subsection, 
     the term ``eligible individual'' has the meaning given such 
     term by section 35(c)(2) of the Internal Revenue Code of 
     1986.
       (b) Effective Date.--This section shall not apply with 
     respect to qualified premium payments made after December 31, 
     2002.

     SEC. 604. TEMPORARY EXTENSION OF ELECTION PERIOD FOR CERTAIN 
                   SEPARATED INDIVIDUALS.

       (a) Temporary Extension of Election Period for Certain 
     Separated Individuals.--Notwithstanding any other provision 
     of law, the election period for COBRA continuation coverage 
     with respect to any eligible individual (as defined in 
     section 35(c)(2) of the Internal Revenue Code of 1986) for 
     whom such period has expired as of the date of enactment of 
     this Act, shall not end before the date that is 60 days after 
     the date the individual receives the supplemental notice 
     required under section 603(a)(3).
       (b) Preexisting Conditions.--If an individual is entitled 
     to a supplemental notice under section 603(a)(3), any period 
     before the receipt of such notice shall be disregarded for 
     purposes of determining the 63-day periods referred to in 
     section 701(c)(2) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1181(c)(2)), section 2701(c)(2) of the 
     Public Health Service Act (42 U.S.C. 300gg(c)(2)), and 
     section 9801(c)(2) of the Internal Revenue Code of 1986.
                                  ____

  SA 2807. Mr. SESSIONS (for Mr. Kyl (for himself, Mr. Nickles, and Mr. 
Sessions)) proposed an amendment to amendment SA 2721 submitted by Mr. 
Reid and intended to be proposed to the amendment SA 2698 proposed by 
Mr. Daschle to the bill (H.R. 622) to amend the Internal Revenue Code 
of 1986 to expand the adoption credit, and for other purposes; as 
follows:

       At the end, add the following:

     SEC.   . PERMANENT REPEAL OF ESTATE TAXES.

       Section 901 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is amended--
       (1) by striking ``this Act'' and all that follows through 
     2010.'' in subsection (a) and inserting ``this Act (other 
     than title V) shall not apply to taxable, plan, or limitation 
     years beginning after December 31, 2010.'', and
       (2) by striking, ``, estates, gifts, and transfers'' in 
     subsection (b).
                                  ____

  SA 2808. Mr. DORGAN (for himself, Mr. Reid, Mr. Inouye, and Mr. 
Conrad) proposed an amendment to amendment SA 2764 submitted Mr. Reid 
and intended to be proposed to the amendment SA 2698 proposed by Mr. 
Daschle to the bill (H.R. 622) to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes; as follows:

       At the end, add the following:

                TITLE ___--TRAVEL INDUSTRY STABILIZATION

     SECTION _01. SHORT TITLE.

       This title may be cited as the ``American Travel Industry 
     Stabilization Act''.

     SEC. _02. TRAVEL INDUSTRY DISASTER RELIEF.

       (a) In General.--Notwithstanding any other provision of 
     law, the President shall take the actions described in 
     subsection (b) to compensate eligible travel-related 
     businesses.
       (b) Actions Described.--
       (1) In general.--Subject to such terms and conditions as 
     the President deems necessary, and upon application, the 
     President is authorized to issue Federal credit instruments 
     to eligible travel-related businesses described in subsection 
     (c) that do not, in the aggregate, exceed $2,000,000,000 and 
     provide the subsidy amounts necessary for such instruments in 
     accordance with the provisions of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661 et seq.).
       (2) Time for application.--An application for a Federal 
     credit instrument shall be filed by an eligible travel-
     related business not later than 1 year after the promulgation 
     of regulations.
       (3) Terms of credit instruments.--A loan guaranteed under 
     this title may be used exclusively for the purpose of meeting 
     obligations and expenses to the extent that an applicant 
     demonstrates--
       (A) business operations were directly and adversely 
     affected by the events of September 11, 2001;
       (B) the loan guarantee is necessary to meet such 
     obligations;
       (C) the inability of the applicant to meet such obligations 
     or expenses is directly attributable to the impact of 
     September 11, 2001; and
       (D) the applicant has the ability to repay the loan.
       (c) Definitions.--In this title:
       (1) Board.--The term ``Board'' means the Air Transportation 
     Stabilization Board established under the Air Transportation 
     Safety and System Stabilization Act (49 U.S.C. 40101 note; 
     P.L. 107-42).
       (2) Eligible travel-related business.--The term ``eligible 
     travel-related business'' means a business that was injured 
     by the Government shutdown of the airline industry following 
     the terrorist attacks on the United States that occurred on 
     September 11, 2001, and that on such date--
       (A) had a contractual arrangement with an air carrier to 
     provide goods or services, including those with a contractual 
     relationship with the Airline Reporting Corporation; or

[[Page S378]]

       (B) was a nonaeronautical for-profit business operating at 
     an airport engaged in the sale of consumer goods or services 
     to the public under an arrangement with the airport or the 
     airport's governing body.
       (3) Federal credit instrument.--The term ``Federal credit 
     instrument'' means any guarantee or other pledge by the Board 
     issued under section _02(b) to pledge the full faith and 
     credit of the United States to pay all or part of any of the 
     principal of and interest on a loan or other debt obligation 
     issued by an obligor and funded by a lender.
       (4) Financial obligation.--The term ``financial 
     obligation'' means any note, bond, debenture, or other debt 
     obligation issued by an obligor in connection with financing 
     under this section and section _02(b).
       (5) Lender.--The term ``lender'' means any non-Federal 
     qualified institutional buyer (as defined by section 
     230.144A(a) of title 17, Code of Federal Regulations (or any 
     successor regulatory) known as rule 144A(a) of the Securities 
     and Exchange Commission and issued under the Securities Act 
     of 1933), including--
       (A) a qualified retirement plan (as defined in section 
     4974(c) of the Internal Revenue Code of 1986 (26 U.S.C. 
     4974(c))) that is a qualified institutional buyer; and
       (B) a governmental plan (as defined in section 414(d) of 
     the Internal Revenue Code of 1986 (26 U.S.C. 414(d))) that is 
     a qualified institutional buyer.
       (6) Obligor.--The term ``obligor'' means a party primarily 
     liable for payment of the principal of, or interest on, a 
     Federal credit instrument, which party may be a corporation, 
     partnership, joint venture, trust, or governmental entity, 
     agency, or instrumentality.
       (d) Emergency Designation.--Congress designates the amount 
     of new budget authority and outlays in all fiscal years 
     resulting from this title as an emergency requirement 
     pursuant to section 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such 
     amount shall be available only to the extent that a request, 
     that includes designation of such amount as an emergency 
     requirement as defined in such Act, is transmitted by the 
     President to Congress.

     SEC. _03. ADDITIONAL FUNCTIONS FOR THE AIRLINE STABILIZATION 
                   BOARD.

       (a) Additional Functions To Stabilize the Travel 
     Industry.--The Board shall review and make recommendations to 
     the President with respect to applications for Federal credit 
     instruments submitted under section _02(b).
       (b) Federal Credit Instruments.--
       (1) In general.--The Board may enter into agreements with 1 
     or more obligors to issue Federal credit instruments under 
     section _02(b) if the Board determines, in its discretion, 
     that--
       (A) the obligor is an entity in a travel-related business 
     for which credit is not reasonably available at the time of 
     the transaction;
       (B) the intended obligation by the obligor is prudently 
     incurred; and
       (C) such agreement is a necessary part of maintaining a 
     safe, efficient, and viable travel industry in the United 
     States.
       (2) Terms and limitations.--
       (A) Forms, terms, and conditions.--A Federal credit 
     instrument shall be issued under section _02(b) in such form 
     and such terms and conditions and contain such covenants, 
     representatives, warranties, and requirements (including 
     requirements for audits) as the Board determines appropriate, 
     provided that--
       (i) a loan shall be repaid over a period not to exceed 5 
     years from the date that the loan is guaranteed under this 
     title;
       (ii) the Government guarantee shall cover not less than 80 
     percent of the value of the loan;
       (iii) loan guarantees under this title shall be extended 
     based upon the ability of the eligible travel-related 
     business to repay the loan without regard to collateral; and
       (iv) any loan origination fee may not exceed 1 percent of 
     the loan value.
       (B) Procedures.--Not later than 14 days after the date of 
     enactment of this title, the Director of the Office of 
     Management and Budget, in consultation with the Board, shall 
     issue regulations setting forth procedures for application 
     and minimum requirements.
       (c) Financial Protection of Government.--
       (1) In general.--To the extent feasible and practicable, as 
     provided in paragraphs (2) and (3), the Board shall ensure 
     that the Government is compensated for the risk assumed in 
     making guarantees under this title.
       (2) Government participation in gains.--To the extent to 
     which any participating corporation accepts financial 
     assistance, in the form of accepting the proceeds of any 
     loans guaranteed by the Government under this title, the 
     Board is authorized to enter into contracts under which the 
     Government, contingent on the financial success of the 
     participating corporation, would participate in the gains of 
     the participating corporation or its security holders through 
     the use of such instruments as warrants, stock options, 
     common or preferred stock, or other appropriate equity 
     instruments.
       (3) Deposit in treasury.--All amounts collected by the 
     Secretary of the Treasury under this subsection shall be 
     deposited in the Treasury as miscellaneous receipts.
       (e) Authorization of Funds.--Congress authorizes and hereby 
     appropriates such sums as are necessary to carry out the 
     purposes of this title.
                                  ____

  SA 2809. Mr. SESSIONS submitted an amendment intended to be proposed 
to amendment SA 2773 submitted by Mr. Grassley and intended to be 
proposed to the bill (H.R. 622) to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       Add at the end of subtitle A of title VI of the amendment, 
     add the following:

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

       Not later than February 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. __. 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.
                                  ____

  SA 2810. Mr. SESSIONS submitted an amendment intended to be proposed 
to amendment SA 2773 submitted by Mr. Grassley and intended to be 
proposed to the bill (H.R. 622) to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the end of subtitle A of title VI of the amendment, add 
     the following:

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

       Not later than February 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. __. 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.

[[Page S379]]

     SEC. __. 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 division.

     SEC. __. 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:

``In the case of any taxable year beginning ``The per child amount is--
  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. __. 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. __. 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 division.
                                  ____

  SA 2811. Mr. NICKLES (for Mr. McCain (for himself, Mr. Allard, Mr. 
Lieberman, Ms. Snowe, Mr. Levin, Mr. Murkowski, Mr. Cleland, Mr. 
Inhofe, Ms. Landrieu, Mr. Burns, Mr. Durbin, Mr. Sessions, Mr. DeWine, 
Mr. Thurmond, Mr. Shelby, Mr. Hagel, Mr. Lugar, Mr. Kennedy, Mr. 
Warner, Ms. Collins, Mr. Hatch, Mr. Helms, Mr. Allen, Mr. Kerry, Mr. 
Fitzgerald, Mr. Stevens, Mr. Reid, Mr. Miller, Mr. Roberts, Mr. Bayh, 
Mr. Ensign, Mr. Bunning, Mr. Campbell, Mr. Nelson of Nebraska, Mr. 
Dodd, Mr. Jeffords, Mr. Brownback, Mr. Biden, Ms. Stabenow, Mr. 
Cochran, and Mr. Sarbanes)) submitted an amendment intended to be 
proposed to amendment SA 2700 submitted by Mr. McCain and intended to 
be proposed to the bill (H.R. 622) to amend the Internal Revenue Code 
of 1986 to expand the adoption credit, and for other purposes; which 
was ordered to lie on the table; as follows:

       Strike subsection (b) of the amendment and insert the 
     following:
       (b) Effective Date; Special Rule.--
       (1) Effective date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 312 of the Taxpayer Relief Act of 1997.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendment made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.
                                  ____

  SA 2812. Mr. NICKLES (for Mr. McCain (for himself, Mr. Allard, Mr. 
Lieberman, Ms. Snowe, Mr. Levin, Mr. Murkowski, Mr. Cleland, Mr. 
Inhofe, Ms. Landrieu, Mr. Burns, Mr. Durbin, Mr. Sessions, Mr. DeWine, 
Mr. Thurmond, Mr. Shelby, Mr. Hagel, Mr. Lugar, Mr. Kennedy, Mr. 
Warner, Ms. Collins, Mr. Hatch, Mr. Helms, Mr. Allen, Mr. Kerry, Mr. 
Fitzgerald, Mr. Stevens, Mr. Reid, Mr. Miller, Mr. Roberts, Mr. Bayh, 
Mr. Ensign, Mr. Bunning, Mr. Campbell, Mr. Nelson of Nebraska, Mr. 
Dodd, Mr. Jeffords, Mr. Brownback, Mr. Biden, Ms. Stabenow, Mr. 
Cochran, and Mr. Sarbanes)) submitted an amendment intended to be 
proposed to amendment SA 2790 submitted by Mr. Nickles and intended to 
be proposed to the amendment SA 2698 proposed by Mr. Daschle to the 
bill (H.R. 622) to amend the Internal Revenue Code of 1986 to expand 
the adoption credit, and for other purposes; which was ordered to lie 
on the table; as follows:

       Strike subsection (b) of the amendment and insert the 
     following:
       (b) Effective Date; Special Rule.--
       (1) Effective date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 312 of the Taxpayer Relief Act of 1997.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendment made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.
                                  ____

  SA 2813. Mr. BOND submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end, add the following:

     SEC.  . MODIFICATION OF UNRELATED BUSINESS INCOME LIMITATION 
                   ON INVESTMENT IN CERTAIN DEBT-FINANCED 
                   PROPERTIES.

       (a) In General.--Section 514(c)(6) of the Internal Revenue 
     Code of 1986 (relating to acquisition indebtedness) is 
     amended--

[[Page S380]]

       (1) by striking ``include an obligation'' and inserting 
     ``include--
       ``(A) an obligation'',
       (2) by striking the period at the end and inserting ``, 
     or'', and
       (3) by adding at the end the following:
       ``(B) indebtedness incurred by a small business investment 
     company licensed under the Small Business Investment Act of 
     1958 which is evidenced by a debenture--
       ``(i) issued by such company under section 303(a) of such 
     Act, or
       ``(ii) held or guaranteed by the Small Business 
     Administration.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to acquisitions made on or after the date of the 
     enactment of this Act.

                          ____________________