[Congressional Record Volume 148, Number 14 (Thursday, February 14, 2002)]
[House]
[Pages H477-H509]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1230
                         HOPE FOR CHILDREN ACT

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 347, I call up 
the bill (H.R. 622), to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes, with Senate 
amendments thereto, and ask for its immediate consideration in the 
House.
  The Clerk read the title of the bill.


                      Motion Offered by Mr. Thomas

  Mr. THOMAS. Mr. Speaker, I offer a motion.
  The SPEAKER pro tempore (Mr. Quinn). The Clerk will designate the 
motion.
  The text of the motion is as follows:

       Mr. Thomas moves that the House concur in the Senate 
     amendments with respective amendments as follows:

[[Page H478]]

       Senate Amendments:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Temporary 
     Extended Unemployment Compensation Act of 2002''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Federal-State agreements.
Sec. 3. Temporary extended unemployment compensation account.
Sec. 4. Payments to States having agreements under this Act.
Sec. 5. Financing provisions.
Sec. 6. Fraud and overpayments.
Sec. 7. Definitions.
Sec. 8. Applicability.

     SEC. 2. FEDERAL-STATE AGREEMENTS.

       (a) In General.--Any State which desires to do so may enter 
     into and participate in an agreement under this Act with the 
     Secretary of Labor (in this Act referred to as the 
     ``Secretary''). Any State which is a party to an agreement 
     under this Act 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--
       (1) who--
       (A) first exhausted all rights to regular compensation 
     under the State law on or after the first day of the week 
     that includes September 11, 2001; or
       (B) have their 26th week of regular compensation under the 
     State law end on or after the first day of the week that 
     includes September 11, 2001;
       (2) who do not have any rights to regular compensation 
     under the State law of any other State; and
       (3) who are not receiving compensation under the 
     unemployment compensation law of any other country.
       (c) Coordination Rules.--
       (1) Temporary extended unemployment compensation to serve 
     as second-tier benefits.--Notwithstanding any other provision 
     of law, neither regular compensation, extended compensation, 
     nor additional compensation under any Federal or State law 
     shall be payable to any individual for any week for which 
     temporary extended unemployment compensation is payable to 
     such individual.
       (2) Treatment of other unemployment compensation.--After 
     the date on which a State enters into an agreement under this 
     Act, any regular compensation in excess of 26 weeks, any 
     extended compensation, and any additional compensation under 
     any Federal or State law shall be payable to an individual in 
     accordance with the State law after such individual has 
     exhausted any rights to temporary extended unemployment 
     compensation under the agreement.
       (d) Exhaustion of Benefits.--For purposes of subsection 
     (b)(1)(A), 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 the individual has received all regular 
     compensation available to the individual based on employment 
     or wages during the individual's base period; or
       (2) the individual's rights to such compensation have been 
     terminated by reason of the expiration of the benefit year 
     with respect to which such rights existed.
       (e) Weekly Benefit Amount, Terms and Conditions, Etc. 
     Relating to Temporary Extended Unemployment Compensation.--
     For purposes of any agreement under this Act--
       (1) the amount of temporary extended unemployment 
     compensation which shall be payable to an individual for any 
     week of total unemployment shall be equal to the amount of 
     regular compensation (including dependents' allowances) 
     payable to such individual under the State law for a week for 
     total unemployment during such individual's benefit year;
       (2) the terms and conditions of the State law which apply 
     to claims for regular compensation and to the payment thereof 
     shall apply to claims for temporary extended unemployment 
     compensation and the payment thereof, except where 
     inconsistent with the provisions of this Act or with the 
     regulations or operating instructions of the Secretary 
     promulgated to carry out this Act; 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 3 shall not exceed the amount established in 
     such account for such individual.

     SEC. 3. TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION ACCOUNT.

       (a) In General.--Any agreement under this Act 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.
       (b) Amount in Account.--
       (1) In general.--The amount established in an account under 
     subsection (a) shall be equal to 13 times the individual's 
     weekly benefit amount.
       (2) Weekly benefit amount.--For purposes of paragraph (1), 
     an individual's weekly benefit amount for any week is an 
     amount equal to the amount of regular compensation (including 
     dependents' allowances) under the State law payable to the 
     individual for such week for total unemployment.

     SEC. 4. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS ACT.

       (a) General Rule.--There shall be paid to each State that 
     has entered into an agreement under this Act an amount equal 
     to 100 percent of the temporary extended unemployment 
     compensation paid to individuals by the State pursuant to 
     such agreement.
       (b) Determination of Amount.--Sums under subsection (a) 
     payable to any State by reason of such State having an 
     agreement under this Act 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 Act 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.
       (c) Administrative Expenses.--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 Act.

     SEC. 5. 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))), and the Federal 
     unemployment account (as established by section 904(g) of 
     such Act (42 U.S.C. 1104(g))), of the Unemployment Trust Fund 
     (as established by section 904(a) of such Act (42 U.S.C. 
     1104(a))) shall be used, in accordance with subsection (b), 
     for the making of payments (described in section 4(a)) to 
     States having agreements entered into under this Act.
       (b) Certification.--The Secretary shall from time to time 
     certify to the Secretary of the Treasury for payment to each 
     State the sums described in section 4(a) which are payable to 
     such State under this Act. 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 (or, to 
     the extent that there are insufficient funds in that account, 
     from the Federal unemployment account, as so established) to 
     the account of such State in the Unemployment Trust Fund (as 
     so established).

     SEC. 6. 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 any temporary 
     extended unemployment compensation under this Act to which 
     such individual was not entitled, such individual--
       (1) shall be ineligible for any further benefits under this 
     Act 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 any temporary extended unemployment compensation 
     under this Act to which such individuals were not entitled, 
     the State shall require such individuals to repay those 
     benefits to the State agency, except that the State agency 
     may waive such repayment if it determines that--
       (1) the payment of such benefits 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 
     regular compensation or temporary extended unemployment 
     compensation payable to such individual under this Act 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 such individuals 
     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. 7. DEFINITIONS.

       In this Act, the terms ``compensation'', ``regular 
     compensation'', ``extended compensation'', ``additional 
     compensation'', ``benefit year'', ``base period'', ``State'', 
     ``State agency'', ``State

[[Page H479]]

     law'', and ``week'' have the respective meanings given such 
     terms under section 205 of the Federal-State Extended 
     Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

     SEC. 8. APPLICABILITY.

       An agreement entered into under this Act shall apply to 
     weeks of unemployment--
       (1) beginning after the date on which such agreement is 
     entered into; and
       (2) ending before January 6, 2003.

       Amend the title so as to read: ``An Act to provide for 
     temporary unemployment compensation.''.

       House Amendments to Senate Amendments:
       In lieu of the matter proposed to be inserted by the 
     amendment of the Senate to the text of the bill, insert the 
     following:

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Economic 
     Security and Worker Assistance Act of 2002''.
       (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--INDIVIDUAL PROVISIONS

Sec. 101. Supplemental stimulus payments.
Sec. 102. Acceleration of 25 percent individual income tax rate.

                     TITLE II--BUSINESS PROVISIONS

Sec. 201. Special depreciation allowance for certain property acquired 
              after September 10, 2001, and before September 11, 2004.
Sec. 202. Temporary increase in expensing under section 179.
Sec. 203. Alternative minimum tax reform.
Sec. 204. Carryback of certain net operating losses allowed for 5 
              years.
Sec. 205. Recovery period for depreciation of certain leasehold 
              improvements.

          TITLE III--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

                         Subtitle A--Extensions

Sec. 301. Allowance of nonrefundable personal credits against regular 
              and minimum tax liability.
Sec. 302. Credit for qualified electric vehicles.
Sec. 303. Credit for electricity produced from certain renewable 
              resources.
Sec. 304. Work opportunity credit.
Sec. 305. Welfare-to-work credit.
Sec. 306. Deduction for clean-fuel vehicles and certain refueling 
              property.
Sec. 307. Taxable income limit on percentage depletion for oil and 
              natural gas produced from marginal properties.
Sec. 308. Qualified zone academy bonds.
Sec. 309. Cover over of tax on distilled spirits.
Sec. 310. Parity in the application of certain limits to mental health 
              benefits.
Sec. 311. Temporary special rules for taxation of life insurance 
              companies.
Sec. 312. Availability of medical savings accounts.
Sec. 313. Incentives for Indian employment and property on Indian 
              reservations.
Sec. 314. Subpart F exemption for active financing.
Sec. 315. Repeal of requirement for approved diesel or kerosene 
              terminals.

          Subtitle B--Temporary Assistance for Needy Families

Sec. 321. Reauthorization of TANF supplemental grants for population 
              increases for fiscal year 2002.
Sec. 322. 1-year extension of contingency fund under the TANF program.

    TITLE IV--TAX INCENTIVES FOR NEW YORK CITY AND DISTRESSED AREAS

Sec. 401. Tax benefits for area of New York City damaged in terrorist 
              attacks on September 11, 2001.

            TITLE V--MISCELLANEOUS AND TECHNICAL PROVISIONS

              Subtitle A--General Miscellaneous Provisions

Sec. 501. Allowance of electronic 1099's.
Sec. 502. Excluded cancellation of indebtedness income of S corporation 
              not to result in adjustment to basis of stock of 
              shareholders.
Sec. 503. Limitation on use of nonaccrual experience method of 
              accounting.
Sec. 504. Exclusion for foster care payments to apply to payments by 
              qualified placement agencies.
Sec. 505. Interest rate range for additional funding requirements.
Sec. 506. Adjusted gross income determined by taking into account 
              certain expenses of elementary and secondary school 
              teachers.

                   Subtitle B--Technical Corrections

Sec. 511. Amendments related to Economic Growth and Tax Relief 
              Reconciliation Act of 2001.
Sec. 512. Amendments related to Community Renewal Tax Relief Act of 
              2000.
Sec. 513. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 514. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 515. Amendment related to the Balanced Budget Act of 1997.
Sec. 516. Other technical corrections.
Sec. 517. Clerical amendments.
Sec. 518. Additional corrections.

                   TITLE VI--UNEMPLOYMENT ASSISTANCE

Sec. 601. Short title.
Sec. 602. Federal-State agreements.
Sec. 603. Temporary extended unemployment compensation account.
Sec. 604. Payments to States having agreements for the payment of 
              temporary extended unemployment compensation.
Sec. 605. Financing provisions.
Sec. 606. Fraud and overpayments.
Sec. 607. Definitions.
Sec. 608. Applicability.
Sec. 609. Special Reed Act transfer in fiscal year 2002.

          TITLE VII--DISPLACED WORKER HEALTH INSURANCE CREDIT

Sec. 701. Displaced worker health insurance credit.
Sec. 702. Advance payment of displaced worker health insurance credit.

  TITLE VIII--EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY HEALTH 
                        CARE COVERAGE ASSISTANCE

Sec. 801. Employment and training assistance and temporary health care 
              coverage assistance.

            TITLE IX--TEMPORARY STATE HEALTH CARE ASSISTANCE

Sec. 901. Temporary State health care assistance.

   TITLE X--SOCIAL SECURITY HELD HARMLESS; BUDGETARY TREATMENT OF ACT

Sec. 1001. No impact on social security trust funds.
Sec. 1002. Emergency designation.

                     TITLE I--INDIVIDUAL PROVISIONS

     SEC. 101. SUPPLEMENTAL STIMULUS PAYMENTS.

       (a) In General.--Section 6428 (relating to acceleration of 
     10 percent income tax rate bracket benefit for 2001) is 
     amended by adding at the end the following new subsection:
       ``(f) Supplemental Stimulus Payments.--
       ``(1) In general.--Each individual who was an eligible 
     individual for such individual's first taxable year beginning 
     in 2000 and who, before October 16, 2001, filed a return of 
     tax imposed by subtitle A for such taxable year shall be 
     treated as having made a payment against the tax imposed by 
     chapter 1 for such first taxable year in an amount equal to 
     the supplemental refund amount for such taxable year.
       ``(2) Supplemental refund amount.--For purposes of this 
     subsection, the supplemental refund amount is an amount equal 
     to the excess (if any) of--
       ``(A)(i) $600 in the case of taxpayers to whom section 1(a) 
     applies,
       ``(ii) $500 in the case of taxpayers to whom section 1(b) 
     applies, and
       ``(iii) $300 in the case of taxpayers to whom subsections 
     (c) or (d) of section 1 applies, over
       ``(B) the taxpayer's advance refund amount under subsection 
     (e).
       ``(3) Timing of payments.--In the case of any overpayment 
     attributable to this subsection, the Secretary shall, subject 
     to the provisions of this title, refund or credit such 
     overpayment as rapidly as possible.
       ``(4) No interest.--No interest shall be allowed on any 
     overpayment attributable to this subsection.''
       (b) Conforming Amendments.--
       (1) Subparagraph (A) of section 6428(d)(1) is amended by 
     striking ``subsection (e)'' and inserting ``subsections (e) 
     and (f)''.
       (2) Subparagraph (B) of section 6428(d)(1) is amended by 
     striking ``subsection (e)'' and inserting ``subsection (e) or 
     (f)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 102. 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.

[[Page H480]]

                     TITLE II--BUSINESS PROVISIONS

     SEC. 201. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY 
                   ACQUIRED AFTER SEPTEMBER 10, 2001, AND BEFORE 
                   SEPTEMBER 11, 2004.

       (a) In General.--Section 168 (relating to accelerated cost 
     recovery system) is amended by adding at the end the 
     following new subsection:
       ``(k) Special Allowance for Certain Property Acquired After 
     September 10, 2001, and Before September 11, 2004.--
       ``(1) Additional allowance.--In the case of any qualified 
     property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 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, or
       ``(II) which is computer software (as defined in section 
     167(f)(1)(B)) for which a deduction is allowable under 
     section 167(a) without regard to this subsection,
       ``(ii) the original use of which commences with the 
     taxpayer after September 10, 2001,
       ``(iii) which is--

       ``(I) acquired by the taxpayer after September 10, 2001, 
     and before September 11, 2004, but only if no written binding 
     contract for the acquisition was in effect before September 
     11, 2001, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after September 10, 
     2001, and before September 11, 2004, and

       ``(iv) which is placed in service by the taxpayer before 
     January 1, 2005, or, in the case of property described in 
     subparagraph (B), before January 1, 2006.
       ``(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-september 11, 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 September 11, 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.
       ``(iii) Qualified leasehold improvement property.--The term 
     `qualified property' shall not include any qualified 
     leasehold improvement property (as defined in section 
     168(e)(6)).
       ``(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 September 10, 2001, and before September 11, 2004.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(ii), if property--

       ``(I) is originally placed in service after September 10, 
     2001, by a person, and
       ``(II) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service,

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in subclause (II).
       ``(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).''
       (b) Allowance Against Alternative Minimum Tax.--
       (1) In general.--Section 56(a)(1)(A) (relating to 
     depreciation adjustment for alternative minimum tax) is 
     amended by adding at the end the following new clause:
       ``(iii) Additional allowance for certain property acquired 
     after september 10, 2001, and before september 11, 2004.--The 
     deduction under section 168(k) shall be allowed.''
       (2) Conforming amendment.--Clause (i) of section 
     56(a)(1)(A) is amended by striking ``clause (ii)'' both 
     places it appears and inserting ``clauses (ii) and (iii)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 10, 
     2001, in taxable years ending after such date.

     SEC. 202. TEMPORARY INCREASE IN EXPENSING UNDER SECTION 179.

       (a) In General.--The table contained in section 179(b)(1) 
     (relating to dollar limitation) is amended to read as 
     follows:

                                                  ``If thThe applicable
                                                             amount is:
      2001.....................................................$24,000 
      2002 or 2003.............................................$40,000 
      2004 or thereafter.....................................$25,000.''

       (b) Temporary Increase in Amount of Property Triggering 
     Phaseout of Maximum Benefit.--Paragraph (2) of section 179(b) 
     is amended by inserting before the period ``($325,000 in the 
     case of taxable years beginning during 2002 or 2003)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 203. ALTERNATIVE MINIMUM TAX REFORM.

       (a) Repeal of Preference for Depreciation.--
       (1) Paragraph (1) of section 56(a) is amended by adding at 
     the end the following new subparagraph:
       ``(E) Termination.--This paragraph shall not apply to 
     property placed in service in taxable years beginning after 
     December 31, 2001.''
       (2) Paragraph (5) of section 56(a) is amended by adding at 
     the end: ``This paragraph shall not apply to property placed 
     in service in taxable years beginning after December 31, 
     2001.''
       (b) Repeal of 90 Percent Limitation on Foreign Tax 
     Credits.--
       (1) Subsection (a) of section 59 is amended by striking 
     paragraph (2) and by redesignating paragraphs (3) and (4) as 
     paragraphs (2) and (3), respectively.
       (2) Subclause (II) of section 53(d)(1)(B)(i) is amended by 
     striking ``and if section 59(a)(2) did not apply''.
       (c) Repeal of 90 Percent Limitation on Net Operating Loss 
     Deduction.--Subparagraph (A) of section 56(d)(1), as amended 
     by section 204, is amended to read as follows:
       ``(A) the amount of such deduction shall not exceed 
     alternative minimum taxable income determined without regard 
     to such deduction, and''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 204. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED 
                   FOR 5 YEARS.

       (a) In General.--Paragraph (1) of section 172(b) (relating 
     to years to which loss may be carried) is amended by adding 
     at the end the following new subparagraph:
       ``(H) In the case of a taxpayer which has a net operating 
     loss for any taxable year ending during 2001 or 2002, 
     subparagraph (A)(i) shall be applied by substituting `5' for 
     `2' and subparagraph (F) shall not apply.''
       (b) Election To Disregard 5-Year Carryback.--Section 172 
     (relating to net operating loss deduction) is amended by 
     redesignating subsection (j) as subsection (k) and by 
     inserting after subjection (i) the following new subsection:
       ``(j) Election To Disregard 5-Year Carryback for Certain 
     Net Operating Losses.--Any taxpayer entitled to a 5-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) 
     (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 2001 or 2002, or
       ``(II) alternative minimum taxable income determined 
     without regard to such deduction

[[Page H481]]

     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, 
     2002.
       (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, 
     2000.

     SEC. 205. RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN 
                   LEASEHOLD IMPROVEMENTS.

       (a) 15-Year Recovery Period.--Subparagraph (E) of section 
     168(e)(3) (relating to 15-year property) is amended by 
     striking ``and'' at the end of clause (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following new clause:
       ``(iv) any qualified leasehold improvement property.''
       (b) Qualified Leasehold Improvement Property.--Subsection 
     (e) of section 168 is amended by adding at the end the 
     following new paragraph:
       ``(6) Qualified leasehold improvement property.--
       ``(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) Commitment to lease treated as lease.--A 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.--
       ``(i) In general.--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.
       ``(ii) Exception for changes in form of business.--Property 
     shall not cease to be qualified leasehold improvement 
     property under clause (i) by reason of--

       ``(I) death,
       ``(II) a transaction to which section 381(a) applies, or
       ``(III) a mere change in the form of conducting the trade 
     or business so long as the property is retained in such trade 
     or business as qualified leasehold improvement property and 
     the taxpayer retains a substantial interest in such trade or 
     business.

       ``(iii) Treatment of failures to maintain substantial 
     interest in trade or business.--In the case of property to 
     which clause (ii)(III) would apply but for the failure of the 
     taxpayer to retain a substantial interest in a trade or 
     business, the remaining adjusted basis of such property shall 
     be depreciated under this section over 39 years.''
       (c) Requirement To Use Straight Line Method.--Paragraph (3) 
     of section 168(b) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Qualified leasehold improvement property described in 
     subsection (e)(6).''
       (d) Alternative System.--The table contained in section 
     168(g)(3)(B) is amended by adding at the end the following 
     new item:

  ``(E)(iv).......................................................15''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to qualified leasehold improvement property 
     placed in service after September 10, 2001.

          TITLE III--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

                         Subtitle A--Extensions

     SEC. 301. 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, 2002, and 2003.--'', and
       (2) by striking ``during 2000 or 2001,'' and inserting 
     ``during 2000, 2001, 2002, or 2003,''.
       (b) Conforming Amendments.--
       (1) Section 904(h) is amended by striking ``during 2000 or 
     2001'' and inserting ``during 2000, 2001, 2002, or 2003''.
       (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 and 2003.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 302. 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, 2003,'', and
       (B) in subparagraphs (A), (B), and (C), by striking 
     ``2002'', ``2003'', and ``2004'', respectively, and inserting 
     ``2004'', ``2005'', and ``2006'', respectively, and
       (2) in subsection (e), by striking ``December 31, 2004'' 
     and inserting ``December 31, 2006''.
       (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, 2007.''
       (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 to property placed in service after December 31, 
     2001.

     SEC. 303. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
                   RENEWABLE RESOURCES.

       (a) In General.--Subparagraphs (A), (B), and (C) of section 
     45(c)(3) are both amended by striking ``2002'' and inserting 
     ``2004''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to facilities placed in service after December 
     31, 2001.

     SEC. 304. WORK OPPORTUNITY CREDIT.

       (a) In General.--Subparagraph (B) of section 51(c)(4) is 
     amended by striking ``2001'' and inserting ``2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals who begin work for the employer 
     after December 31, 2001.

     SEC. 305. WELFARE-TO-WORK CREDIT.

       (a) In General.--Subsection (f) of section 51A is amended 
     by striking ``2001'' and inserting ``2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals who begin work for the employer 
     after December 31, 2001.

     SEC. 306. 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, 2003,'', and
       (B) in clauses (i), (ii), and (iii), by striking ``2002'', 
     ``2003'', and ``2004'', respectively, and inserting ``2004'', 
     ``2005'', and ``2006'', respectively, and
       (2) in subsection (f), by striking ``December 31, 2004'' 
     and inserting ``December 31, 2006''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to property placed in service after December 31, 
     2001.

     SEC. 307. 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 ``2004''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 308. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``2000, and 2001'' and inserting ``2000, 
     2001, 2002, and 2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 309. 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, 2004''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to articles brought into the United States after 
     December 31, 2001.

     SEC. 310. 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 
     10, 2002, and
       ``(2) after December 31, 2003.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to plan years beginning after December 31, 2000.

[[Page H482]]

     SEC. 311. 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, 
     2002, or 2003.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 312. 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 January 1, 2002.

     SEC. 313. INCENTIVES FOR INDIAN EMPLOYMENT AND PROPERTY ON 
                   INDIAN RESERVATIONS.

       (a) Employment.--Subsection (f) of section 45A is amended 
     by striking ``December 31, 2003'' and inserting ``December 
     31, 2004''.
       (b) Property.--Paragraph (8) of section 168(j) is amended 
     by striking ``December 31, 2003'' and inserting ``December 
     31, 2004''.

     SEC. 314. 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, 2007'', and
       (B) by striking ``December 31, 2001'' and inserting 
     ``December 31, 2006''.
       (2) Section 954(h)(9) is amended by striking ``January 1, 
     2002'' and inserting ``January 1, 2007''.
       (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. 315. 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. 321. 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. 322. 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''.

    TITLE IV--TAX INCENTIVES FOR NEW YORK CITY AND DISTRESSED AREAS

     SEC. 401. 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 period, any employee of 
     a New York Liberty Zone business if substantially all the 
     services performed during such period by such employee for 
     such business are performed in the New York Liberty Zone.
       ``(B) Inclusion of certain employees outside the new york 
     liberty zone.--
       ``(i) In general.--In the case of a New York Liberty Zone 
     business described in subclause (II) of subparagraph (C)(i), 
     the term `New York Liberty Zone business employee' includes 
     any employee of such business (not described in subparagraph 
     (A)) if substantially all the services performed during such 
     period by such employee for such business are performed in 
     the City of New York, New York.
       ``(ii) Limitation.--The number of employees of such a 
     business that are treated as New York Liberty zone business 
     employees on any day by reason of clause (i) shall not exceed 
     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 New York Liberty Zone business 
     employees (determined without regard to this subparagraph) of 
     such business on the day to which the limitation is being 
     applied.

     The Secretary may require any trade or business to have the 
     number determined under subclause (I) verified by the New 
     York State Department of Labor.
       ``(C) New york liberty zone business.--
       ``(i) In general.--The term `New York Liberty Zone 
     business' means any trade or 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 a result of the physical 
     destruction or damage of such place of business by the 
     September 11, 2001, terrorist attack.

       ``(ii) Credit not allowed for large businesses.--The term 
     `New York Liberty Zone business' shall not include any trade 
     or business for any taxable year if such trade or business 
     employed an average of more than 200 employees on business 
     days during the taxable year.
       ``(D) Special rules for determining amount of credit.--For 
     purposes of applying subpart F 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 (B),
       ``(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 
     wages paid or incurred by the employer to individuals who are 
     New York Liberty Zone business employees of such employer for 
     work performed during calendar year 2002 or 2003.
       ``(II) Only first $6,000 of wages per calendar 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 calendar year.

       ``(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 section 168 applies which has a recovery 
     period of 20 years or less or which is water utility 
     property,

[[Page H483]]

       ``(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, and
       ``(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 only to the extent it rehabilitates real 
     property damaged, or replaces real 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 real property destroyed or 
     condemned if, as part of an integrated plan, such property 
     replaces real property which is included in a continuous area 
     which includes real property destroyed or condemned.
       ``(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) 30 percent additional allowance property.--Such term 
     shall not include property to which section 168(k) applies.
       ``(iii) Qualified leasehold improvement property.--Such 
     term shall not include any qualified leasehold improvement 
     property (as defined in section 168(e)(6)).
       ``(iv) 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.
       ``(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) is 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) 5-Year Recovery Period for Depreciation of Certain 
     Leasehold Improvements.--
       ``(1) In general.--For purposes of section 168, the term 
     `5-year property' includes any qualified New York Liberty 
     Zone leasehold improvement property.
       ``(2) Qualified new york liberty zone leasehold improvement 
     property.--For purposes of this section, the term `qualified 
     New York Liberty Zone leasehold improvement property' means 
     qualified leasehold improvement property (as defined in 
     section 168(e)(6)) if--
       ``(A) such building is located in the New York Liberty 
     Zone,
       ``(B) such improvement is placed in service after September 
     10, 2001, and before January 1, 2007, and
       ``(C) no written binding contract for such improvement was 
     in effect before September 11, 2001.
       ``(3) Requirement to use straight line method.--The 
     applicable depreciation method under section 168 shall be the 
     straight line method in the case of qualified New York 
     Liberty Zone leasehold improvement property.
       ``(4) 9-year recovery period under alternative system.--For 
     purposes of section 168(g), the class life of qualified New 
     York Liberty Zone leasehold improvement property shall be 9 
     years.
       ``(d) 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,
       ``(C) the Governor or the Mayor designates such bond for 
     purposes of this section, and
       ``(D) such bond is issued after the the date of the 
     enactment of this section and before January 1, 2005.
       ``(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 and 
     not to exceed $4,000,000,000 may be designated by the Mayor.
       ``(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) residential rental property shall not exceed 
     $1,600,000,000, 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.

     The limitations under clauses (i), (ii), and (iii) shall be 
     allocated proportionately between the bonds designated by the 
     Governor and the bonds designated by the Mayor in proportion 
     to the respective amounts of bonds designated by each.
       ``(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, and 
     renovation of--
       ``(i) nonresidential real property and residential rental 
     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 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.
       ``(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 cap) 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 a 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.
       ``(e) 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 property which is functionally 
     related and subordinate to facilities located within the City 
     of New York for the furnishing of water), one additional 
     advanced refunding after the date of the enactment of this 
     section and before January 1, 2005, shall be allowed under 
     the applicable rules of section 149(d) if--
       ``(A) the Governor or the Mayor designates the advance 
     refunding bond for purposes of this subsection, and
       ``(B) the requirements of paragraph (4) are met.
       ``(2) Bonds described.--A bond is described in this 
     paragraph if such bond was outstanding on September 11, 2001, 
     and is--

[[Page H484]]

       ``(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 Municipal Water Finance Authority or the 
     Metropolitan Transportation Authority 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 the State of New 
     York or the City of New York, New York.
       ``(3) Aggregate limit.--For purposes of paragraph (1), the 
     maximum aggregate face amount of bonds which may be 
     designated under this subsection by the Governor shall not 
     exceed $4,500,000,000 and the maximum aggregate face amount 
     of bonds which may be designated under this subsection by the 
     Mayor shall not exceed $4,500,000,000.
       ``(4) Additional requirements.--The requirements of this 
     paragraph are met with respect to any advance refunding of a 
     bond described in paragraph (2) if--
       ``(A) no advance refundings of such bond would be allowed 
     under any provision of law after September 11, 2001,
       ``(B) the advance refunding bond is the only other 
     outstanding bond with respect to the refunded bond, and
       ``(C) the requirements of section 148 are met with respect 
     to all bonds issued under this subsection.
       ``(f) 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.
       ``(g) 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.
       ``(h) 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.
       ``(i) References to Governor and Mayor.--For purposes of 
     this section, the terms `Governor' and `Mayor' mean the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York, respectively.''
       (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 December 31, 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.''

            TITLE V--MISCELLANEOUS AND TECHNICAL PROVISIONS

              Subtitle A--General Miscellaneous Provisions

     SEC. 501. ALLOWANCE OF ELECTRONIC 1099'S.

       Any person required to furnish a statement under any 
     section of subpart B of part III of subchapter A of chapter 
     61 of the Internal Revenue Code of 1986 for any taxable year 
     ending after the date of the enactment of this Act, may 
     electronically furnish such statement (without regard to any 
     first class mailing requirement) to any recipient who has 
     consented to the electronic provision of the statement in a 
     manner similar to the one permitted under regulations issued 
     under section 6051 of such Code or in such other manner as 
     provided by the Secretary.

     SEC. 502. EXCLUDED CANCELLATION OF INDEBTEDNESS INCOME OF S 
                   CORPORATION NOT TO RESULT IN ADJUSTMENT TO 
                   BASIS OF STOCK OF SHAREHOLDERS.

       (a) In General.--Subparagraph (A) of section 108(d)(7) 
     (relating to certain provisions to be applied at corporate 
     level) is amended by inserting before the period ``, 
     including by not taking into account under section 1366(a) 
     any amount excluded under subsection (a) of this section''.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall apply to discharges of 
     indebtedness after October 11, 2001, in taxable years ending 
     after such date.
       (2) Exception.--The amendment made by this section shall 
     not apply to any discharge of indebtedness before March 1, 
     2002, pursuant to a plan of reorganization filed with a 
     bankruptcy court on or before October 11, 2001.

     SEC. 503. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD 
                   OF ACCOUNTING.

       (a) In General.--Paragraph (5) of section 448(d) is amended 
     to read as follows:
       ``(5) Special rule for certain services.--
       ``(A) In general.--In the case of any person using an 
     accrual method of accounting with respect to amounts to be 
     received for the performance of services by such person, such 
     person shall not be required to accrue any portion of such 
     amounts which (on the basis of such person's experience) will 
     not be collected if--
       ``(i) such services are in fields referred to in paragraph 
     (2)(A), or
       ``(ii) such person meets the gross receipts test of 
     subsection (c) for all prior taxable years.
       ``(B) Exception.--This paragraph shall not apply to any 
     amount if interest is required to be paid on such amount or 
     there is any penalty for failure to timely pay such amount.
       ``(C) Regulations.--The Secretary shall prescribe 
     regulations to permit taxpayers to determine amounts referred 
     to in subparagraph (A) using computations or formulas which, 
     based on experience, accurately reflect the amount of income 
     that will not be collected by such person. A taxpayer may 
     adopt, or request consent of the Secretary to change to, a 
     computation or formula that clearly reflects the taxpayer's 
     experience. A request under the preceding sentence shall be 
     approved if such computation or formula clearly reflects the 
     taxpayer's experience.''.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Change in method of accounting.--In the case of any 
     taxpayer required by the amendments made by this section to 
     change its method of accounting for its first taxable year 
     ending after the date of the enactment of this Act--
       (A) such change shall be treated as initiated by the 
     taxpayer,
       (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury, and
       (C) the net amount of the adjustments required to be taken 
     into account by the taxpayer under section 481 of the 
     Internal Revenue Code of 1986 shall be taken into account 
     over a period of 4 years (or if less, the number of taxable 
     years that the taxpayer used the method permitted under 
     section 448(d)(5) of such Code as in effect before the date 
     of the enactment of this Act) beginning with such first 
     taxable year.

     SEC. 504. 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

[[Page H485]]

     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.

     SEC. 505. INTEREST RATE RANGE FOR ADDITIONAL FUNDING 
                   REQUIREMENTS.

       (a) Amendments to the Internal Revenue Code of 1986.--
       (1) Special rule.--Clause (i) of section 412(l)(7)(C) 
     (relating to interest rate) is amended by adding at the end 
     the following new subclause:

       ``(III) Special rule for 2002 and 2003.--For a plan year 
     beginning in 2002 or 2003, notwithstanding subclause (I), in 
     the case that the rate of interest used under subsection 
     (b)(5) exceeds the highest rate permitted under subclause 
     (I), the rate of interest used to determine current liability 
     under this subsection may exceed the rate of interest 
     otherwise permitted under subclause (I); except that such 
     rate of interest shall not exceed 120 percent of the weighted 
     average referred to in subsection (b)(5)(B)(ii).''

       (2) Quarterly contributions.--Subsection (m) of section 412 
     is amended by adding at the end the following new paragraph:
       ``(7) Special rules for 2002 and 2004.--In any case in 
     which the interest rate used to determine current liability 
     is determined under subsection (l)(7)(C)(i)(III)--
       ``(A) 2002.--For purposes of applying paragraphs (1) and 
     (4)(B)(ii) for plan years beginning in 2002, the current 
     liability for the preceding plan year shall be redetermined 
     using 120 percent as the specified percentage determined 
     under subsection (l)(7)(C)(i)(II).
       ``(B) 2004.--For purposes of applying paragraphs (1) and 
     (4)(B)(ii) for plan years beginning in 2004, the current 
     liability for the preceding plan year shall be redetermined 
     using 105 percent as the specified percentage determined 
     under subsection (l)(7)(C)(i)(II).''
       (b) Amendments to the Employee Retirement Income Security 
     Act of 1974.--
       (1) Special rule.--Clause (i) of section 302(d)(7)(C) of 
     such Act (29 U.S.C. 1082(d)(7)(C)) is amended by adding at 
     the end the following new subclause:

       ``(III) Special rule for 2002 and 2003.--For a plan year 
     beginning in 2002 or 2003, notwithstanding subclause (I), in 
     the case that the rate of interest used under subsection 
     (b)(5) exceeds the highest rate permitted under subclause 
     (I), the rate of interest used to determine current liability 
     under this subsection may exceed the rate of interest 
     otherwise permitted under subclause (I); except that such 
     rate of interest shall not exceed 120 percent of the weighted 
     average referred to in subsection (b)(5)(B)(ii).''

       (2) Quarterly contributions.--Subsection (e) of section 302 
     of such Act (29 U.S.C. 1082) is amended by adding at the end 
     the following new paragraph:
       ``(7) Special rules for 2002 and 2004.--In any case in 
     which the interest rate used to determine current liability 
     is determined under subsection (d)(7)(C)(i)(III)--
       ``(A) 2002.--For purposes of applying paragraphs (1) and 
     (4)(B)(ii) for plan years beginning in 2002, the current 
     liability for the preceding plan year shall be redetermined 
     using 120 percent as the specified percentage determined 
     under subsection (d)(7)(C)(i)(II).
       ``(B) 2004.--For purposes of applying paragraphs (1) and 
     (4)(B)(ii) for plan years beginning in 2004, the current 
     liability for the preceding plan year shall be redetermined 
     using 105 percent as the specified percentage determined 
     under subsection (d)(7)(C)(i)(II).''
       (c) PBGC.--Clause (iii) of section 4006(a)(3)(E) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1306(a)(3)(E)) is amended by adding at the end the following 
     new subclause:
       ``(IV) In the case of plan years beginning after December 
     31, 2001, and before January 1, 2004, subclause (II) shall be 
     applied by substituting `100 percent' for `85 percent'. 
     Subclause (III) shall be applied for such years without 
     regard to the preceding sentence. Any reference to this 
     clause by any other sections or subsections shall be treated 
     as a reference to this clause without regard to this 
     subclause.''

     SEC. 506. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO 
                   ACCOUNT CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Section 62(a)(2) (relating to certain 
     trade and business deductions of employees) is amended by 
     adding at the end the following:
       ``(D) Certain expenses of elementary and secondary school 
     teachers.--In the case of taxable years beginning during 2002 
     or 2003, the deductions allowed by section 162 which consist 
     of expenses, not in excess of $250, paid or incurred by an 
     eligible educator in connection with books, supplies (other 
     than nonathletic supplies for courses of instruction in 
     health or physical education), computer equipment (including 
     related software and services) and other equipment, and 
     supplementary materials used by the eligible educator in the 
     classroom.''.
       (b) Eligible Educator.--Section 62 is amended by adding at 
     the end the following:
       ``(d) Definition; Special Rules.--
       ``(1) Eligible educator.--
       ``(A) In general.--For purposes of subsection (a)(2)(D), 
     the term `eligible educator' means, with respect to any 
     taxable year, an individual who is a kindergarten through 
     grade 12 teacher, instructor, counselor, principal, or aide 
     in a school for at least 900 hours during a school year.
       ``(B) School.--The term `school' means any school which 
     provides elementary education or secondary education 
     (kindergarten through grade 12), as determined under State 
     law.
       ``(2) Coordination with exclusions.--A deduction shall be 
     allowed under subsection (a)(2)(D) for expenses only to the 
     extent the amount of such expenses exceeds the amount 
     excludable under section 135, 529(c)(1), or 530(d)(2) for the 
     taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

                   Subtitle B--Technical Corrections

     SEC. 511. AMENDMENTS RELATED TO ECONOMIC GROWTH AND TAX 
                   RELIEF RECONCILIATION ACT OF 2001.

       (a) Amendments Related to Section 101 of the Act.--
       (1) In general.--Subsection (b) of section 6428 is amended 
     to read as follows:
       ``(b) Credit Treated as Nonrefundable Personal Credit.--For 
     purposes of this title, the credit allowed under this section 
     shall be treated as a credit allowable under subpart A of 
     part IV of subchapter A of chapter 1.''.
       (2) Conforming amendments.--
       (A) Subsection (d) of section 6428 is amended to read as 
     follows:
       ``(d) Coordination with Advance Refunds of Credit.--
       ``(1) In general.--The amount of credit which would (but 
     for this paragraph) be allowable under this section shall be 
     reduced (but not below zero) by the aggregate refunds and 
     credits made or allowed to the taxpayer under subsection (e). 
     Any failure to so reduce the credit shall be treated as 
     arising out of a mathematical or clerical error and assessed 
     according to section 6213(b)(1).
       ``(2) Joint returns.--In the case of a refund or credit 
     made or allowed under subsection (e) with respect to a joint 
     return, half of such refund or credit shall be treated as 
     having been made or allowed to each individual filing such 
     return.''.
       (B) Paragraph (2) of section 6428(e) is amended to read as 
     follows:
       ``(2) Advance refund amount.--For purposes of paragraph 
     (1), the advance refund amount is the amount that would have 
     been allowed as a credit under this section for such first 
     taxable year if--
       ``(A) this section (other than subsections (b) and (d) and 
     this subsection) had applied to such taxable year, and
       ``(B) the credit for such taxable year were not allowed to 
     exceed the excess (if any) of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under part IV of 
     subchapter A of chapter 1 (other than the credits allowable 
     under subpart C thereof, relating to refundable credits).''
       (b) Amendment Related to Section 201 of the Act.--
     Subparagraph (B) of section 24(d)(1) is amended by striking 
     ``amount of credit allowed by this section'' and inserting 
     ``aggregate amount of credits allowed by this subpart''.
       (c) Amendments Related to Section 202 of the Act.--
       (1) Corrections to credit for adoption expenses.--
       (A) Paragraph (1) of section 23(a) is amended to read as 
     follows:
       ``(1) In general.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter the amount of the qualified adoption expenses paid or 
     incurred by the taxpayer.''
       (B) Subsection (a) of section 23 is amended by adding at 
     the end the following new paragraph:
       ``(3) $10,000 credit for adoption of child with special 
     needs regardless of expenses.--In the case of an adoption of 
     a child with special needs which becomes final during a 
     taxable year, the taxpayer shall be treated as having paid 
     during such year qualified adoption expenses with respect to 
     such adoption in an amount equal to the excess (if any) of 
     $10,000 over the aggregate qualified adoption expenses 
     actually paid or incurred by the taxpayer with respect to 
     such adoption during such taxable year and all prior taxable 
     years.''
       (C) Paragraph (2) of section 23(a) is amended by striking 
     the last sentence.
       (D) Paragraph (1) of section 23(b) is amended by striking 
     ``subsection (a)(1)(A)'' and inserting ``subsection (a)''.
       (E) Subsection (i) of section 23 is amended by striking 
     ``the dollar limitation in subsection (b)(1)'' and inserting 
     ``the dollar amounts in subsections (a)(3) and (b)(1)''.
       (F) Expenses paid or incurred during any taxable year 
     beginning before January 1, 2002, may be taken into account 
     in determining the credit under section 23 of the Internal 
     Revenue Code of 1986 only to the extent the aggregate of such 
     expenses does not exceed the applicable limitation under 
     section 23(b)(1) of such Code as in effect on the day before 
     the date of the enactment of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001.
       (2) Corrections to exclusion for employer-provided adoption 
     assistance.--
       (A) Subsection (a) of section 137 is amended to read as 
     follows:
       ``(a) Exclusion.--

[[Page H486]]

       ``(1) In general.--Gross income of an employee does not 
     include amounts paid or expenses incurred by the employer for 
     qualified adoption expenses in connection with the adoption 
     of a child by an employee if such amounts are furnished 
     pursuant to an adoption assistance program.
       ``(2) $10,000 exclusion for adoption of child with special 
     needs regardless of expenses.--In the case of an adoption of 
     a child with special needs which becomes final during a 
     taxable year, the qualified adoption expenses with respect to 
     such adoption for such year shall be increased by an amount 
     equal to the excess (if any) of $10,000 over the actual 
     aggregate qualified adoption expenses with respect to such 
     adoption during such taxable year and all prior taxable 
     years.''
       (B) Paragraph (2) of section 137(b) is amended by striking 
     ``subsection (a)(1)'' and inserting ``subsection (a)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2002; except that the amendments made by paragraphs (1)(C), 
     (1)(D), and (2)(B) shall apply to taxable years beginning 
     after December 31, 2001.
       (d) Amendments Related to Section 205 of the Act.--
       (1) Section 45F(d)(4)(B) is amended by striking ``subpart 
     A, B, or D of this part'' and inserting ``this chapter or for 
     purposes of section 55''.
       (2) Section 38(b)(15) is amended by striking ``45F'' and 
     inserting ``45F(a)''.
       (e) Amendments Related to Section 301 of the Act.--
       (1) Section 63(c)(2) is amended--
       (A) in subparagraph (A), by striking ``subparagraph (C)'' 
     and inserting ``subparagraph (D)'',
       (B) by striking ``or'' at the end of subparagraph (B),
       (C) by redesignating subparagraph (C) as subparagraph (D),
       (D) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) one-half of the amount allowable under subparagraph 
     (A) in the case of a married individual filing a separate 
     return, or'', and
       (E) by inserting the following flush sentence at the end:

     ``If any amount determined under subparagraph (A) is not a 
     multiple of $50, such amount shall be rounded to the next 
     lowest multiple of $50.''
       (2)(A) Section 63(c)(4) is amended by striking ``paragraph 
     (2) or (5)'' and inserting ``paragraph (2)(B), (2)(D), or 
     (5)''.
       (B) Section 63(c)(4)(B)(i) is amended by striking 
     ``paragraph (2)'' and inserting ``paragraph (2)(B), 
     (2)(D),''.
       (C) Section 63(c)(4) is amended by striking the flush 
     sentence at the end (as added by section 301(c)(2) of Public 
     Law 107-17).
       (f) Amendment Related to Section 401 of the Act.--Section 
     530(d)(4)(B)(iv) is amended by striking ``because the 
     taxpayer elected under paragraph (2)(C) to waive the 
     application of paragraph (2)'' and inserting ``by application 
     of paragraph (2)(C)(i)(II)''.
       (g) Amendments Related to Section 511 of the Act.--
       (1) Section 2511(c) is amended by striking ``taxable gift 
     under section 2503,'' and inserting ``transfer of property by 
     gift,''.
       (2) Section 2101(b) is amended by striking the last 
     sentence.
       (h) Amendment Related to Section 532 of the Act.--Section 
     2016 is amended by striking ``any State, any possession of 
     the United States, or the District of Columbia,''.
       (i) Amendments Relating to Section 602 of the Act.--
       (1) Subparagraph (A) of section 408(q)(3) is amended to 
     read as follows:
       ``(A) Qualified employer plan.--The term `qualified 
     employer plan' has the meaning given such term by section 
     72(p)(4)(A)(i); except that such term shall also include an 
     eligible deferred compensation plan (as defined in section 
     457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (2) Section 4(c) of Employee Retirement Income Security Act 
     of 1974 is amended--
       (A) by inserting ``and part 5 (relating to administration 
     and enforcement)'' before the period at the end, and
       (B) by adding at the end the following new sentence: ``Such 
     provisions shall apply to such accounts and annuities in a 
     manner similar to their application to a simplified employee 
     pension under section 408(k) of the Internal Revenue Code of 
     1986.''.
       (j) Amendments Relating to Section 611 of the Act.--
       (1) Section 408(k) is amended--
       (A) in paragraph (2)(C) by striking ``$300'' and inserting 
     ``$450'', and
       (B) in paragraph (8) by striking ``$300'' both places it 
     appears and inserting ``$450''.
       (2) Section 409(o)(1)(C)(ii) is amended--
       (A) by striking ``$500,000'' both places it appears and 
     inserting ``$800,000'', and
       (B) by striking ``$100,000'' and inserting ``$160,000''.
       (3) Section 611(i) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is amended by adding at the end 
     the following new paragraph:
       ``(3) Special rule.--In the case of plan that, on June 7, 
     2001, incorporated by reference the limitation of section 
     415(b)(1)(A) of the Internal Revenue Code of 1986, section 
     411(d)(6) of such Code and section 204(g)(1) of the Employee 
     Retirement Income Security Act of 1974 do not apply to a plan 
     amendment that--
       ``(A) is adopted on or before June 30, 2002,
       ``(B) reduces benefits to the level that would have applied 
     without regard to the amendments made by subsection (a) of 
     this section, and
       ``(C) is effective no earlier than the years described in 
     paragraph (2).''.
       (k) Amendments Relating to Section 613 of the Act.--
       (1) Section 416(c)(1)(C)(iii) is amended by striking 
     ``Exception for frozen plan'' and inserting ``Exception for 
     plan under which no key employee (or former key employee) 
     benefits for plan year''.
       (2) Section 416(g)(3)(B) is amended by striking 
     ``separation from service'' and inserting ``severance from 
     employment''.
       (l) Amendments Relating to Sections 614 and 616 of the 
     Act.--
       (1) Section 404(a)(12) is amended by striking ``(9),'' and 
     inserting ``(9) and subsection (h)(1)(C),''.
       (2) Section 404(n) is amended by striking ``subsection 
     (a),'' and inserting ``subsection (a) or paragraph (1)(C) of 
     subsection (h)''.
       (3) Section 402(h)(2)(A) is amended by striking ``15 
     percent'' and inserting ``25 percent''.
       (4) Section 404(a)(7)(C) is amended to read as follows:
       ``(C) Paragraph not to apply in certain cases.--
       ``(i) Beneficiary test.--This paragraph shall not have the 
     effect of reducing the amount otherwise deductible under 
     paragraphs (1), (2), and (3), if no employee is a beneficiary 
     under more than 1 trust or under a trust and an annuity plan.
       ``(ii) Elective deferrals.--If, in connection with 1 or 
     more defined contribution plans and 1 or more defined benefit 
     plans, no amounts (other than elective deferrals (as defined 
     in section 402(g)(3))) are contributed to any of the defined 
     contribution plans for the taxable year, then subparagraph 
     (A) shall not apply with respect to any of such defined 
     contribution plans and defined benefit plans.''.
       (m) Amendment Relating to Section 618 of the Act.--Section 
     25B(d)(2)(A) is amended to read as follows:
       ``(A) In general.--The qualified retirement savings 
     contributions determined under paragraph (1) shall be reduced 
     (but not below zero) by the aggregate distributions received 
     by the individual during the testing period from any entity 
     of a type to which contributions under paragraph (1) may be 
     made. The preceding sentence shall not apply to the portion 
     of any distribution which is not includible in gross income 
     by reason of a trustee-to-trustee transfer or a rollover 
     distribution.''.
       (n) Amendments Relating to Section 619 of the Act.--
       (1) Section 45E(e)(1) is amended by striking ``(n)'' and 
     inserting ``(m)''.
       (2) Section 619(d) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is amended by striking 
     ``established'' and inserting ``first effective''.
       (o) Amendments Relating to Section 631 of the Act.--
       (1) Section 402(g)(1) is amended by adding at the end the 
     following:
       ``(C) Catch-up contributions.--In addition to subparagraph 
     (A), in the case of an eligible participant (as defined in 
     section 414(v)), gross income shall not include elective 
     deferrals in excess of the applicable dollar amount under 
     subparagraph (B) to the extent that the amount of such 
     elective deferrals does not exceed the applicable dollar 
     amount under section 414(v)(2)(B)(i) for the taxable year 
     (without regard to the treatment of the elective deferrals by 
     an applicable employer plan under section 414(v)).''.
       (2) Section 401(a)(30) is amended by striking ``402(g)(1)'' 
     and inserting ``402(g)(1)(A)''.
       (3) Section 414(v)(2) is amended by adding at the end the 
     following:
       ``(D) Aggregation of plans.--For purposes of this 
     paragraph, plans described in clauses (i), (ii), and (iv) of 
     paragraph (6)(A) that are maintained by the same employer (as 
     determined under subsection (b), (c), (m) or (o)) shall be 
     treated as a single plan, and plans described in clause (iii) 
     of paragraph (6)(A) that are maintained by the same employer 
     shall be treated as a single plan.''.
       (4) Section 414(v)(3)(A)(i) is amended by striking 
     ``section 402(g), 402(h), 403(b), 404(a), 404(h), 408(k), 
     408(p), 415, or 457'' and inserting ``section 401(a)(30), 
     402(h), 403(b), 408, 415(c), and 457(b)(2) (determined 
     without regard to section 457(b)(3))''.
       (5) Section 414(v)(3)(B) is amended by striking ``section 
     401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 
     403(b)(12), 408(k), 408(p), 408B, 410(b), or 416'' and 
     inserting ``section 401(a)(4), 401(k)(3), 401(k)(11), 
     403(b)(12), 408(k), 410(b), or 416''.
       (6) Section 414(v)(4)(B) is amended by inserting before the 
     period at the end the following: ``, except that a plan 
     described in clause (i) of section 410(b)(6)(C) shall not be 
     treated as a plan of the employer until the expiration of the 
     transition period with respect to such plan (as determined 
     under clause (ii) of such section)''.
       (7) Section 414(v)(5) is amended--
       (A) by striking ``, with respect to any plan year,'' in the 
     matter preceding subparagraph (A),
       (B) by amending subparagraph (A) to read as follows:
       ``(A) who would attain age 50 by the end of the taxable 
     year,'', and
       (C) in subparagraph (B) by striking ``plan year'' and 
     inserting ``plan (or other applicable) year''.
       (8) Section 414(v)(6)(C) is amended to read as follows:

[[Page H487]]

       ``(C) Exception for section 457 plans.--This subsection 
     shall not apply to a participant for any year for which a 
     higher limitation applies to the participant under section 
     457(b)(3).''.
       (9) Section 457(e) is amended by adding at the end the 
     following new paragraph:
       ``(18) Coordination with catch-up contributions for 
     individuals age 50 or older.-- In the case of an individual 
     who is an eligible participant (as defined by section 414(v)) 
     and who is a participant in an eligible deferred compensation 
     plan of an employer described in paragraph (1)(A), 
     subsections (b)(3) and (c) shall be applied by substituting 
     for the amount otherwise determined under the applicable 
     subsection the greater of--
       ``(A) the sum of--
       ``(i) the plan ceiling established for purposes of 
     subsection (b)(2) (without regard to subsection (b)(3)), plus
       ``(ii) the applicable dollar amount for the taxable year 
     determined under section 414(v)(2)(B)(i), or
       ``(B) the amount determined under the applicable subsection 
     (without regard to this paragraph).''.
       (p) Amendments Relating to Section 632 of the Act.--
       (1) Section 403(b)(1) is amended in the matter following 
     subparagraph (E) by striking ``then amounts contributed'' and 
     all that follows and inserting the following:
       ``then contributions and other additions by such employer 
     for such annuity contract shall be excluded from the gross 
     income of the employee for the taxable year to the extent 
     that the aggregate of such contributions and additions (when 
     expressed as an annual addition (within the meaning of 
     section 415(c)(2))) does not exceed the applicable limit 
     under section 415. The amount actually distributed to any 
     distributee under such contract shall be taxable to the 
     distributee (in the year in which so distributed) under 
     section 72 (relating to annuities). For purposes of applying 
     the rules of this subsection to contributions and other 
     additions by an employer for a taxable year, amounts 
     transferred to a contract described in this paragraph by 
     reason of a rollover contribution described in paragraph (8) 
     of this subsection or section 408(d)(3)(A)(ii) shall not be 
     considered contributed by such employer.''.
       (2) Section 403(b) is amended by striking paragraph (6).
       (3) Section 403(b)(3) is amended--
       (A) in the first sentence by inserting the following before 
     the period at the end: ``, and which precedes the taxable 
     year by no more than five years'', and
       (B) in the second sentence by striking ``or any amount 
     received by a former employee after the fifth taxable year 
     following the taxable year in which such employee was 
     terminated''.
       (4) Section 415(c)(7) is amended to read as follows:
       ``(7) Special rules relating to church plans.--
       ``(A) Alternative contribution limitation.--
       ``(i) In general.--Notwithstanding any other provision of 
     this subsection, at the election of a participant who is an 
     employee of a church or a convention or association of 
     churches, including an organization described in section 
     414(e)(3)(B)(ii), contributions and other additions for an 
     annuity contract or retirement income account described in 
     section 403(b) with respect to such participant, when 
     expressed as an annual addition to such participant's 
     account, shall be treated as not exceeding the limitation of 
     paragraph (1) if such annual addition is not in excess of 
     $10,000.
       ``(ii) $40,000 aggregate limitation.--The total amount of 
     additions with respect to any participant which may be taken 
     into account for purposes of this subparagraph for all years 
     may not exceed $40,000.
       ``(B) Number of years of service for duly ordained, 
     commissioned, or licensed ministers or lay employees.--For 
     purposes of this paragraph--
       ``(i) all years of service by--

       ``(I) a duly ordained, commissioned, or licensed minister 
     of a church, or
       ``(II) a lay person,

     as an employee of a church, a convention or association of 
     churches, including an organization described in section 
     414(e)(3)(B)(ii), shall be considered as years of service for 
     1 employer, and
       ``(ii) all amounts contributed for annuity contracts by 
     each such church (or convention or association of churches) 
     or such organization during such years for such minister or 
     lay person shall be considered to have been contributed by 1 
     employer.
       ``(C) Foreign missionaries.--In the case of any individual 
     described in subparagraph (D) performing services outside the 
     United States, contributions and other additions for an 
     annuity contract or retirement income account described in 
     section 403(b) with respect to such employee, when expressed 
     as an annual addition to such employee's account, shall not 
     be treated as exceeding the limitation of paragraph (1) if 
     such annual addition is not in excess of the greater of 
     $3,000 or the employee's includible compensation determined 
     under section 403(b)(3).
       ``(D) Annual addition.--For purposes of this paragraph, the 
     term `annual addition' has the meaning given such term by 
     paragraph (2).
       ``(E) Church, convention or association of churches.--For 
     purposes of this paragraph, the terms `church' and 
     `convention or association of churches' have the same meaning 
     as when used in section 414(e).''.
       (5) Section 457(e)(5) is amended to read as follows:
       ``(5) Includible compensation.--The term `includible 
     compensation' has the meaning given to the term 
     `participant's compensation' by section 415(c)(3).''.
       (6) Section 402(g)(7)(B) is amended by striking ``2001.'' 
     and inserting ``2001).''.
       (q) Amendments Relating to Section 643 of the Act.--
       (1) Section 401(a)(31)(C)(i) is amended by inserting ``is a 
     qualified trust which is part of a plan which is a defined 
     contribution plan and'' before ``agrees''.
       (2) Section 402(c)(2) is amended by adding at the end the 
     following flush sentence:

     ``In the case of a transfer described in subparagraph (A) or 
     (B), the amount transferred shall be treated as consisting 
     first of the portion of such distribution that is includible 
     in gross income (determined without regard to paragraph 
     (1)).''.
       (r) Amendments Relating to Section 648 of the Act.--
       (1) Section 417(e) is amended--
       (A) in paragraph (1) by striking ``exceed the dollar limit 
     under section 411(a)(11)(A)'' and inserting ``exceed the 
     amount that can be distributed without the participant's 
     consent under section 411(a)(11)'', and
       (B) in paragraph (2)(A) by striking ``exceeds the dollar 
     limit under section 411(a)(11)(A)'' and inserting ``exceeds 
     the amount that can be distributed without the participant's 
     consent under section 411(a)(11)''.
       (2) Section 205(g) of the Employee Retirement Income 
     Security Act of 1974 is amended--
       (A) in paragraph (1) by striking ``exceed the dollar limit 
     under section 203(e)(1)'' and inserting ``exceed the amount 
     that can be distributed without the participant's consent 
     under section 203(e)'', and
       (B) in paragraph (2)(A) by striking ``exceeds the dollar 
     limit under section 203(e)(1)'' and inserting ``exceeds the 
     amount that can be distributed without the participant's 
     consent under section 203(e)''.
       (s) Amendment Relating to Section 652 of the Act.--Section 
     404(a)(1)(D)(iv) is amended by striking ``Plans maintained by 
     professional service employers'' and inserting ``Special rule 
     for terminating plans''.
       (t) Amendments Relating to Section 657 of the Act.--Section 
     404(c)(3) of the Employee Retirement Income Security Act of 
     1974 is amended--
       (1) by striking ``the earlier of'' in subparagraph (A) the 
     second place it appears, and
       (2) by striking ``if the transfer'' and inserting ``a 
     transfer that''.
       (u) Amendments Relating to Section 659 of the Act.--
       (1) Section 4980F is amended--
       (A) in subsection (e)(1) by striking ``written notice'' and 
     inserting ``the notice described in paragraph (2)'',
       (B) by amending subsection (f)(2)(A) to read as follows:
       ``(A) any defined benefit plan described in section 401(a) 
     which includes a trust exempt from tax under section 501(a), 
     or'', and
       (C) in subsection (f)(3) by striking ``significantly'' both 
     places it appears.
       (2) Section 204(h)(9) of the Employee Retirement Income 
     Security Act of 1974 is amended by striking ``significantly'' 
     both places it appears.
       (3) Section 659(c)(3)(B) of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 is amended by striking 
     ``(or'' and inserting ``(and''.
       (v) Amendments Relating to Section 661 of the Act.--
       (1) Section 412(c)(9)(B) is amended--
       (A) in clause (ii) by striking ``125 percent'' and 
     inserting ``100 percent'', and
       (B) by adding at the end the following new clause:
       ``(iv) Limitation.--A change in funding method to use a 
     prior year valuation, as provided in clause (ii), may not be 
     made unless as of the valuation date within the prior plan 
     year, the value of the assets of the plan are not less than 
     125 percent of the plan's current liability (as defined in 
     paragraph (7)(B)).''.
       (2) Section 302(c)(9)(B) of the Employee Retirement Income 
     Security Act of 1974 is amended--
       (A) in clause (ii) by striking ``125 percent'' and 
     inserting ``100 percent'', and
       (B) by adding at the end the following new clause:
       ``(iv) A change in funding method to use a prior year 
     valuation, as provided in clause (ii), may not be made unless 
     as of the valuation date within the prior plan year, the 
     value of the assets of the plan are not less than 125 percent 
     of the plan's current liability (as defined in paragraph 
     (7)(B)).''.
       (w) Amendments Relating to Section 662 of the Act.--
       (1) Section 404(k) is amended--
       (A) in paragraph (1) by striking ``during the taxable 
     year'',
       (B) in paragraph (2)(B) by striking ``(A)(iii)'' and 
     inserting ``(A)(iv)'',
       (C) in paragraph (4)(B) by striking ``(iii)'' and inserting 
     ``(iv)'', and
       (D) by redesignating subparagraph (B) of paragraph (4) (as 
     amended by subparagraph (C)) as subparagraph (C) of paragraph 
     (4) and by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Reinvestment dividends.--For purposes of subparagraph 
     (A), an applicable dividend reinvested pursuant to clause 
     (iii)(II) of paragraph (2)(A) shall be treated as paid in the 
     taxable year of the corporation in which such dividend is 
     reinvested in qualifying employer securities or in which the 
     election

[[Page H488]]

     under clause (iii) of paragraph (2)(A) is made, whichever is 
     later.''.
       (2) Section 404(k) is amended by adding at the end the 
     following new paragraph:
       ``(7) Full vesting.--In accordance with section 411, an 
     applicable dividend described in clause (iii)(II) of 
     paragraph (2)(A) shall be subject to the requirements of 
     section 411(a)(1).''.
       (x) Effective Date.--Except as provided in subsection (c), 
     the amendments made by this section shall take effect as if 
     included in the provisions of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 to which they relate.

     SEC. 512. AMENDMENTS RELATED TO COMMUNITY RENEWAL TAX RELIEF 
                   ACT OF 2000.

       (a) Amendment Related to Section 101 of the Act.--Section 
     469(i)(3)(E) is amended by striking clauses (ii), (iii), and 
     (iv) and inserting the following:
       ``(ii) second to the portion of such loss to which 
     subparagraph (C) applies,
       ``(iii) third to the portion of the passive activity credit 
     to which subparagraph (B) or (D) does not apply,
       ``(iv) fourth to the portion of such credit to which 
     subparagraph (B) applies, and''.
       (b) Amendment Related to Section 306 of the Act.--Section 
     151(c)(6)(C) is amended--
       (1) by striking ``for earned income credit.--For purposes 
     of section 32, an'' and inserting ``for principal place of 
     abode requirements.--An'', and
       (2) by striking ``requirement of section 32(c)(3)(A)(ii)'' 
     and inserting ``principal place of abode requirements of 
     section 2(a)(1)(B), section 2(b)(1)(A), and section 
     32(c)(3)(A)(ii)''.
       (c) Amendment Related to Section 309 of the Act.--
     Subparagraph (A) of section 358(h)(1) is amended to read as 
     follows:
       ``(A) which is assumed by another person as part of the 
     exchange, and''.
       (d) Amendments Related to Section 401 of the Act.--
       (1)(A) Section 1234A is amended by inserting ``or'' after 
     the comma at the end of paragraph (1), by striking ``or'' at 
     the end of paragraph (2), and by striking paragraph (3).
       (B)(i) Section 1234B is amended in subsection (a)(1) and in 
     subsection (b) by striking ``sale or exchange'' the first 
     place it appears in each subsection and inserting ``sale, 
     exchange, or termination''.
       (ii) Section 1234B is amended by adding at the end the 
     following new subsection:
       ``(f) Cross Reference.--

  ``For special rules relating to dealer securities futures contracts, 
see section 1256.''
       (2) Section 1091(e) is amended--
       (A) in the heading, by striking ``Securities.--'' and 
     inserting ``Securities and Securities Futures Contracts To 
     Sell.--'',
       (B) by inserting after ``closing of a short sale of'' the 
     following: ``(or a securities futures contract to sell)'',
       (C) in paragraph (2), by inserting after ``short sale of'' 
     the following: ``(or securities futures contracts to sell)'', 
     and
       (D) by adding at the end the following:

     ``For purposes of this subsection, the term `securities 
     futures contract' has the meaning provided by section 
     1234B(c).''.
       (3) Section 1233(e)(2) is amended by striking ``and'' at 
     the end of subparagraph (C), by striking the period and 
     inserting ``; and'' at the end of subparagraph (D), and by 
     adding at the end the following:
       ``(E) entering into a securities futures contract (as so 
     defined) to sell shall be treated as entering into a short 
     sale, and the sale, exchange, or termination of a securities 
     futures contract to sell shall be treated as the closing of a 
     short sale.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Community Renewal Tax Relief Act of 2000 to which they 
     relate.

     SEC. 513. AMENDMENTS RELATED TO THE TAX RELIEF EXTENSION ACT 
                   OF 1999.

       (a) Amendments Related to Section 545 of the Act.--Section 
     857(b)(7) is amended--
       (1) in clause (i) of subparagraph (B), by striking ``the 
     amount of which'' and inserting ``to the extent the amount of 
     the rents'', and
       (2) in subparagraph (C), by striking ``if the amount'' and 
     inserting ``to the extent the amount''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 545 of the Tax 
     Relief Extension Act of 1999.

     SEC. 514. AMENDMENTS RELATED TO THE TAXPAYER RELIEF ACT OF 
                   1997.

       (a) Amendments Related to Section 311 of the Act.--Section 
     311(e) of the Taxpayer Relief Act of 1997 (Public Law 105-34; 
     111 Stat. 836) is amended--
       (1) in paragraph (2)(A), by striking ``recognized'' and 
     inserting ``included in gross income'', and
       (2) by adding at the end the following new paragraph:
       ``(5) Disposition of interest in passive activity.--Section 
     469(g)(1)(A) of the Internal Revenue Code of 1986 shall not 
     apply by reason of an election made under paragraph (1).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 311 of the 
     Taxpayer Relief Act of 1997.

     SEC. 515. AMENDMENT RELATED TO THE BALANCED BUDGET ACT OF 
                   1997.

       (a) Amendment Related to Section 4006 of the Act.--Section 
     26(b)(2) is amended by striking ``and'' at the end of 
     subparagraph (P), by striking the period and inserting ``, 
     and'' at the end of subparagraph (Q), and by adding at the 
     end the following new subparagraph:
       ``(R) section 138(c)(2) (relating to penalty for 
     distributions from Medicare+Choice MSA not used for qualified 
     medical expenses if minimum balance not maintained).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 4006 of the 
     Balanced Budget Act of 1997.

     SEC. 516. OTHER TECHNICAL CORRECTIONS.

       (a) Coordination of Advanced Payments of Earned Income 
     Credit.--
       (1) Section 32(g)(2) is amended by striking ``subpart'' and 
     inserting ``part''.
       (2) The amendment made by this subsection shall take effect 
     as if included in section 474 of the Tax Reform Act of 1984.
       (b) Disclosure by Social Security Administration to Federal 
     Child Support Agencies.--
       (1) Section 6103(l)(8) is amended--
       (A) in the heading, by striking ``state and local'' and 
     inserting ``federal, state, and local'', and
       (B) in subparagraph (A), by inserting ``Federal or'' before 
     ``State or local''.
       (2) The amendments made by this subsection shall take 
     effect on the date of the enactment of this Act.
       (c) Treatment of Settlements Under Partnership Audit 
     Rules.--
       (1) The following provisions are each amended by inserting 
     ``or the Attorney General (or his delegate)'' after 
     ``Secretary'' each place it appears:
       (A) Paragraphs (1) and (2) of section 6224(c).
       (B) Section 6229(f)(2).
       (C) Section 6231(b)(1)(C).
       (D) Section 6234(g)(4)(A).
       (2) The amendments made by this subsection shall apply with 
     respect to settlement agreements entered into after the date 
     of the enactment of this Act.
       (d) Amendment Related to Procedure and Administration.--
       (1) Section 6331(k)(3) (relating to no levy while certain 
     offers pending or installment agreement pending or in effect) 
     is amended to read as follows:
       ``(3) Certain rules to apply.--Rules similar to the rules 
     of--
       ``(A) paragraphs (3) and (4) of subsection (i), and
       ``(B) except in the case of paragraph (2)(C), paragraph (5) 
     of subsection (i),

     shall apply for purposes of this subsection.''.
       (2) The amendment made by this subsection shall take effect 
     on the date of the enactment of this Act.
       (e) Modified Endowment Contracts.--Paragraph (2) of section 
     318(a) of the Community Renewal Tax Relief Act of 2000 (114 
     Stat. 2763A-645) is repealed, and clause (ii) of section 
     7702A(c)(3)(A) shall read and be applied as if the amendment 
     made by such paragraph had not been enacted.

     SEC. 517. CLERICAL AMENDMENTS.

       (1) The subsection (g) of section 25B that relates to 
     termination is redesignated as subsection (h).
       (2) Section 51A(c)(1) is amended by striking ``51(d)(10)'' 
     and inserting ``51(d)(11)''.
       (3) Section 172(b)(1)(F)(i) is amended--
       (A) by striking ``3 years'' and inserting ``3 taxable 
     years'', and
       (B) by striking ``2 years'' and inserting ``2 taxable 
     years''.
       (4) Section 351(h)(1) is amended by inserting a comma after 
     ``liability''.
       (5) Section 741 is amended by striking ``which have 
     appreciated substantially in value''.
       (6) Section 857(b)(7)(B)(i) is amended by striking 
     ``subsection 856(d)'' and inserting ``section 856(d)''.
       (7) Section 1394(c)(2) is amended by striking 
     ``subparagraph (A)'' and inserting ``paragraph (1)''.
       (8)(A) Section 6227(d) is amended by striking ``subsection 
     (b)'' and inserting ``subsection (c)''.
       (B) Section 6228 is amended--
       (i) in subsection (a)(1), by striking ``subsection (b) of 
     section 6227'' and inserting ``subsection (c) of section 
     6227'',
       (ii) in subsection (a)(3)(A), by striking ``subsection (b) 
     of'', and
       (iii) in subsections (b)(1) and (b)(2)(A), by striking 
     ``subsection (c) of section 6227'' and inserting ``subsection 
     (d) of section 6227''.
       (C) Section 6231(b)(2)(B)(i) is amended by striking 
     ``section 6227(c)'' and inserting ``section 6227(d)''.
       (9) Section 1221(b)(1)(B)(i) is amended by striking 
     ``1256(b))'' and inserting ``1256(b)))''.
       (10) Section 618(b)(2) of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 (Public Law 107-16; 115 
     Stat. 108) is amended--
       (A) in subparagraph (A) by striking ``203(d)'' and 
     inserting ``202(f)'', and
       (B) in subparagraphs (C), (D), and (E) by striking ``203'' 
     and inserting ``202(f)''.
       (11)(A) Section 525 of the Ticket to Work and Work 
     Incentives Improvement Act of 1999 (Public Law 106-170; 113 
     Stat. 1928) is amended by striking ``7200'' and inserting 
     ``7201''.
       (B) Section 532(c)(2) of such Act (113 Stat. 1930) is 
     amended--
       (i) in subparagraph (D), by striking ``341(d)(3)'' and 
     inserting ``341(d)'', and
       (ii) in subparagraph (Q), by striking ``954(c)(1)(B)(iii) 
     and inserting ``954(c)(1)(B)''.

     SEC. 518. ADDITIONAL CORRECTIONS.

       (a) Amendments Related to Section 202 of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001.--

[[Page H489]]

       (1) Subsection (h) of section 23 is amended--
       (A) by striking ``subsection (a)(1)(B)'' and inserting 
     ``subsection (a)(3)'', and
       (B) by adding at the end the following new flush sentence:

     ``If any amount as increased under the preceding sentence is 
     not a multiple of $10, such amount shall be rounded to the 
     nearest multiple of $10.''
       (2) Subsection (f) of section 137 is amended by adding at 
     the end the following new flush sentence:

     ``If any amount as increased under the preceding sentence is 
     not a multiple of $10, such amount shall be rounded to the 
     nearest multiple of $10.''
       (b) Amendments Related to Section 204 of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001.--Section 
     21(d)(2) is amended--
       (1) in subparagraph (A) by striking ``$200'' and inserting 
     ``$250'', and
       (2) in subparagraph (B) by striking ``$400'' and inserting 
     ``$500''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 to 
     which they relate.

                   TITLE VI--UNEMPLOYMENT ASSISTANCE

     SEC. 601. SHORT TITLE.

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

     SEC. 602. 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 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 603 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. 603. 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) 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.
       (c) Special Rule.--
       (1) In general.--Notwithstanding any other provision of 
     this section, if, at the time that the individual's account 
     is exhausted, such individual's State is in an extended 
     benefit period (as determined under paragraph (2)), then, 
     such account shall be augmented by an amount equal to the 
     amount originally established in such account (as determined 
     under subsection (b)(1)).
       (2) Extended benefit period.--For purposes of paragraph 
     (1), a State shall be considered to be in an extended benefit 
     period if, at the time of exhaustion (as described in 
     paragraph (1))--
       (A) such a period is then in effect for such State under 
     the Federal-State Extended Unemployment Compensation Act of 
     1970; or
       (B) such a period would then be in effect for such State 
     under such Act if section 203(d) of such Act were applied as 
     if it had been amended by striking ``5'' each place it 
     appears and inserting ``4''.

     SEC. 604. 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. 605. 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

[[Page H490]]

     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. 606. 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. 607. DEFINITIONS.

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

     SEC. 608. 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. 609. 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)(A) 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--
       ``(i) 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 609(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
       ``(ii) the amount which was in fact transferred under this 
     section to such account at the beginning of fiscal year 2002.
       ``(B) Notwithstanding the provisions of subparagraph (A)--
       ``(i) the aggregate amount transferred to the States under 
     this subsection may not exceed a total of $8,000,000,000; and
       ``(ii) all amounts determined under subparagraph (A) shall 
     be reduced ratably, if and to the extent necessary in order 
     to comply with the limitation under clause (i).
       ``(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 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.

[[Page H491]]

          TITLE VII--DISPLACED WORKER HEALTH INSURANCE CREDIT

     SEC. 701. DISPLACED WORKER HEALTH INSURANCE CREDIT.

       (a) In General.--Subchapter B of chapter 65 is amended by 
     inserting after section 6428 the following new section:

     ``SEC. 6429. DISPLACED WORKER HEALTH INSURANCE CREDIT.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by 
     subtitle A an amount equal to 60 percent of the amount paid 
     during the taxable year for coverage for the taxpayer, the 
     taxpayer's spouse, and dependents of the taxpayer under 
     qualified health insurance during eligible coverage months.
       ``(b) Only 12 Eligible Coverage Months.--The number of 
     eligible coverage months taken into account under subsection 
     (a) for all taxable years shall not exceed 12.
       ``(c) Eligible Coverage Month.--For purposes of this 
     section--
       ``(1) In general.--The term `eligible coverage month' means 
     any month during 2002 or 2003 if, as of the first day of such 
     month--
       ``(A) the taxpayer is unemployed,
       ``(B) the taxpayer is covered by qualified health 
     insurance,
       ``(C) the premium for coverage under such insurance for 
     such month is paid by the taxpayer, and
       ``(D) the taxpayer does not have other specified coverage.
       ``(2) Special rules.--
       ``(A) Treatment of first month of employment.--The taxpayer 
     shall be treated as meeting the requirement of paragraph 
     (1)(A) for the first month beginning on or after the date 
     that the taxpayer ceases to be unemployed by reason of 
     beginning work for an employer.
       ``(B) Initial claim must be after march 15, 2001.--The 
     taxpayer shall not be treated as meeting the requirement of 
     paragraph (1)(A) with respect to any unemployment if the 
     initial claim for regular compensation for such unemployment 
     is filed on or before March 15, 2001.
       ``(C) Joint returns.--In the case of a joint return, the 
     requirements of paragraph (1) shall be treated as met if at 
     least 1 spouse satisfies such requirements.
       ``(3) Other specified coverage.--For purposes of this 
     subsection, an individual has other specified coverage for 
     any month if, as of the first day of such month--
       ``(A) Subsidized coverage.--
       ``(i) In general.--Such individual is covered under any 
     qualified health insurance under which at least 50 percent of 
     the cost of coverage (determined under section 4980B) is paid 
     or incurred by an employer (or former employer) of the 
     taxpayer or the taxpayer's spouse.
       ``(ii) Treatment of cafeteria plans and flexible spending 
     accounts.--For purposes of clause (i), the cost of benefits--

       ``(I) which are chosen under a cafeteria plan (as defined 
     in section 125(d)), or provided under a flexible spending or 
     similar arrangement, of such an employer, and
       ``(II) which are not includible in gross income under 
     section 106,

     shall be treated as borne by such employer.
       ``(B) Coverage under medicare, medicaid, or schip.--Such 
     individual--
       ``(i) is entitled to benefits under part A of title XVIII 
     of the Social Security Act or is enrolled under part B of 
     such title, or
       ``(ii) is enrolled in the program under title XIX or XXI of 
     such Act.
       ``(C) Certain other coverage.--Such individual--
       ``(i) is enrolled in a health benefits plan under chapter 
     89 of title 5, United States Code, or
       ``(ii) is entitled to receive benefits under chapter 55 of 
     title 10, United States Code.
       ``(4) Determination of unemployment.--For purposes of 
     paragraph (1), an individual shall be treated as unemployed 
     during any period--
       ``(A) for which such individual is receiving unemployment 
     compensation (as defined in section 85(b)), or
       ``(B) for which such individual is certified by a State 
     agency (or by any other entity designated by the Secretary) 
     as otherwise being entitled to receive unemployment 
     compensation (as so defined) but for--
       ``(i) the termination of the period during which such 
     compensation was payable, or
       ``(ii) an exhaustion of such individual's rights to such 
     compensation.
       ``(d) Qualified Health Insurance.--For purposes of this 
     section, the term `qualified health insurance' means 
     insurance which constitutes medical care; except that such 
     term shall not include any insurance if substantially all of 
     its coverage is of excepted benefits described in section 
     9832(c).
       ``(e) Coordination With Advance Payments of Credit.--
       ``(1) Recapture of excess advance payments.--If any payment 
     is made by the Secretary under section 7527 during any 
     calendar year to a provider of qualified health insurance for 
     an individual, then the tax imposed by this chapter for the 
     individual's last taxable year beginning in such calendar 
     year shall be increased by the aggregate amount of such 
     payments.
       ``(2) Reconciliation of payments advanced and credit 
     allowed.--Any increase in tax under paragraph (1) shall not 
     be treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit (other than the credit 
     allowed by subsection (a)) allowable under part IV of 
     subchapter A of chapter 1.
       ``(f) Special Rules.--
       ``(1) Coordination with other deductions.--Amounts taken 
     into account under subsection (a) shall not be taken into 
     account in determining any deduction allowed under section 
     162(l) or 213.
       ``(2) MSA distributions.--Amounts distributed from an 
     Archer MSA (as defined in section 220(d)) shall not be taken 
     into account under subsection (a).
       ``(3) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(4) Credit treated as refundable credit.--For purposes of 
     this title, the credit allowed under this section shall be 
     treated as a credit allowable under subpart C of part IV of 
     subchapter A of chapter 1.
       ``(5) Regulations.--The Secretary may prescribe such 
     regulations and other guidance as may be necessary or 
     appropriate to carry out this section and section 7527.''.
       (b) Increased Access to Health Insurance for Individuals 
     Eligible for Tax Credit Through Use of Guaranteed Issue, 
     Qualified High Risk Pools, and Other Appropriate State 
     Mechanisms.--
       (1) In general.--Notwithstanding any other provision of 
     law, in applying section 2741 of the Public Health Service 
     Act (42 U.S.C. 300gg-41)) and any alternative State mechanism 
     under section 2744 of such Act (42 U.S.C.300gg-44)), in 
     determining who is an eligible individual (as defined in 
     section 2741(b) of such Act) in the case of an individual who 
     may be covered by insurance for which credit is allowable 
     under section 6429 of the Internal Revenue Code of 1986 for 
     an eligible coverage month, if the individual seeks to obtain 
     health insurance coverage under such section during an 
     eligible coverage month under such section--
       (A) paragraph (1) of such section 2741(b) shall be applied 
     as if any reference to 18 months is deemed a reference to 12 
     months, and
       (B) paragraphs (4) and (5) of such section 2741(b) shall 
     not apply.
       (2) Promotion of state high risk pools.--Title XXVII of the 
     Public Health Service Act is amended by inserting after 
     section 2744 the following new section:

     ``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.

       ``(a) Seed Grants to States.--The Secretary shall provide 
     from the funds appropriated under subsection (c)(1) a grant 
     of up to $1,000,000 to each State that has not created a 
     qualified high risk pool as of the date of the enactment of 
     this section for the State's costs of creation and initial 
     operation of such a pool.
       ``(b) Matching Funds for Operation of Pools.--
       ``(1) In general.--In the case of a State that has 
     established a qualified high risk pool that restricts 
     premiums charged under the pool to no more than 150 percent 
     of the premium for applicable standard risk rates and that 
     offers a choice of two or more coverage options through the 
     pool, from the funds appropriated under subsection (c)(2) and 
     allotted to the State under paragraph (2), the Secretary 
     shall provide a grant of up to 50 percent of the losses 
     incurred by the State in connection with the operation of the 
     pool.
       ``(2) Allotment.--The amounts appropriated under subsection 
     (c)(2) for a fiscal year shall be made available to the 
     States in accordance with a formula that is based upon the 
     number of uninsured individuals in the States.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed as preventing a State from supplementing the funds 
     made available under this subsection for the support and 
     operation of qualified high risk pools.
       ``(c) Funding.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated--
       ``(1) $20,000,000 for fiscal year 2002 to carry out 
     subsection (a); and
       ``(2) $40,000,000 for each of fiscal years 2002 and 2003.

     Funds appropriated under this subsection for a fiscal year 
     shall remain available for obligation through the end of the 
     following fiscal year. Nothing in this section shall be 
     construed as providing a State with an entitlement to a grant 
     under this section.
       ``(d) Qualified High Risk Pool and State Defined.--For 
     purposes of this section, the term `qualified high risk pool' 
     has the meaning given such term in section 2744(c)(2) and the 
     term `State' means any of the 50 States and the District of 
     Columbia.''.
       (3) Construction.--Nothing in this subsection shall be 
     construed as affecting the ability of a State to use 
     mechanisms, described in sections 2741(c) and 2744 of the 
     Public Health Service Act, as an alternative to applying the 
     guaranteed availability provisions of section 2741(a) of such 
     Act.
       (c) 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 new section:

     ``SEC. 6050T. RETURNS RELATING TO DISPLACED WORKER HEALTH 
                   INSURANCE CREDIT.

       ``(a) Requirement of Reporting.--Every person--
       ``(1) who, in connection with a trade or business conducted 
     by such person, receives

[[Page H492]]

     payments during any calendar year from any individual for 
     coverage of such individual or any other individual under 
     qualified health insurance (as defined in section 6429(d)), 
     and
       ``(2) who claims a reimbursement for an advance credit 
     amount,

     shall, at such time as the Secretary may prescribe, make the 
     return described in subsection (b) with respect to each 
     individual from whom such payments were received or for whom 
     such a reimbursement is claimed.
       ``(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 each individual 
     referred to in subsection (a),
       ``(B) the aggregate of the advance credit amounts provided 
     to such individual and for which reimbursement is claimed,
       ``(C) the number of months for which such advance credit 
     amounts are so provided, and
       ``(D) such other information as the Secretary may 
     prescribe.
       ``(c) 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 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, and
       ``(2) the information required to be shown on the return 
     with respect to such individual.

     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.
       ``(d) Advance Credit Amount.--For purposes of this section, 
     the term `advance credit amount' means an amount for which 
     the person can claim a reimbursement pursuant to a program 
     established by the Secretary under section 7527.''
       (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 new clause:
       ``(xi) section 6050T (relating to returns relating to 
     displaced worker health insurance credit),''.
       (B) Paragraph (2) of section 6724(d) is amended by striking 
     ``or'' at the end of subparagraph (Z), by striking the period 
     at the end of subparagraph (AA) and inserting ``, or'', and 
     by adding after subparagraph (AA) the following new 
     subparagraph:
       ``(BB) section 6050T (relating to returns relating to 
     displaced worker health insurance credit).''
       (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 new item:

``Sec. 6050T. Returns relating to displaced worker health insurance 
              credit.''

       (d) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 6429 of such Code''.
       (2) The table of sections for subchapter B of chapter 65 is 
     amended by adding at the end the following new item:

``Sec. 6429. Displaced worker health insurance credit.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 702. ADVANCE PAYMENT OF DISPLACED WORKER HEALTH 
                   INSURANCE CREDIT.

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

     ``SEC. 7527. ADVANCE PAYMENT OF DISPLACED WORKER HEALTH 
                   INSURANCE CREDIT.

       ``(a) General Rule.--The Secretary shall establish a 
     program for making payments on behalf of eligible individuals 
     to providers of health insurance for such individuals.
       ``(b) Eligible Individual.--For purposes of this section, 
     the term `eligible individual' means any individual for whom 
     a qualified health insurance credit eligibility certificate 
     is in effect.
       ``(c) Qualified Health Insurance Credit Eligibility 
     Certificate.--For purposes of this section, a qualified 
     health insurance credit eligibility certificate is a 
     statement certified by a State agency (or by any other entity 
     designated by the Secretary) which--
       ``(1) certifies that the individual was unemployed (within 
     the meaning of section 6429) as of the first day of any 
     month, and
       ``(2) provides such other information as the Secretary may 
     require for purposes of this section.''
       (b) Clerical Amendment.--The table of sections for chapter 
     77 is amended by adding at the end the following new item:

``Sec. 7527. Advance payment of displaced worker health insurance 
              credit.''

       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

  TITLE VIII--EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY HEALTH 
                        CARE COVERAGE ASSISTANCE

     SEC. 801. EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY 
                   HEALTH CARE COVERAGE ASSISTANCE.

       (a) In General.--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'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(4) to the Governor of any State or outlying area who 
     applies for assistance under subsection (f) to provide 
     employment and training assistance and temporary health care 
     coverage assistance to workers affected by major economic 
     dislocations, such as plant closures, mass layoffs, or 
     multiple layoffs, including those dislocations caused by the 
     terrorist attacks of September 11, 2001.''.
       (b) Requirements.--Section 173 of the Workforce Investment 
     Act of 1998 (29 U.S.C. 2918) is amended by adding at the end 
     the following:
       ``(f) Additional Relief for Major Economic Dislocations.--
       ``(1) Grant recipient eligibility.--
       ``(A) In general.--To be eligible to receive a grant under 
     subsection (a)(4), a Governor shall submit an application, 
     for assistance described in subparagraph (B), to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(B) Types of assistance.--
       ``(i) In general.--Assistance described in this 
     subparagraph is--

       ``(I) employment and training assistance, including 
     employment and training activities described in section 134; 
     and
       ``(II) temporary health care coverage assistance described 
     in paragraph (4).

       ``(ii) Minimum allocation to temporary health care coverage 
     assistance.--Not less than 30 percent of the cost of 
     assistance requested in any application submitted under this 
     subsection shall consist of the cost for temporary health 
     care coverage assistance described in paragraph (4).
       ``(iii) Encouragement of certain types of health care 
     coverage.--In publishing requirements for applications under 
     this subsection, the Secretary shall encourage the use of 
     private health coverage alternatives.
       ``(C) Minimum award requirement for eligible states and 
     outlying areas.--
       ``(i) Requirements.--In any case in which the requirements 
     of this section are met in connection with one or more 
     applications of the Governor of any State or outlying area 
     for assistance described in subparagraph (B), the Governor--

       ``(I) shall be awarded at least 1 grant under subsection 
     (a)(4) pursuant to such applications, and
       ``(II) except as provided in clause (ii), shall be awarded 
     not less than $5,000,000 in total grants awarded under 
     (a)(4).

       ``(ii) Exception to minimum grant requirements.--The 
     Secretary may award to a Governor a total amount less than 
     the minimum total amount specified in clause (i)(II), as 
     appropriate, if the Governor--

       ``(I) requests less than such minimum total amount, or
       ``(II) fails to demonstrate to the Secretary that there are 
     a sufficient number of eligible recipients to justify the 
     awarding of grants in such minimum total amount.

       ``(2) State administration.--The Governor may designate one 
     or more local workforce investment boards or other entities 
     with the capability to respond to the circumstances relating 
     to the particular closure, layoff, or other dislocation to 
     administer the grant under subsection (a)(4).
       ``(3) Participant eligibility.--An individual shall be 
     eligible to receive assistance described in paragraph (1)(B) 
     under a grant awarded under subsection (a)(4) if such 
     individual is a dislocated worker and the Governor has 
     certified that a major economic dislocation, such as a plant 
     closure, mass layoff, or multiple layoff, including a 
     dislocation caused by the terrorist attacks of September 11, 
     2001, contributed importantly to the dislocation.
       ``(4) Temporary health care coverage assistance.--
       ``(A) In general.--Temporary health care coverage 
     assistance described in this paragraph consists of health 
     care coverage premium assistance provided to qualified 
     individuals under this paragraph with respect to premiums for 
     coverage for themselves, for their spouses, for their 
     dependents, or for any combination thereof, other than 
     premiums for excluded health insurance coverage.
       ``(B) Qualified individuals.--For purposes of this 
     paragraph--
       ``(i) In general.--Subject to clause (ii), a qualified 
     individual is an individual who--

       ``(I) is a dislocated worker referred to in paragraph (3) 
     with respect to whom the Governor has made the certification 
     regarding the dislocation as required under such paragraph, 
     and
       ``(II) is receiving or has received employment and training 
     assistance as described in paragraph (1)(B)(i)(I).

       ``(ii) Limitation.--An individual shall not be treated as a 
     qualified individual if--

       ``(I) such individual is eligible for coverage under the 
     program under title XIX of the Social Security Act applicable 
     in the State or outlying area, or

[[Page H493]]

       ``(II) such individual is eligible for coverage under the 
     program under title XXI of such Act applicable in the State 
     or outlying area,

     unless such eligibility is effective solely in connection 
     with eligibility for health care coverage premium assistance 
     under a program established by the Governor in connection 
     with temporary health care coverage assistance received under 
     this subsection.
       ``(iii) Construction.--

       ``(I) Permitting coverage through enrollment in medicaid or 
     schip.--Nothing in this subsection shall be construed as 
     preventing a State from using funds made available by reason 
     of subsection (a)(4) to provide health care coverage through 
     enrollment in the program under title XIX (relating to 
     medicaid) or in the program under title XXI (relating to 
     SCHIP) of the Social Security Act, but only in the case of 
     individuals who are not otherwise eligible for coverage under 
     either such program.
       ``(II) Not affecting eligibility for assistance.--An 
     individual shall not be treated for purposes of this 
     subsection as being eligible for coverage under either such 
     program (and thereby not eligible for assistance under this 
     subsection) merely on the basis that the State provides 
     assistance under this subsection through coverage under 
     either such program.

       ``(C) Limitation on entitlement.--Nothing in this 
     subsection shall be construed as establishing any entitlement 
     of qualified individuals to premium assistance under this 
     subsection.
       ``(D) Concurrence and consultation.--In connection with any 
     temporary health care coverage assistance provided pursuant 
     to this paragraph--
       ``(i) if the Secretary determines that health care coverage 
     premium assistance provided through title XIX or XXI of the 
     Social Security Act is a substantial component of the 
     assistance provided, the Secretary shall act in concurrence 
     with the Secretary of Health and Human Services, and
       ``(ii) in any other case, the Secretary shall consult with 
     the Secretary of Health and Human Services to the extent that 
     such assistance affects programs administered by or under the 
     Secretary of Health and Human Services.
       ``(E) Use of funds.--Temporary health care coverage 
     assistance provided pursuant to this subsection shall 
     supplement and may not supplant any other State or local 
     funds used to provide health care coverage and may not be 
     included in determining the amount of non-Federal 
     contributions required under any program.
       ``(F) Definitions.--For purposes of this paragraph--
       ``(i) Excluded health care coverage.--The term `excluded 
     health care coverage' means coverage under--

       ``(I) title XVIII of the Social Security Act,
       ``(II) chapter 55 of title 10, United States Code,
       ``(III) chapter 17 of title 38, United States Code,
       ``(IV) chapter 89 of title 5, United States Code (other 
     than coverage which is comparable to continuation coverage 
     under section 4980B of the Internal Revenue Code of 1986), or
       ``(V) the Indian Health Care Improvement Act.

     Such term also includes coverage under a qualified long-term 
     care insurance contract and excepted benefits described in 
     section 733(c) of the Employee Retirement Income Security Act 
     of 1974.
       ``(ii) Premium.--The term `premium' means, in connection 
     with health care coverage, the premium which would (but for 
     this section) be charged for the cost of coverage.
       ``(5) Appropriations.--
       ``(A) In general.--There is hereby appropriated, from any 
     amounts in the Treasury not otherwise appropriated, 
     $3,900,000,000 for the period consisting of fiscal years 
     2002, 2003, and 2004 for the award of grants under subsection 
     (a)(4) in accordance with this section.
       ``(B) Availability.--Amounts appropriated pursuant to 
     subparagraph (A) for each fiscal year--
       ``(i) are in addition to amounts made available under 
     section 132(a)(2)(A) or any other provision of law to carry 
     out this section; and
       ``(ii) notwithstanding section 189(g)(1), shall remain 
     available for obligation by the Secretary from the date of 
     the enactment of this subsection through each succeeding 
     fiscal year, except that, notwithstanding section 189(g)(2), 
     no funds are hereby available for expenditure after June 30, 
     2004.''.

            TITLE IX--TEMPORARY STATE HEALTH CARE ASSISTANCE

     SEC. 901. TEMPORARY STATE HEALTH CARE ASSISTANCE.

       (a) In General.--Title XXI of the Social Security Act is 
     amended by adding at the end the following new section:

     ``SEC. 2111. TEMPORARY STATE HEALTH CARE ASSISTANCE.

       ``(a) In General.--For the purpose of providing allotments 
     to States under this section, there are hereby appropriated, 
     out of any funds in the Treasury not otherwise appropriated, 
     $4,599,667,448. Such funds shall be available for expenditure 
     by the State through the end of 2002. This section 
     constitutes budget authority in advance of appropriations 
     Acts and represents the obligation of the Federal Government 
     to provide for the payment to States of amounts provided 
     under this section.
       ``(b) Allotment.--Funds appropriated under subsection (a) 
     shall be allotted by the Secretary among the States in 
     accordance with the following table:


------------------------------------------------------------------------
               ``State                       Allotment (in dollars)
------------------------------------------------------------------------
 Alabama                                50,746,770
 Alaska                                 31,934,026
 Arizona                                68,594,677
 Arkansas                               38,203,601
 California                            482,591,746
 Colorado                               37,469,775
 Connecticut                            60,039,005
 Delaware                               10,355,807
 District of Columbia                   18,321,834
 Florida                               164,619,369
 Georgia                               118,754,564
 Hawaii                                 12,827,163
 Idaho                                  13,031,700
 Illinois                              175,505,956
 Indiana                                66,067,368
 Iowa                                   31,521,201
 Kansas                                 27,288,967
 Kentucky                               82,759,133
 Louisiana                              83,907,301
 Maine                                  22,650,838
 Maryland                               60,347,066
 Massachusetts                         121,971,140
 Michigan                              156,479,213
 Minnesota                             113,966,453
 Mississippi                            55,335,225
 Missouri                               74,675,436
 Montana                                10,224,652
 Nebraska                               31,582,786
 Nevada                                 14,695,973
 New Hampshire                          15,482,962
 New Jersey                            115,880,093
 New Mexico                             39,204,714
 New York                              573,999,663
 North Carolina                        189,333,723
 North Dakota                            8,915,675
 Ohio                                  166,006,936
 Oklahoma                               48,914,626
 Oregon                                 71,160,353
 Pennsylvania                          227,183,255
 Rhode Island                           45,001,680
 South Carolina                         94,789,740
 South Dakota                           19,951,788
 Tennessee                             102,845,128
 Texas                                 289,526,532
 Utah                                   30,860,915
 Vermont                                10,291,090
 Virginia                               67,232,217
 Washington                            110,377,264
 West Virginia                          31,120,804
 Wisconsin                              93,089,086
 Wyoming                                12,030,459
------------------------------------------------------------------------

       ``(c) Use of Funds.--
       ``(1) In general.--Funds appropriated under this section 
     may be used by a State only to provide health care items and 
     services (other than types of items and services for which 
     Federal financial participation is prohibited under this 
     title or title XIX).
       ``(2) Limitation.--Funds so appropriated may not be used to 
     match other Federal expenditures or in any other manner that 
     results in the expenditure of Federal funds in excess of the 
     amounts provided under this section.
       ``(d) Payment to States.--Funds made available under this 
     section shall be paid to the States in a form and manner and 
     time specified by the Secretary, based upon the submission of 
     such information as the Secretary may require. There is no 
     requirement for the expenditure of any State funds in order 
     to qualify for receipt of funds under this section. The 
     previous sections of this title shall not apply with respect 
     to funds provided under this section.
       ``(e) Definition.--For purposes of this section, the term 
     `State' means the 50 States and the District of Columbia.''.
       (b) Repeal.--Effective as of January 1, 2003, section 2111 
     of the Social Security Act, as inserted by subsection (a), is 
     repealed.

   TITLE X--SOCIAL SECURITY HELD HARMLESS; BUDGETARY TREATMENT OF ACT

     SEC. 1001. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.

       (a) In General.--Nothing in this Act (or an amendment made 
     by this Act) shall be construed to alter or amend title II of 
     the Social Security Act (or any regulation promulgated under 
     that Act).
       (b) Transfers.--
       (1) Estimate of secretary.--The Secretary of the Treasury 
     shall annually estimate the impact that the enactment of this 
     Act has on the income and balances of the trust funds 
     established under section 201 of the Social Security Act (42 
     U.S.C. 401).
       (2) Transfer of funds.--If, under paragraph (1), the 
     Secretary of the Treasury estimates that the enactment of 
     this Act has a negative impact on the income and balances of 
     the trust funds established under section 201 of the Social 
     Security Act (42 U.S.C. 401), the Secretary shall transfer, 
     not less frequently than quarterly, from the general revenues 
     of the Federal Government an amount sufficient so as to 
     ensure that the income and balances of such trust funds are 
     not reduced as a result of the enactment of this Act.

     SEC. 1002. 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.

[[Page H494]]

       (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.
       In lieu of the matter proposed to be inserted by the 
     amendment of the Senate to the title of the bill, insert the 
     following:

     To provide tax incentives for economic recovery and 
     assistance to displaced workers.
  The SPEAKER pro tempore. Pursuant to House Resolution 347, the 
gentleman from California (Mr. Thomas) and the gentleman from 
California (Mr. Matsui) each will control 30 minutes.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  It was not too long ago that we all gathered on the floor of the 
House and listened to President Bush on his State of the Union message. 
It was a remarkable speech because it was interrupted by a number of 
standing applauses for the statements that the President made.
  One of those that I listened carefully to was one that elicited a 
significant amount of response. It was when he talked about his 
economic recovery program. He said, ``I can explain it in one word: 
jobs.'' When we talk about economic recovery, we have got to talk about 
the job-creating machines in this country called business.
  What we have in front of us today, Mr. Speaker, is an economic 
security and worker assistance act. Because frankly, during this 
recession, with the complications added by September 11, the fact is 
that we do not have enough jobs and we have people without jobs.
  We are going to hear a discussion on the floor today about the fact 
that we should simply allow the Senate to do our thinking for us; that 
whatever is the common denominator that can get out of the Senate 
should be what it is that we accept over here in the House.
  I think one of the things that we have to focus on is the fact that 
the President indicated, given his program, there will be a year or two 
in which the budget is not in balance; but in following his program, we 
will return to surpluses. There is a fairly easy explanation for those 
who do not get it. It goes something like this: if people do not have 
jobs, they do not pay much in taxes. The government gets its revenue 
from taxes, and then we get less in than we anticipated. We went from a 
surplus; we are moving to a deficit. If we have a program which creates 
jobs, people then are paying taxes, the government's revenue goes up, 
and we move from a deficit to a surplus. And what we have in front of 
us is a program to create more jobs.
  It helps those who are in need. It assists in consumer demand; $13.7 
billion, as the President has outlined available for those individuals 
at the lower end of the economic spectrum. No one believes that they 
will not consume that money provided to them. That alone provides a 
modest economic stimulus.
  We talked about a very popular provision which is included in this 
package encouraging businesses to buy equipment now and not tomorrow. 
It is called the 30 percent expensing, and it encourages decisions that 
may be made later to be made today, so that the economic effect occurs 
now and not later. That is a pretty good definition of a stimulus.
  But it does more than that. When workers are unemployed, oftentimes 
they lose their health insurance benefits. This package addresses those 
who are unemployed by saying, we want to end the political football of 
unemployment insurance between the House and the Senate. If this 
becomes law, the tug of war is over, because we have provided the 
innovative structure which says the President's new trigger for 
assistance, not the statutory 5 percent unemployment rate in States, 
but the President's suggested 4 percent trigger should be utilized as a 
determiner of whether or not a State gets 13 weeks additional 
unemployment assistance. Every State would get the first 13 weeks. But 
if this becomes law, the trigger would determine whether a State would 
get an additional 13 weeks of assistance, based upon its unemployment 
rate; and then, after that 13 weeks, if the State still had high 
unemployment, it would trigger an additional 13 weeks and so on. We 
could resolve the unemployment issue for the rest of calendar year 2002 
by moving this legislation.
  In addition to that, I hope people have not forgotten the commitment 
to assist the City of New York. They took it on the chin for all 
Americans. In this bill is the ``liberty provision'' to assist in the 
rebuilding of downtown Manhattan. That is a promise that we made. This 
bill will be a promise that we deliver.
  It seems to me that when someone decides that someone else ought to 
do the thinking for us, we have given up on trying to be creative and 
responsive. This bill is different than the one that we sent to the 
Senate in October; it is different than the one that we sent the Senate 
in December. It is different in positive ways. It helps more people, 
more meaningfully, and it ought to be passed.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MATSUI. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, I just have to say that I am not sure if the gentleman 
and I are reading from the same bill, because he talks about 
stimulating the economy; but as I read these tax provisions for 
corporations, that is not what this does. He has a provision in there 
that would eliminate the alternative minimum tax, not for individuals, 
but for corporations. As the Congressional Budget Office has said, this 
helps corporations from their past activities, it does not stimulate 
the economy.
  There is a provision in there that encourages corporations to keep 
their earnings overseas and not invest in the United States. That costs 
about $13 billion or $14 billion over the next 10 years. That does 
nothing to stimulate the economy. In fact, it works in the opposite 
direction.
  The tax provisions in this particular bill do very little to 
stimulate the economy of the United States. In fact, they are really 
corporate handouts as a result of a commitment made to the U.S. Chamber 
of Commerce last year when the chamber decided not to put corporate tax 
breaks on their individual tax cut bill. So what they are doing is 
using as a bootstrap the unemployment benefits, aid to New York in 
order to get these corporate tax breaks. In fact, the corporate tax 
breaks and the acceleration of the 28 percent rate, which helps 
basically the higher-income people, is about two-thirds of the $175 
billion in tax cuts over the next 10 years.
  The real tragedy is the Senate, the other body, passed their bill to 
give an additional 13 weeks' unemployment benefits to the American 
unemployed unanimously. Democrats and Republicans alike worked together 
to do this.
  Think about this for a minute. There are 8 million people unemployed 
today; there are a million that have lost their benefits since 
September 11, and in the next 6 months there will be another 2 million. 
They are losing them at a rate of 77,000 a year. The gentleman from 
California, the Chair of the Committee on Ways and Means, knows that 
the Senate will not act on this bill. So we are basically telling the 
unemployed that because of politics, because they want to help their 
corporate friends, we are not going to be able to help the unemployed 
in America.
  I want to conclude by making one other observation about this, Mr. 
Speaker. This money, this money that is being used to pay $175 billion 
worth of corporate tax breaks over the next 10 years comes from the 
payroll taxes of the average American, the waitress that serves us in 
the House dining room, the elevator operator that gets us up to the 
second floor so we can vote. These are the people that the money is 
coming from. The payroll taxes are paying for corporate tax cuts, 
mainly because we are now in a deficit. We had $5.6 trillion worth of 
surpluses. We have eaten them all up. It is gone. At the end of this 
fiscal year, we are going to have deficit spending.
  So this is not a fiscal stimulus bill; this is a bill to help the 
corporate tax breaks of America.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Missouri (Mr. Hulshof).
  (Mr. HULSHOF asked and was given permission to revise and extend his 
remarks.)
  Mr. HULSHOF. Mr. Speaker, I continue to be puzzled by this cowering 
in

[[Page H495]]

the shadow of the other body. Last night we heard that we could not try 
to make some genuine changes to campaign finance reform because we 
might somehow fall out of favor with the other body. Mr. Speaker, have 
we relinquished our constitutional authority over to unanimous consent 
requests?
  I think what I would like to say, first of all, is to set the record 
straight on the AMT, on the alternative minimum tax. This bill, just 
like the one in December, does not repeal the alternative minimum tax 
that corporations must pay. We do, however, make some crucial reforms 
in the AMT to maximize the impact of, for instance, the bonus 
depreciation investment incentives.
  Let me just talk about a real-life story to the gentleman from 
California who says that this stimulus bill would just help 
corporations. Recently the St. Louis business community was sent 
reeling with news that Ford announced a closure of a plant in 
Hazelwood, Missouri. About 3,000 workers' jobs are now in peril, not to 
mention the surrounding community, and not to mention the surrounding 
businesses that depend upon those workers to stay in business.
  A handful of political leaders, including the Democratic leader, 
journeyed to Detroit to meet with corporate headquarters to try to 
convince the automaker not to shut down this worthwhile plant in St. 
Louis. What if? And I do not have the answer to this, Mr. Speaker. It 
is a rhetorical question. What if we had passed this economic stimulus 
bill last fall? What if we had provided some real relief, this penalty 
and this counter-cyclical punishment of corporations that have to face 
this alternative minimum tax? What if we had been able to provide that 
economic help back last fall or even as far back as December? Would 
those workers, those 3,000 auto workers' jobs still be in jeopardy?
  Again, I do not have the answer to that; but to me, as we debate 
this, inaction continues to be not an option.
  Mr. Speaker, I urge passage of this bill.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Maryland (Mr. Cardin).
  Mr. CARDIN. Mr. Speaker, this is a very easy issue for people to 
understand. If we concur in the Senate amendments, we send a bill to 
the President today extending unemployment insurance for 13 weeks for 
the people who have exhausted their benefits.
  Mr. Speaker, there are currently 8 million people who are unemployed 
looking for work in this country. If we pass the motion that is 
suggested by the chairman of the committee, we will get nothing done. 
Nothing will occur. It is the same old bill that we tried to do once 
before, twice before. The only thing certain is that we are going to go 
home for the Presidents' Day recess and it will be 2 weeks before we 
are really back here doing work again; and during that 2 weeks, there 
is going to be another 150,000 people in this country who will have 
exhausted their unemployment insurance benefits and cannot find 
employment. That is what is going to happen.
  It is not about the pride of whether we accept what the Senate wants, 
the other body wants, or whether we have the right to add or subtract 
to it. That is not what is in question here. The question is whether we 
are going to hold the displaced workers, those who have lost their 
jobs, hostage to the Republican tax agenda to cut business taxes.
  During the last five recessions, we have been able to work on a 
bipartisan basis to extend unemployment compensation benefits. We did 
that without holding it hostage to other agendas in this body. We 
should do that again.
  There are more than 1 million jobless workers who have had their 
unemployment insurance expire since September 11. The number of workers 
who have exhausted their regular UI benefits is expected to be 750,000 
higher in the first half of 2002 than it was in the first half of 2001. 
The FUTA taxes, money we have set aside, equal $40 billion for this 
purpose, so the money is there. Make no mistake about it, we have an 
option to do something today; and if we do not, the responsibility 
rests solely with the Republican leadership in this body.

                              {time}  1245

  Mr. THOMAS. Mr. Speaker, I yield myself 15 seconds.
  It is amazing how swiftly someone can place blame. If, in fact, we 
did what the gentleman said, there would be no health insurance for 
displaced workers, no New York assistance, no low-income help, no small 
business help. It is interesting we are to blame when in December we 
sent the Senate unemployment and only now it is coming back.
  Mr. Speaker, I yield 3 minutes to the gentlewoman from Connecticut 
(Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman for 
yielding me time.
  First of all, I do not understand why my colleagues think going home 
having extended unemployment 13 weeks is help. Why is it not better to 
go home and have extended unemployment 13 weeks, put in an automatic 
trigger so unemployed people cannot be held hostage by the other body 
if the recession lasts? Why is it not better to go home and provide 
health benefits for those who are unemployed? The first time in our 
entire history that we have ever said to the unemployed that health 
security is just as important as income security when you are 
unemployed. Why is it that Members think, and I have had Members say to 
me, well, the New York aid, we will do that later. Do they not 
understand the other body is not capable of doing it later? They would 
have done it if they could have done it. Why did they not add it into 
the extension? It is very important. What about the extenders? My 
colleagues have all voted for extenders many times. Do Members not care 
that the welfare-to-work tax credit is going to expire? Do Members not 
care that the work-opportunities tax credit that helps people coming 
off of welfare, to get employed, to stay employed, prisoners coming out 
of prison to get employed and stay employed, are Members not thinking 
that consistent predictable tax policy protects jobs, reduces the 
number of unemployed? The provisions in this bill, I could go on and 
on.
  Why, after September 11, do we not want to change the carry-back of 
losses when we see losses all across the country in certain sector of 
the economy? Do Members not have any sense of fairness and 
responsibility? Does not the other body? Why did they send us this? Are 
they not thinking about people's lives? Do they not care? Do they not 
care about unemployment compensation, about health benefits for the 
unemployed, about jobs for the people coming off of welfare?
  Get your minds focused. The other body is not capable of action. The 
only thing they will ever act on is on the extension of unemployment 
benefits, and it is our job to put in there the essential things, help 
for New York, certain extenders.
  When we look at the tax provision, extension of mental health parity. 
After all we have talked about mental health benefits? Listen, needless 
to say, I am heated up. I can only say do not hide behind the 
alternative minimum tax. We do not even repeal it. What we do to fix it 
will help individuals as well as businesses.
  I know the politics of Enron and the politics of alternative minimum 
tax. I also know every company that pays those taxes pays them when 
they are in a downturn and gets them back when they are in an upturn. 
We know that there is not one new dollar of Federal revenue either lost 
or gained. So do not distort that issue and hide behind it when the 
unemployeds' well-being is at stake, when women coming off of welfare 
will lose their jobs because that tax credit is gone.
  I urge Members to think, put on this unemployment comp provision, 
exactly what we need, so that we can do that in conference and Members 
can help us in conference. But we cannot let the Senate say compassion 
and caring is just 13 weeks long.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Quinn). The Chair would remind all 
Members in the Chamber to avoid improper references to the Senate.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from the State of Michigan (Mr. Levin).
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)

[[Page H496]]

  Mr. LEVIN. Mr. Speaker, I think the basic point is if people really 
care they would sit down on a bipartisan basis in this House and try to 
work out a package. There has been zero effort to do that in this 
House. Zero.
  I favor a stimulus package, but it should not hold up action on 
unemployment compensation. Five months ago the Speaker stood in this 
House and promised the House would act on unemployment compensation. 
The time to keep that promise is long overdue. And as I said, we have 
had no bipartisan discussions meaningfully in this House on a stimulus 
package.
  We need to work out specific tax provisions. For example, on the 
acceleration of tax rates, CBO has said that the proposal in this 
package would generate little stimulus relative to its total revenue 
loss; that the stimulus is probably small. And as to the AMT, CBO has 
said eliminating the AMT as done here does little by itself to change 
the near-term incentive for businesses to invest; its bang for its buck 
is small. So why not sit down and work out a package on a bipartisan 
basis? The time has come to do both. To pass unemployment compensation 
relief today, and then to sit down on a bipartisan basis in the 
Committee on Ways and Means and work out a stimulus package. That is 
the way to go.
  The way we are going today is a dead end for the workers of this 
country and for the businesses of this Nation.
  Mr. THOMAS. Mr. Speaker, I yield myself 30 seconds.
  Once again we have heard those words ``we eliminate alternative 
minimum tax.'' They just cannot get over it. It is not true and no 
matter how many times they say it, it will not be true. If the 
gentleman wants his promise kept, all he has to do is go back and read 
the trade adjustment assistance tax. What we did, this House passed 
over to the Senate a provision that said that if someone lost their job 
based upon September 11, they would be elevated for benefits as though 
it was related to trade. That promise was kept. It is a problem that 
Members have such short memories and it does not fit your political 
agenda. People who lost their jobs because of September 11 have been 
taken care of in a House-passed bill and the Senate has not done a dang 
thing about it.
  Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. 
Houghton), a very valued member of the committee, the author of the New 
York Liberty Bill.
  Mr. HOUGHTON. Mr. Speaker, thank the gentleman for yielding me time.
  We are going to be talking at cross purposes here as we come from 
different bases. We have different philosophies. We have set in 
concrete certain impressions that we got.
  I will state how I come out on this thing. I think we have three 
issues. First of all, the economy is still in trouble. Secondly, people 
need unemployment insurance, an extension of that; and, thirdly, we 
have a hole right in the City of New York and we have got to fill it. 
Now what is not clear is how we go about fixing these things. Members 
can say the alternative minimum tax is a boondoggle and it does not 
help economic recovery. But I could say it does. But the important 
thing is we get investment and people back to work. Now, that is a 
difficult situation. When times are good, we do not do anything. When 
times are bad, there is the point when the government has to step in. 
And frankly, something has to be done. And I do not know whether it 
will be resolved here or whether it will be resolved in conference. But 
something has to be done by the United States Government to try to put 
a little juice and a little impetus back into the economic recovery. If 
not, we are just going to be languishing and waiting.
  Secondly, as far as up employment insurance, I do not think there is 
any question about it. I think we ought to do it. I do not think there 
is any argument on it.
  As far as the Liberty Zone in New York, the only thing I can comment 
on there is time is of the importance there. There are a lot of people 
making decisions about where they will reestablish themselves, what 
buildings they will go into, and we have 20 million square feet that 
was destroyed down there. Maybe some of the head offices of the larger 
financial firms will stay there, but what about the support staff? Time 
is terribly, terribly important.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from the State of Washington (Mr. McDermott).
  Mr. McDERMOTT. Mr. Speaker, I would say to my friend from New York 
(Mr. Houghton) if he were the chairman of this committee we would 
probably have a bill here we could pass. But when we have a situation 
where the chairman of the committee talks for about 5 minutes about 
this bill, tells us it will be on the floor tomorrow, we never have a 
hearing on it, we do not know what is in it, how could we possibly know 
what is in it? We must have hearings.
  Now, this bill for those Members on my side who cannot figure it out, 
this does two things. This is a fund-raising stimulus bill. That is all 
it is. They do it just before they go home so they can stimulate fund-
raising when they are back in the district. That is why they did it in 
December when they did it. But also this is a bill for PR. If we do not 
get this out of here in the next half hour, a lot of those press 
releases that have already gone out about what we have done for the 
unemployed will be a little bit premature.
  The fact is that if Members wanted to do something about the 8 
million people who are unemployed and the 11,000 per day that are going 
to be exhausting their unemployment insurance and the 2,000,000 that 
are expected to exhaust their unemployment benefits by the end of the 
first 6 months, Members would have accepted the Senate bill and do 
something about it. We all know that 62 percent of the people who are 
unemployed are not even covered by the unemployment insurance. If they 
want to make reform in unemployment insurance, we are glad to sit down 
and talk. But do not wrap it in this stuff and tell us that we have to 
eat all these fund-raising deals to get it for the unemployed. That is 
simply DOA. This bill is dead on arrival. It is DOA when it arrives in 
the other body.
  Now, do they want to do something for people who are unemployed or 
not? It apparently has not occurred to them that if they do something 
twice and it has not worked, doing it a third time is not going to 
work. That is a sign of mental illness, that they do the same thing 
over and over again and expect a different result.
  Mr. THOMAS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Georgia (Mr. Collins), a member of the committee.
  Mr. COLLINS. Mr. Speaker, I thank the gentleman for yielding me time.
  The more I hear, the better I understand that talk is cheap. I want 
to remind those who say that the Senate, the other body, is going to 
accept this as dead on arrival. I also want to remind Members of this: 
the majority Members of the other body support a stimulus package. It 
is the supermajority leader who does not and want to have an issue for 
the fall rather than a solution today. People who are unemployed are 
not so much interested in a UI check.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaTourette). The gentleman will kindly 
suspend.
  I know the Chair has made this reminder before; but again, all 
Members are reminded not to make characterizations of Members of the 
other body and their motives or motivation in enacting legislation.
  The gentleman may proceed.
  Mr. COLLINS. Mr. Speaker, I could not understand all you said.
  The SPEAKER pro tempore. It is inappropriate under the rules of the 
House during the course of debate for Members to make reference to or 
characterize the inaction or action of a Member of the other body. The 
Chair took the gentleman's remarks to do such.


                        Parliamentary Inquiries

  Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
  That ruling is one that is made regardless of whether or not the 
statements made are factual; is that correct?
  The SPEAKER pro tempore. The truth is not a defense. The remark is 
out of order.
  Mr. THOMAS. Mr. Speaker, so the truth is not the criteria for 
determining that you cannot make the statements that the gentleman from 
Georgia (Mr. Collins) made?

[[Page H497]]

  The SPEAKER pro tempore. The rule is a matter of bicameral comity. 
The rules of the House prohibit those references.
  Mr. RANGEL. Mr. Speaker, parliamentary inquiry.
  Should parliamentary inquires be used by the majority to make 
political statements rather than to actually make an inquiry?
  The SPEAKER pro tempore. Parliamentary inquiry may be directed to the 
Chair to determine where in the course of the proceedings we are 
currently located and also to explain rulings the Chair might have 
made; and that is how the Chair took the gentleman from California's 
(Mr. Thomas) observations.
  Mr. RANGEL. Mr. Speaker, well, whether the truth or falsity of a 
statement, if it is a derogatory remark made by a Member in the other 
body----
  Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The Chair will hear from the gentleman from 
New York (Mr. Rangel) first.
  Mr. THOMAS. Mr. Speaker, is he making a parliamentary inquiry?
  The SPEAKER pro tempore. The Chair would ask for order and comity.
  If the gentleman has an inquiry, the Chair's happy to hear it.
  Mr. RANGEL. Mr. Speaker, my inquiry would be, are you stating the 
inquiry made in a parliamentary fashion by the gentleman from 
California (Mr. Thomas) was not a political statement?

                              {time}  1300

  The SPEAKER pro tempore (Mr. LaTourette). The Chair tries to take the 
inquiry propounded by any Member in the best possible light, first of 
all.
  The Chair, second of all, understood the gentleman to ask a question, 
whether or not a reference to the motivation of a Member in the other 
body has any relevance to whether it is a true observation or not.
  The Chair, taking that in the best possible light, concluded that it 
was an appropriate inquiry.
  Mr. RANGEL. Mr. Speaker, taken in its best possible light, I agree 
with the Chair.
  The SPEAKER pro tempore. The Chair thanks the gentleman.
  Does the gentleman from California (Mr. Thomas) still have an inquiry 
before we go back to the gentleman from Georgia?
  The gentleman from Georgia may resume.
  Mr. COLLINS. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman may state his inquiry.
  Mr. COLLINS. Mr. Speaker, is it proper procedure for me to state 
that, in my opinion, the statement I made was factual?
  The SPEAKER pro tempore. The Chair will again indicate that it is not 
appropriate, and as we have learned from the inquiry by the gentleman 
from California (Mr. Thomas), it is not appropriate to characterize or 
give characterization to action or nonaction taken in the other body or 
to ascribe motives to an individual Member of the other body as to why 
they have acted or not acted in a manner, and the Chair felt that the 
gentleman's comments tread upon that ground.
  Mr. COLLINS. Mr. Speaker, further parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. COLLINS. Mr. Speaker, in regards to the other body, my statement 
was then factual to me and to this body. I thank the Chair.
  The SPEAKER pro tempore. The Chair does not consider that to be an 
inquiry. The gentleman may proceed on his time.
  Mr. COLLINS. Mr. Speaker, as I was stating, people who are unemployed 
are more interested in a job even though they know when they do need 
some subsidy, such jobs are created again or opened back up.
  Last year before the Committee on the Budget, the Chairman of the 
Federal Reserve was asked a question about interest rates: Do you think 
you've raised interest rates too quick and too high? His answer was: 
No. What we were trying to do was slow down the capital investments of 
corporations.
  He succeeded because now he states what we need are capital 
investments of corporations, of business, and we are not talking about 
just large corporations. We are talking about all corporations.
  We see that interest rates have been lowered to a record level in 
many years, but it is not working. Low interest rates are good for 
borrowers if someone wants to borrow or if someone wants that cheap 
money. I tell my colleagues who it is not good for. It is not good for 
those who have invested in the money market, and I guarantee my 
colleagues, those people will remember in November what their interest 
bearing is on their CD and their money market accounts.
  So I would advise my colleagues to not drag this thing out again.
  How does stimulus relate to the market and the economy? I have been 
in transportation for over 39 years. Everything at some point moves by 
truck. Inventories are lower, they are not being replenished because 
they have been moved out, and people are turning those inventories to 
cash.
  I have seen the ups and downs of the economy. I have also heard a lot 
about tax credits for creating a job. In 39 years I never hired a 
person because of a tax credit, but I bought a lot of equipment because 
of tax deference. There is nothing in this bill that exempts a 
corporation from tax. It defers a tax so that it encourages them to 
invest, and it does away with the punishment clause that causes a 
company to prepay tax even in a year when they have a bad year. That is 
the alternative minimum tax, and that is how it works.
  This will work. I will give my colleagues an example of a small 
business. Had this bill reached the President's desk in December or in 
October, there is a small business, I talked to the owner in Georgia, 
who was prepared to buy and invest a quarter of a million dollars 
before January 1, 2002, in equipment and plans to buy and purchase over 
the next 3 years $1 million a year because he has seen the ups and 
downs of the economy and how tax relief, tax deference has worked for 
the marketplace and has encouraged people in the marketplace to spend 
money which creates jobs.
  If my colleagues really want to do something for the unemployed, they 
will also support this stimulus package. If my colleagues want to send 
a message to the other body, they will support this and have a larger 
number of yes votes.
  Mr. MATSUI. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Edwards).
  Mr. EDWARDS. Mr. Speaker, talk may be cheap, but this bill is not. In 
fact, it is expensive, fiscally irresponsible and unfair. This bill is 
unfair to our children and grandchildren because it will add billions 
of dollars to the already huge $6 trillion national debt that will 
burden them for the rest of their lives.
  It is unfair to senior citizens because it takes tens of billions of 
dollars over the years ahead from the Social Security and Medicare 
Trust Funds.
  It is unfair to the Army soldiers in my district who, as we speak 
here today, are overseas in harm's way, sacrificing for their country, 
while special interests walk around the halls of Congress with their 
hands out and special deals.
  This bill is unfair to unemployed workers because it delays the 
extension of unemployed insurance, which we could pass today and send 
on to the President and help those families in the days ahead. This 
bill is unfair to workers, to small businesses and family farmers 
because while they work hard, pay their bills and pay their taxes, huge 
profitable corporations are saying they should not have to pay taxes.
  So much for shared sacrifice. We should vote no on this bill.
  Mr. THOMAS. Mr. Speaker, could I request a determination of the time 
remaining, please.
  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas) 
has 14 minutes remaining. The gentleman from California (Mr. Matsui) 
has 20 minutes remaining.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Armey), the majority leader of the House of Representatives.
  Mr. ARMEY. Mr. Speaker, I thank the gentleman from California (Mr. 
Thomas) for yielding me the time.
  Mr. Speaker, it seems every now and then we have to stop and just 
remind

[[Page H498]]

ourselves what the debate is about here. It seems to me there is too 
much confusion with respect to whether or not this debate is about 
cutting taxes, leaving money in the coffers of the Federal Government 
as opposed to the hands of the American people who earned it in the 
first place, and whether or not it is fair and correct to deny this 
poor, beleaguered, suffering government more of our tax revenues.
  Mr. Speaker, that is not what this debate is about. This debate is 
about whether or not this Government of the United States will exercise 
its responsibility to do everything it can to help unemployed American 
workers get back to work. It is about jobs. It is about opportunity. It 
is about a chance to stay on the job, get a promotion on the job, get a 
job in a thriving, growing economy; a thriving, growing economy that 
has been serving the American people well, and one that got locked into 
a bit of a cock hat first by the misguided, ill-advised case against 
the Microsoft company earlier last year that compressed the equity 
markets to the point of economic downturn, and then secondly by the 
attack on America on September 11.
  What are we to do about that? Sit back, call upon the Federal Reserve 
to do all they can, and we do nothing? Or are we to join the effort to 
try to put America back to work?
  Twice already we have tried to put an economic stimulus package 
through this body to the other body and to the President that is 
designed for the purpose of putting people back to work. Twice now, 
despite the fact that a majority of the Members of the other body were 
ready to vote to approve that package, it was stopped. That is a shame.
  Finally, after having done nothing, the other body sends us a paltry, 
paltry, stingy, shortsighted, self-serving, insensitive 13 weeks 
unemployment compensation extension and then has the audacity to 
applaud themselves for their generosity.
  Mr. Speaker, does this great government, with all its resources, all 
its resourcefulness, all its keen minds, we have nothing to offer an 
unemployed American worker except more weeks of unemployment? If that 
is the least we can do, let us at least be humble about it. Let us not 
brag about it. Let us not strut and pretend we have done something good 
here.
  Let us understand, we failed my colleagues and Mr. and Mrs. American 
worker; if all we had to offer was more weeks to stay unemployed, we 
failed them. We do not deserve applause. We certainly do not deserve 
appreciation.
  This House of Representatives cannot do only the least we can do for 
people out of a job in America. We are committing to doing the best we 
can do, and the best we can do is to cut taxes in a smart way to allow 
incentives for investment and growth in employment and jobs and 
opportunity. Again, for the third time, we tried to do that policy 
which was proven to us to be a policy that works time after time after 
time.
  Very simple question, do my colleagues want to stand up with pride 
and say, Mr. and Mrs. America, we tried to put you back to work, or do 
my colleagues want to really go home and say, we just decided to take 
care of our politics in Washington, and we were content for workers to 
stay unemployed for another 13 weeks, and we had nothing else to offer?
  Shame on us if that is all we can do. Shame on us if we have nothing 
in our hearts for people out of a job in America except stay out of a 
job for a little bit longer so that we can continue to have the money 
of those people who are fortunate to stay working. Shame on us if we 
fail them.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. The Chair would again remind all Members to 
refrain from urging action by the Senate or characterizing Senate 
action or inaction.
  Mr. MATSUI. Mr. Speaker, I yield 3 minutes to the gentleman from 
Wisconsin (Mr. Kleczka).
  Mr. KLECZKA. Mr. Speaker, the chairman of the committee, the 
gentleman from California (Mr. Thomas), in his opening remarks said the 
reason we need this bill comes with a very easy explanation. In fact, 
it is one word called jobs.
  I will give my colleagues an easier explanation as to why we need 
this bill, but it is two words. It is called campaign contributions. 
Last year we already passed an economic stimulus bill. It totaled $1.3 
trillion in tax cuts, and many of us argued that that is too much, the 
surplus that we thought would be there might not materialize, and lo 
and behold it has not. So compliments of the party of fiscal 
discipline, this Federal Government is now in a deficit.
  After we passed this massive tax break, the bulk of which folks are 
not going to get, we passed a $15 billion bailout for the airlines, and 
we were told at that time by the Speaker and the minority leader the 
next bill or very shortly we are going to take care of the unemployed 
workers. That was months ago.
  Then the House brought up a bill to bail out the insurance industry. 
Again, nothing done for the unemployed worker.
  Today, we have an opportunity to finally take care of the unemployed 
worker. Pending before the House is a clean, simple Senate-passed bill 
that provides a 13-week extension for the unemployed worker, but the 
majority leader says we do more because that worker needs a job. That 
worker needs an extension because he wants his old job back, whether he 
or she has the seniority or he or she has a 401 or retirement program.
  We can do today what we have not done for months. We can pass this 
bill and have it to the President this afternoon by passing the Senate 
bill. Why must we do it today? Because today Congress goes on vacation. 
We are going on vacation for a week, and as Members are going to be 
scurrying off to Andrews Air Force Base to board those beautiful Air 
Force jets that workers paid for, taking them to exotic places, the 
workers of this country get nothing, the unemployed workers get 
nothing.
  Mr. Speaker, today we can send this valentine to the unemployed 
workers of America, and we are going to sign it, regards, the people's 
House.

                              {time}  1315

  Not the ``Special Interest House,'' not the ``Business Only House,'' 
this is for the unemployed workers from the ``People's House.'' That is 
what we can do today.
  But my Republican colleagues are saying, okay, we will give this to 
the unemployed workers, but we have to give this valentine to our 
corporate business friends. Signed, Love, the Republicans.
  Mr. Speaker let us not blackmail the unemployed workers of America.
  Mr. THOMAS. Mr. Speaker, I yield myself 15 seconds.
  I know the gentleman has his speaking points that have been passed 
out, and he is trying to stay on them; but I really wish he would 
realize that this House, back in December, passed trade adjustment 
authority, which had a provision for workers who lost their jobs 
because of September 11. It is the Senate that has failed to deliver on 
providing help for those who, through no fault of their own, lost their 
jobs.
  It is a fact. I know the gentleman does not like it, but it is true.
  Mr. MATSUI. Mr. Speaker, I yield 30 seconds to the gentleman from 
Wisconsin (Mr. Kleczka), for a grand total of 4 minutes.
  Mr. KLECZKA. Mr. Speaker, it is also true that last October we passed 
a ``stimulus'' bill, a bill which repealed the alternative minimum tax 
for businesses, but made it retroactive to 1986, giving IBM one check 
for $1.4 billion, GM a check for $850 million, and Enron $250 million.
  And my colleague wonders why the Senate did not pass his bill? The 
gentleman poisoned the well with that type of nonsense.
  Mr. MATSUI. Mr. Speaker, I yield 2\1/2\ minutes to the distinguished 
gentleman from Tennessee (Mr. Tanner).
  Mr. TANNER. Mr. Speaker, I would like to make two points, I think.
  In business, when I was in business at home, if we could agree on 
some future course of action, we set that aside and went ahead with it; 
and those matters that we could not agree on what was best for our 
employees and ourselves we would discuss further.
  I think the facts are pretty simple here. We all say we agree on 
unemployment benefits, so why do we not go ahead and do that? That is 
what reasonable people would do, I think, in

[[Page H499]]

this country. Unfortunately, we get in here and get carried away with 
the politics of the moment. But reasonable people, I think across the 
country, would say we can agree on this, so let us do that today, then 
let us come back and talk further about what we cannot agree on.
  Now, speaking personally, there are a lot of things in the package, 
above and beyond the unemployment provisions, that I think are pretty 
good public policy. What I disagree on and what the Blue Dogs have 
talked about forever is the fact that we continue to pile on debt after 
debt after debt, with no attempt to look at the 10-year budget window 
and figure out a way to pay for this stimulus package, so-called 
stimulus package. We do not even make an attempt to do so.
  This package is going to put another $175 billion of debt on us. We 
already know we have another $1 trillion of interest coming in the next 
10 years, if the projections hold. We tried to warn last year that we 
should not put out a 10-year package, where fully 70 percent of the 
expected surplus is not even going to get here for 5 years. That is not 
how we should run the business of this country, and it is foolish to 
try to say that that is going to be the case.
  But beyond all that, people in this country understand borrowing 
money, and they understand paying interest; and this is terribly unfair 
what we are doing when we make no attempt to pay for it. None 
whatsoever. There are some things in there, as I said, that I think are 
good public policy, and I would like to work on and try to figure out 
how to accomplish them.
  We have paid up to now about $140 billion this year in interest 
payments. That is as much as this bill costs almost for the next 5 
years. That shows what kind of unbelievable, almost un-Godly thing we 
are doing to the next generation when we make no attempt to pay for 
these matters.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from the State of California (Mr. Becerra).
  Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  My colleagues, there is a legitimate difference of opinion on what 
constitutes sound economic stimulus for this economy. We all support 
emergency help for the unemployed Americans, over a million that have 
exhausted their benefits. There is even widespread support for the tax 
extenders, such as the work opportunity tax credits. And there is even 
majority support in the body for the accelerated depreciation of 
company assets. But there is not bipartisan, bicameral support to pass 
massive tax cuts that benefit large corporations like Enron and the 
well-to-do in America, especially when those tax cuts are paid for by 
workers' contributions to Social Security.
  These tax cuts raid the Social Security Trust Fund and deepen the 
deficit by $72 billion this year alone. So let us pass what we all say 
we agree on: help and relief for the unemployed American. And then let 
us come back and do the other good, reasonable work on economic 
stimulus. But do not hold Americans hostage while we bicker.
  We toyed with Americans back in September when we passed this airline 
bailout bill of billions of dollars for corporations, and we were told 
it would help American workers. It did not. My colleagues toyed last 
night, the Republican leadership in this House, with campaign finance 
reform; but we were successful in getting it through. Even Enron toyed 
with its workers by making them lose all their money in their pension 
funds and displacing them and now having them unemployed.
  It is time to stop toying with the American worker. It is time for us 
to do some work. There are adults who are unemployed; let us act like 
adults and get some work done. Unanimously the Senate said let us at 
least do unemployment relief for American workers. We can do the same 
thing. Let us be big enough to know there are differences of opinion. 
Let us come together and do what is right for the American worker and 
then come back and do what else is right for the American economy. But 
do not hold the American workers hostage.
  I hope my colleagues will not vote for this because they think it is 
going to help. It is a sham and it will not work. Let us help American 
workers today.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the 
gentleman from Arizona (Mr. Flake).
  Mr. FLAKE. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I want to commend my colleague from California for putting 
together a great package. This is similar to the package we passed back 
in December.
  The most important thing we can do, obviously, for the economy is to 
stimulate, and that is why this package is a good one. It actually has 
stimulation. It ought to stimulate the economy. And the notion that 
simply extending someone's unemployment benefits will somehow stimulate 
the economy is absurd. We have to get away from that.
  We see the other side trot out packages, gifts, Valentines that we 
are supposedly sending out. I would submit that that is the problem. We 
take the money and will only give it back by giving it as a gift, a 
gift that we can bestow, our almightiness here; we can bestow a gift on 
the American people by giving them back some of their money. It is 
their money. We ought to not take so much of it. If we want to 
stimulate the economy, we should not.
  That is why this bill is a good one, and that is why I would urge 
support. It is not unfair to let people keep their own money.
  I urge support of the bill.
  Mr. MATSUI. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from 
Texas (Mr. Doggett).
  Mr. DOGGETT. Mr. Speaker, this bill is really the Republican ``Tale 
of Two Cities.'' The best of times for some: first-class treatment for 
the Kenny-boys of the world. And the worst of times for others: third-
class treatment for the now unemployed Enron mail room attendant.
  And it is a ``Tale of Two Cities'' in another way. The year 2001, a 
historically bad year for Enron in Houston, was a wonderful year for 
Enron here in Washington on tax policy in this House.
  Let's review the year: (1) Enron successfully gets favorable 
treatment in that collection of subsidies and preferences called an 
``energy bill.'' (2) Enron successfully supported efforts to block an 
international crackdown on offshore tax havens. (3) Enron's accounting 
firm, Arthur Andersen, successfully opposes my bill and all legislation 
to crack down on abusive corporate tax shelters. And (4) Enron 
successfully led the coalition that deals with the centerpiece of what 
we are debating now, the change in the alternative minimum corporate 
tax.
  Instead of contributing a dime to the cost of the war on terrorism, 
Enron wanted $254 million back in a government check. That was the 
Republican leadership's idea--the idea of Enron's Republican allies 
regarding the true meaning of sacrifice--they would take while others 
gave.
  Indeed, the Secretary of the Treasury told the Ways and Means 
Committee only last week that he could not find a tax break that Enron 
asked for last year that the administration did not attempt to give 
them.
  If the bill before us today is approved, just like Enron, others of 
the most profitable, largest corporations in this country, will not 
contribute a dime to our national security. The Republicans are not 
just taking the Kenny-boy approach, but they said it was a ``New York'' 
bill. Well, it is. It is the Leona Helmsley approach--``Taxes are for 
the little people.'' That is what Republicans have been telling us all 
last year: ``Taxes are for the little people.''
  And so is shared sacrifice. The little people out there in America, 
the unemployed, the people that work hard to build this country, they 
can share the sacrifice while the Kenny-boys will take their checks and 
go their own way. To add insult to injury, they are paying for all 
their tax breaks by redirecting Social Security payroll taxes to 
finance more tax breaks for those at the very top so that these rich 
corporations do not have to share in the cost of our national security.
  How many times do my colleagues have to pass this bill? Just once. 
Just once, done fairly, without arrogance, done in a bipartisan way, 
instead of passing it at three in the morning like last time in 
December, or squeaking through with arm twisting on a two-vote victory 
in October.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to 
the

[[Page H500]]

gentleman from Louisiana (Mr. McCrery), a valued member of the 
Committee on Ways and Means.
  Mr. McCRERY. Mr. Speaker, I thank the chairman for yielding me this 
time.
  I am going to try to get through my talk here without screaming, 
although it is difficult in the atmosphere that has been created here. 
It is an atmosphere all too often of hyperbole and even demagoguery, 
and I think it is time that those who might be listening to this debate 
are given some facts without hyperbole and certainly without 
demagoguery.
  This package that we are going to pass today to try to stimulate the 
economy, to generate economic growth, to create jobs, to get people 
back to work consists of about $150 billion over 10 years. The fact is 
that about two-thirds of this package, two-thirds of it, about $100 
billion, are either tax cuts or benefits for not big corporations, not 
business, but individuals: workers, the unemployed. Two-thirds, $100 
billion of the package, goes to individuals. One-third, about $50 
billion, goes to corporations and other businesses, partnerships, sole 
proprietorships, small businesses and the like.
  Those are the facts. Despite all the yelling, the screaming, the 
demagoguery and the finger-pointing, those are the facts.
  Unemployment insurance. We go further than the Senate did in their 
package. We not only provide an additional 13 weeks of unemployment 
benefits to the 26 weeks that are already in place under the law for 
the unemployed, but we use an idea that came from President Bush in his 
budget this year to say we are going to lower the required trigger for 
extended benefits to 4 percent of the uninsured rate for any State.
  It does not have to be nationwide, like the current law; any State 
that exceeds the 4 percent unemployment insured rate automatically gets 
extended benefits. That is in our bill. It is not in the Senate bill. 
So we are trying to do more for the unemployed and their unemployment 
benefits.

                              {time}  1330

  Mr. Speaker, let me point out quickly, nobody in this bill or any 
other bill is raiding the Social Security trust fund, which has been 
said erroneously by more than one Member today. Yes, we are using 
surpluses generated by the payroll tax to pay for other things in 
government, but nobody is raiding the trust fund. Every penny that is 
supposed to be going into the Social Security trust fund is going, and 
will continue to go.
  Mr. MATSUI. Mr. Speaker, I yield 1 minute to the gentleman from 
Indiana (Mr. Roemer).
  (Mr. ROEMER asked and was given permission to revise and extend his 
remarks.)
  Mr. ROEMER. Mr. Speaker, this bill is dripping and glowing red, not 
the red of compassion of Valentine's Day, but the red of deficits and 
the red ink that is not paid for and will cost taxpayers across the 
country.
  This will cost taxpayers $180 billion over 5 years, and the Bush 
budget has an $80 billion shortfall.
  I voted for a tax cut that puts money in workers' pockets last July. 
I would vote for a bipartisan package of depreciation allowance and 
unemployment benefits for our workers today. But this bill has things 
in it such as subpart F. Does that help our workers? No, that is for 
banks and insurance companies who operate overseas. If they put it here 
domestically, they lose the benefit. How is that a stimulus?
  Mr. Speaker, we have passed bipartisan education reform. We have 
passed bipartisan campaign finance reform. Let us work together with a 
bipartisan stimulus that helps our workers and helps our economy.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Michigan (Ms. Kilpatrick).
  (Ms. KILPATRICK asked and was given permission to revise and extend 
her remarks.)
  Ms. KILPATRICK. Mr. Speaker, I thank the gentleman for yielding me 
this time.
  Mr. Speaker, leadership, that is what this country wants. Leadership. 
Millions of Americans have lost their jobs from KMart to Ford Motor 
Company, and everything in between across the country. Here we sit as 
435 and 535 of the most powerful people in the world and cannot come 
together on a package that would stimulate the economy, save families, 
give hope to our children, and protect the seniors who built this 
country.
  Leadership, Mr. Speaker, that is what this country needs. If we can 
give $100 billion to the terrorism debacle that we find ourselves in, 
over $50 billion for the airline industry, over $35 billion to the 
insurance industry, can we not find the dollars that families in 
America needs to take care of their children, the people who played by 
the rules, raised their children, did everything we said they should 
do?
  I am appalled by this Congress, as we sit here today, the richest 
country in the world, which was in recession before September 11, and 
then the tragedy of September 11, and cannot come together as leaders. 
Come on, men, 56 women, let us do what is right. Let us come together. 
The Senate passed the unemployment benefit insurance extension. Rise up 
and build, America is at stake.
  Mr. MATSUI. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Speaker, I encourage my colleague from 
Louisiana, my neighboring State, to look at these numbers. This is from 
published Treasury reports. The gentleman said this money comes out of 
payroll taxes. That is right. Most of the folks I represent pay more in 
Social Security taxes than they do in income taxes. We would raid the 
Social Security trust fund to pay for this.
  Right now we owe the Social Security trust fund $1.230 trillion 
unfunded liability. That is nothing but an IOU. Members profess to be 
for the military. We owe the military trust fund $171 billion right now 
unfunded liability. That is money that was taken, set aside allegedly 
to pay their retirement. It is gone, just like that Social Security 
money.
  We owe the civil servants, the Border Patrol folks, $534 billion.
  How can Members come to this floor and say there is a surplus when we 
have increased the debt, mostly through tax breaks and a downturn in 
the economy, by $221,158,156,000 in the past 12 months? What is the 
benefit of this versus the cost, because I know the cost is that we 
never repay those people whose Social Security taxes we have robbed, 
whose Civil Service retirement we have robbed, whose military 
retirement we have robbed, and whose Medicare we have robbed.
  Mr. Speaker, I do not think that it adds up. The gentleman from 
California (Mr. Thomas) gave us some bad numbers last year when the 
gentleman said we had surpluses as far as the eye can see. I am giving 
Members the facts right now.
  Mr. MATSUI. Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman 
from Ohio (Mrs. Jones).
  (Mrs. JONES of Ohio asked and was given permission to revise and 
extend her remarks.)
  Mrs. JONES of Ohio. Mr. Speaker, I keep hearing that the third time 
is a charm. This was a bad bill the first time; it is a bad bill the 
second time; and it is a bad bill the third time. The American people 
are not going to be charmed about this bill, even on Valentine's Day. 
They do not want candy. They want jobs and benefits.
  In Cleveland, Ohio, we just lost 3,000 jobs from LTV Steel because of 
overcapacity of steel in our Nation, and we lost it because this 
government did not come up with a steel stimulus package that would 
allow the steel industry to benefit.
  We lost 1,000 jobs with TRW, and another 3,000 jobs with Ford. I came 
through the airport the other day. Something I had on buzzed, and I 
looked up and I was being wanded by a former LTV worker who said to me, 
Congresswoman, we are here working in the airport because we no longer 
have jobs at LTV.
  I suggest this morning that the problem we have is that this is not a 
bill that will help unemployed workers, nor do we have a budget that is 
going to help unemployed workers. If we were going to help them, we 
would not have reduced Pell grants, reduced dollars to elementary and 
secondary education. If we were going to help them, we would not have 
reduced dollars for job training programs. If we were going to help the 
unemployed workers, we would not

[[Page H501]]

have reduced dollars for affordable urban and rural housing.
  Mr. Speaker, I suggest we need to come together and sit down and stop 
playing with the unemployed, but help them.
  Mr. MATSUI. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Green).
  Mr. GREEN of Texas. Mr. Speaker, as it has been said before, this is 
the same song in the third verse. I respect my colleagues on the other 
side of the aisle, but they are wrong in this third effort. In fact, 
there is a country western song called, ``What Part of No Don't You 
Understand?'' ``No'' to the AMT tax cuts, ``no'' to the other tax cuts 
that will not help the economy.
  I am surprised that my Republican colleagues insist on making the 
thousands of unemployed Americans continue to suffer. We could pass the 
bill that passed the Senate last week, an additional 13 weeks, by 
unanimous consent today; but no, Members want to add to this Christmas 
tree because they want to send it to the Senate one more time so it can 
die like the last two. Members are using this like a political weapon 
instead of being concerned about the American people.
  Like most of our Nation, I have constituents who are unemployed, in 
my own town of Houston, just the Enron employees who have lost their 
jobs because of mismanagement and corruption. My constituents need this 
extension now. The idea of just playing with it like we are doing here 
is outrageous to the people who need this help.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Washington (Ms. Dunn), a member of the Committee on Ways and Means.
  Ms. DUNN. Mr. Speaker, I have an overwhelming sense of deja vu. This 
is the third time the House has taken up a bill to help workers and 
boost the economic recovery. Some of my colleagues in the opposition 
prefer platitudes and promises instead of action. They would rather 
talk about helping the unemployed and promoting economic growth rather 
than putting together a workable plan. Their motto ought to be ``Just 
say no.''
  Mr. Speaker, with all due respect, wishing for a stronger economy 
will not make it so. Congress needs to act. Our constituents might 
justifiably wonder why we are voting on this bill a third time. They 
ought to know that 2 months ago the House passed a generous, fair-
minded bill that provided $37 billion in unemployment coverage, health 
coverage for the unemployed, tax incentives for businesses, and tax 
relief for the middle-income families. But the other body objected. 
Why? We just recently heard it from the gentleman from California, 
because they said that tax relief would help the rich.
  What does that mean? The rich like the schoolteacher who lives in my 
district who makes $30,000 a year and cannot afford housing in her own 
district and drives an hour to get to work? She is in the 27 percent 
bracket; they do not want to lower it. Is she one of the rich they are 
referring to?
  The other body also objects to our health care provisions. Why? They 
did not agree with the way that we cover the unemployed. They would 
like to help the folks who work only for big business. They do not want 
to help the employees in small businesses who do not have access to 
health care coverage when they are laid off.
  Mr. Speaker, these arguments are lost on the American public. In my 
part of the Nation, we have not yet felt the full impact of the 30,000 
Boeing workers who expect to be laid off, and yet unemployment in 
Washington State is over 7 percent, number 2 in the Nation and 
climbing.
  This bill would provide additional unemployment to the 13 weeks we 
already provide in this bill because my State of Washington qualifies 
under that 4 percent unemployment rate. We are at 7.1 percent. Further 
delay is unacceptable.
  Mr. Speaker, I urge Members to act now. Let us get this bill passed 
and over to the Senate. Let us get the job done so we can get help to 
our folks at home.
  Mr. THOMAS. Mr. Speaker, I yield the balance my time to the gentleman 
from Ohio (Mr. Portman), and ask unanimous consent that he control the 
balance of the time.
  The SPEAKER pro tempore (Mr. LaTourette). Is there objection to the 
request of the gentleman from California?
  There was no objection.
  Mr. MATSUI. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from Texas (Ms. Jackson-Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in opposition to H.R. 
622 for the 187,000 that are losing their jobs, and the Enron employees 
in my district that are desperately in trouble because of the Enron 
collapse.
  I rise in strong opposition to this ``economic stimulus package'' 
because it is a deviation from the bipartisan precedents set in recent 
months by Congress, and represents misguided priorities.
  Today's consideration of a motion to concur in the Senate amendments 
with an amendment to H.R. 622--Hope for Children Act allows for a raid 
on the bipartisan 13 week extension of worker unemployment compensation 
passed by the Senate.
  The Senate package, which passed by a unanimous vote, provides a 13-
week extension of unemployment benefits for people whose regular 
benefits have been exhausted. This represents real and responsible 
stimulus for those who need it most. This is crucial because it is 
estimated that 2 million working Americans will exhaust their regular 
benefits in the first 6 months of this year. In fact, very few of them 
are now currently eligible for an extension of those benefits to ensure 
they have income to replace their lost wages while they are seeking 
either reemployment or new employment.
  Instead, this bill substitutes that compromise with a highly partisan 
Republican bill that excludes the Minority from this process, raids the 
Social Security and Medicare trust fund, and sacrifices American 
workers in need.
  Substantively, this bill precludes the Minority from offering a 
substitute, any amendments, or a motion to recommit, which effectively 
eviscerates the fragile bipartisan compromise reached in the Senate. 
But the American people must be told the trust about this travesty of 
process.
  I, along with my Democratic colleagues in Congress, have stood 
shoulder-to-shoulder and toe-to-toe with the President in the war 
against terrorism. We have been steadfast in our bipartisan support. As 
a result we've strengthened our security and protected America from 
future attacks. But for the state of our union to truly be sound, we 
must stand together today for a real economic stimulus package that 
helps all Americans. Sadly, the bill before us puts partisanship and 
the special interests above the millions of workers affected by the 
recession. As a member of Congress from Houston which has been so 
severely hit by recent events, I take particular exception to this.
  Today, I urge Congress to take up a real economic stimulus and worker 
relief package that will help the 5,000 ex-Enron employees in and 
around Houston who have lost their jobs and their hard-earned pensions. 
Today, I urge Congress to take up real economic stimulus and worker 
relief package that helps the 89,000 American manufacturing workers who 
lost their jobs last month; the 54,000 American construction workers 
who lost their jobs last month; the 100,000 airlines workers who have 
lost their jobs since September 11, 12,000 of which were from 
Continental Airlines alone; the 192,000 American service industry 
employees who lost their jobs in the fourth quarter; the 211,000 
American transportation and public utilities workers who lost their 
jobs over the past seven months; and the 1.4 million Americans who lost 
their jobs since last March.
  Mr. Speaker, America needs a temporary plan that stimulates the 
economy by focusing on unemployment and the 2,496,784 initial claimants 
reported by the Bureau of Labor Statistics in December 2001. In Texas 
alone, the number of unemployed was 539,947, or 5.1 percent in December 
2001. Clearly, these numbers are far higher today. The bill before us 
fails to give the relief that is needed. The bill before us is not 
temporary. It does not target relief to businesses hurt by the 
recession; it enacts tax reductions for the wealthy and corporations, 
and does very little to help middle income workers whose extra spending 
would serve to stimulate the economy. In fact, the bill before us 
repeals the corporate minimum tax which ensures that corporations can 
not use tax shelters and loopholes to avoid taxes. Furthermore, it 
accelerates a cut in the 28 percent tax bracket even though 75 percent 
of American households would receive no benefit from this cut because 
they do not have enough income to be in this tax bracket.
  Perhaps most disturbingly, all of the costs of the bill are paid out 
of Social Security and Medicare surpluses. Clearly, permanent and 
expensive tax cuts like those included in this package will increase 
the deficit and risk increasing long-term interest rates.
  Mr. Speaker, America needs a stand-alone worker relief bill that 
helps the 1 million U.S.

[[Page H502]]

employees who have just lost their unemployment, and the 2 million who 
will lose their benefits by the end of 2002.
  In my State of Texas I called and worked with the Department of Labor 
to set up a rapid response team to help displaced workers find the jobs 
that they need. But much more needs to be done. Last night I had an 
amendment that would have extended unemployment benefits for 1 year. 
That would have gone a long way toward helping Americans and 
stimulating the economy. Today, I urge an up or down vote on an 
economic stimulus package that is responsible and targets unemployed 
workers only.
  Mr. MATSUI. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from North Carolina (Mrs. Clayton).
  (Mrs. CLAYTON asked and was given permission to revise and extend her 
remarks.)
  Mrs. CLAYTON. Mr. Speaker, we have many unemployed persons in my 
district. In North Carolina alone we have 28,000 people who have 
exhausted their insurance already. We have experienced an increase of 
105 percent in unemployment. We need to stop the bickering, stop the 
shenanigans between the two Chambers of Congress and do something for 
the millions of Americans who need our help.
  Mr. Speaker, after 8 years of economic prosperity, and budget 
surpluses, the nation's economy is spiraling downward. Consumer 
confidence is declining, unemployment is rising, and deficit spending 
is returning.
  Today, we are considering a bill that would extend for 13 weeks 
unemployment benefits for displaced workers. During the past year, more 
than 1.5 million jobs were lost. Many unemployed persons have exhausted 
their unemployment benefits.
  In my State, North Carolina, more than 28,000 people have exhausted 
their unemployment benefits, and we have experienced an increase of 105 
percent in unemployment. Others were not eligible for unemployment 
compensation or health care benefits because they worked for short 
periods of time, or in temporary or part-time jobs.
  A national economic stimulus package must provide additional relief 
for unemployed workers. Helping unemployed workers is the first thing 
to do and it is the smart policy to address the economic slowdown. This 
certainly is more effective than more huge tax cuts for large 
corporations and wealthy individuals. Unfortunately, this $81 billion 
bill only provides about $10 billion in benefits for workers and their 
families. Most of the relief provided would benefit wealthy individuals 
and large corporations. Most economists agree that in a recession, we 
should increase consumer confidence and their ability to purchase 
necessary goods and services. Unemployed workers lack such confidence 
and purchasing capacity.
  Simply paying money to state governments for unemployment 
compensation programs without requiring some adjustments in program 
administration would not be wise. Many states, like the Federal 
Government, are financially distressed. They cannot afford to match 
federal contributions, to expand coverage periods beyond 26 weeks, or 
to increase categories of eligible workers such as part-time workers. 
The current crisis calls for these changes plus adjusting the federal/
state match from 50/50 to a larger federal share, perhaps 75/25. 
Expanding unemployment compensation benefits offers another advantage--
it provides economic stimulus when it is needed without causing damage 
to the long-term economic condition of the country.
  Congress has passed bills to help airlines, insurance companies, and 
big businesses. It should pass a meaningful economic stimulus bill to 
help families of displaced workers. The Republican leadership of the 
House should rise above partisan posturing and bickering with the 
Senate and simply pass provide unemployment insurance and health 
benefits now for those millions of Americans who desperately need them.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Neal).

                              {time}  1345

  Mr. NEAL of Massachusetts. Mr. Speaker, today I am reminded of the 
disappointment that Charlie Brown feels on Valentine's Day when that 
cute little redhead did not give him a valentine. Many of us had great 
hopes that we could simply take up relief for unemployed workers, a 
bill which passed the Senate unanimously last week; but just like 
Charlie Brown, we keep checking the mailbox and unfortunately come away 
again filled with disappointment.
  The Republican bill today is composed mainly of some old, worn-out 
tax items that have been around for a long time. It reflects the tired 
philosophy of trickle-down economics, take care of the large and 
powerful corporations and eventually the rest will trickle down to us. 
But it is wrong to hold this bill hostage to temporary tax relief for 
the unemployed who, but for the sake of this debate, will find 
themselves on the outside looking in again for a few more weeks.
  The disappointment I feel today is not in the same league with the 
disappointment that many hard-working Americans are going to feel, 
however. By slapping on a $150 billion tax cut in the dead of night, 
the leadership has ensured that this bill will not reach the 
President's desk this weekend. Two million Americans are approaching or 
already have exhausted their unemployment benefits and cannot be 
assured that any relief is in sight. That disappointment is one that I 
hoped the Congress would not be delivering on this Valentine's Day.
  Reject the bill in front of us. Let us go back to work. Pass a 
simple, clean extension of benefits for the unemployed and their 
families who depend upon them and today who depend upon us.
  Mr. PORTMAN. Mr. Speaker, I yield 1 minute to the gentleman from 
Oklahoma (Mr. Watkins), a valued member of the Committee on Ways and 
Means.
  (Mr. WATKINS of Oklahoma asked and was given permission to revise and 
extend his remarks.)
  Mr. WATKINS of Oklahoma. Mr. Speaker, I rise in support of this bill. 
Let me say, as my colleague from Louisiana said, two-thirds of it goes 
to individuals. Let no mistake be made about that. Another third goes 
to business and industry that produces jobs.
  Let me say, I am flabbergasted at a lot of the folks who get up and 
say it does not help other people, only the big corporations. Let me 
tell you who it helps, also. The suspension of net income limitation 
helps support those hundreds of thousands of small stripper wells in 
Texas, the roughnecks out there, the oil patch workers who are losing 
their jobs. I am amazed that many of them did not know that over on 
this side.
  But let me tell you also who it hurts. My heart goes out to those 
people who say they lost a job. I will do everything to build jobs, let 
me tell you; but I am here also trying to help those who have never had 
a job, many of them Native Americans. Native Americans would be helped 
by this bill. They will be able to have possible manufacturing jobs and 
many of the others developed with accelerated depreciation on their 
lands. We need to be helping those folks, also.
  Let me assure you, this bill does more than help the big industries. 
I resent the fact that you state that you are doing it for political 
purposes, because I do not plan to come back.
  Mr. PORTMAN. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Arizona (Mr. Hayworth), a member of the Committee on 
Ways and Means.
  Mr. HAYWORTH. Mr. Speaker, at the end of the day this afternoon, we 
are faced with a fundamental question. Implicit in the criticism from 
our friends in the minority is the notion that there is only one course 
of action here and that is 13 weeks' unemployment and that is it. What 
we do here is improve the legislation, not only 13 weeks' unemployment 
but an economic trigger for those States that are having challenges.
  Moreover, provisions for health benefits. Recall our friend from 
Kansas brought a letter down a little while ago from the President 
asking not only for unemployment benefits but for health benefits. It 
is our role in the Congress of the United States to take legislation 
from the other body and improve it and we do so.
  And there is something else that is important. This bill also 
provides tax relief that fires the engines of economic opportunity. We 
passed it once. We have passed it a second time. On this third 
occasion, we give the other body the opportunity to join us in an 
effective plan to put people back to work and to provide for those who 
have lost their jobs.
  I ask my colleagues to support the measure.
  Mr. PORTMAN. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Ryan), a valued member of the Committee on Ways and 
Means.
  Mr. RYAN of Wisconsin. I thank the gentleman for yielding time.

[[Page H503]]

  Mr. Speaker, this debate today has been rather unfortunate. We have 
heard a lot of emotions, a lot of fear, a lot of envy. What we are 
trying to accomplish is simply this: let us take stock in what our 
Nation is facing right now. We are in the midst of a war, we have a 
homeland security crisis, and we are in recession. We have a lot of 
laid-off workers and more layoffs are occurring. And we know as a 
historical fact that even if our economy begins to slowly recover, that 
unemployment is going to linger on and on and on well after that 
recovery takes place.
  What we have been trying to do, starting in October, then in December 
and now, is to try and get people back to work. The things we are 
trying to pass in this bill are the time-tested, proven, bipartisan 
solutions to get businesses to stop laying off people, to hire people 
back, and to help those people who have lost their jobs.
  It is more than just giving someone an unemployment check. It is also 
helping those people with their health insurance while they have lost 
their jobs, and, more important than just that unemployment check is to 
do what we can to give people a paycheck. We have got to get the engine 
of economic growth growing again, because we now know because of 
recession, we do not have the revenues we wanted to, we do not have the 
revenues we need to fix Medicare, to fix Social Security, to fix these 
issues. We have got to get Americans back to work, then the surpluses 
come back, then the jobs come back. That is the constructive answer we 
are trying to accomplish here on, yes, a bipartisan basis.
  I urge Members to drop the demagoguery and to pass this bill to help 
us work together to get the American people back to work and help those 
people who have lost their jobs.
  Mr. MATSUI. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, we can handle this very logically and expeditiously. I 
think the gentleman from New York (Mr. Houghton) mentioned that there 
are three issues here: Obviously, how we deal with the New York 
problem; how we deal with the unemployment benefit; and how we 
stimulate the economy. We agree on the first two. We should just pass a 
bill right now that would take care of New York's problem. We could do 
it and send it over to the other body. They will pass it. We can 
actually take care of that issue. That is simple. No one is going to 
object to that.
  Unemployment benefits. In terms of the discussion that went on today, 
no Member in that 1 hour of debate has said that they do not want to 
give unemployed benefits to the 8 million unemployed Americans. Why not 
just take the other body's bill and just agree to it? We could do that 
by unanimous consent, vote it on the suspension calendar.
  We do have a difference, because the other side wants to give 
corporate tax cuts; and we think that in order to deal with the economy 
and stimulate it, we have to create more consumer demand. There is a 
big difference there. Obviously, we do not agree. We should not hold 
New York and we should not hold the unemployed hostage. We should pass 
those and then let us debate. Let us see if we can come up with a 
bipartisan proposal on how we stimulate the economy through either tax 
cuts for major corporations or how we try to create more consumer 
demand.
  I hope that we vote ``no'' on this motion.
  Mr. PORTMAN. Mr. Speaker, I yield the balance of my time to the 
distinguished Speaker of the House, the gentleman from Illinois (Mr. 
Hastert).
  Mr. HASTERT. Mr. Speaker, to my colleagues on this side of the 
Chamber, and to my colleagues on this side of the Chamber, I first want 
to say that yesterday was an incredible day. It was an incredible 
debate. Reformers came to this Chamber. They changed some of the rules 
on how we do things, how we elect our officials. This House worked its 
will. That is the way it should be.
  But now we need to look at other needs. We need to look at the needs 
of the American people. We are in recession. We are in a war. We are in 
a time of terrorist threat within this country, within our own Nation 
as well as around the world.
  In October, we passed an unemployment compensation extension. In 
December, we passed a stimulus package. We knew that people were out of 
work. We knew that people were losing jobs.
  What we tried to do during this time frame was to do three simple 
things. Number one, because every American family who had some 
substantive savings, wealth in 401(k)s and the stock market, to get the 
confidence back in the stock markets, to get the confidence back in 
people putting money in those securities. This bill helps do that.
  We also said that we needed to be able to get some consumer 
confidence. When you talk about the Fortune 500 companies, they said we 
need people with money out there to start buying our products. This 
bill does it. It puts money in people's pockets right away.
  Finally, there are people out there who lost their jobs. They need 
unemployment compensation. They need health care. It is in this bill. 
But they also, more than that unemployment compensation check, they 
would like to have a job. And so you need to concentrate that capital 
where companies are putting that money back into creating jobs, 
building buildings, buying machinery, putting money in new ideas. This 
bill does it.
  I heard the previous speaker say, ``Don't hold these people hostage. 
Don't hold New York hostage.'' We are not. We take care of New York in 
this bill. We are not holding the unemployed hostage. We take care of 
them in this bill just as we have done two times previous. But, ladies 
and gentlemen, let us not hold America hostage. Let us get this 
legislation done. Let us give people confidence in the markets. Let us 
give people confidence that they are going to get a paycheck. Let us 
give them the confidence that they can have a job so that they can pay 
their house payment and their car payment.
  It is time to get this job done. It is time to quit playing political 
games. It is time to get a stimulus package for the people of the 
United States. Vote for this motion.
  Mr. PASTOR. Mr. Speaker, I rise in strong opposition to this 
misguided attempt to stimulate our economy.
  Today, the House of Representatives leadership is lining unemployed 
Americans against a wall for another St. Valentine's Day Massacre.
  While pretending to pass an economic stimulus package, they are 
holding the unemployed hostage in hopes of passing larger tax breaks 
for wealthy individuals and large corporations.
  The Senate has passed legislation to extend Unemployment Compensation 
for the 1 million people who have exhausted their unemployment benefits 
since September 11. Yet, the House leadership has chosen to ignore the 
plight of these people, and the more than 2 million workers who will 
exhaust their benefits over the next 6 months, and attach a misguided 
``economic stimulus'' package to the bill that will do nothing to 
stimulate the economy. I call on the House leadership to consider the 
clean bill passed by the Senate so we can help the 8 million people in 
America who are looking for jobs.
  According to sources, 11,000 people are exhausting their Unemployment 
Compensation each and every day. With Congressional District Work 
Period starting today, more than 120,000 Americans will have lost their 
benefits by the time we return to Washington on February 26. We should 
stop playing partisan politics with these people's lives.
  But, there are other serious problems with this ``stimulus package.'' 
Any more tax cuts would continue to erode the Social Security and 
Medicare Trust Fund by almost $80 billion. It is time to stop 
threatening our elderly just to make the 15 percent of wealthiest 
Americans even wealthier.
  Valentine's Day is a time for us to open our hearts and to give of 
ourselves. But this legislation will only serve to break the hearts of 
those unemployed Americans who need our help.
  Mr. MALONEY of Connecticut. Mr. Speaker, for the third time in 4 
months, the House of Representatives will consider a deeply flawed 
economic stimulus package.
  In January 2001, the nonpartisan Congressional Budget Office 
projected that the Federal Government would end fiscal year 2002 with a 
$106 billion surplus. At that time, I advocated a fiscally responsible 
plan of equally dividing the surplus between tax cuts, paying down our 
Nation's debt, and investing in important priorities like education and 
health care. Unfortunately, in June legislation was passed--over my 
strong objections--that cut taxes more than we could afford. I have 
long supported tax relief, but it must be in balance with what we can 
afford in our budget. We are now facing large, multiyear budget 
deficits that threaten our long-term economic security.

[[Page H504]]

  Any stimulus bill must be fiscally responsible and provide assistance 
to families and small businesses experiencing the effects of the 
recession. The bill we are considering today, as did the previous 
versions, includes provisions that I strongly support, but these 
positive elements cannot make up for its fundamental flaws. Those 
positive elements, include providing a supplemental rebate to those who 
received only a partial or no rebate as a result of last spring's tax 
cut, providing small businesses a bonus depreciation of 30 percent over 
3 years, and reducing the recovery period for making improvements to 
leased properties. Additionally, I support a permanent rate cut for 
low- and moderate-income earners.
  In addition, I strongly support extending unemployment benefits to 
the approximately 2 million Americans who have lost their jobs as a 
result of the recession and the September 11 attacks. In the middle of 
March, those individuals and families who have lost their jobs because 
of the attacks of September 11 will begin losing their unemployment 
benefits. We also need to include provisions that assist families in 
continuing their health care coverage. We must pass a bill that 
provides substantial relief to those families, and will get to the 
President's desk. Unfortunately, this bill does not provide that help.
  Moreover, this bill virtually eliminates the Alternative Minimum Tax 
(AMT) liability for the Nation's largest and wealthiest corporations. 
The AMT is designed to ensure that corporations cannot avoid paying 
their fair share using deductions to entirely eliminate all or almost 
all of their tax liability. The bill before us today would allow 
corporations to claim deductions against their AMT liability that they 
currently are not allowed to take. This will provide little, if any, 
stimulus to the economy, but will certainly exacerbate the budget 
difficulties we now face. Worse yet, the bill pays for this corporate 
AMT tax giveaway by taking the funds from the Social Security and 
Medicare Trust Funds.
  In this time of budget deficits we cannot and must not continue to 
raid the Social Security and Medicare Trust Funds to pay for tax cuts 
for wealthy corporations. Over the past few weeks, many have spoken of 
protecting our Nation's economic security. I suggest that passing 
legislation that threatens the Social Security and Medicare Trust Funds 
threatens the very foundation of our economic security.
  Mr. Speaker, I urge my colleagues to pass a bill that provides 
fiscally responsible stimulus to our economy and relief to displaced 
workers. Unfortunately, the bill before us today will both further 
extend the deficits we are facing and also deplete the Social Security 
and Medicare Trust Funds. Long-term economic security depends on long-
term fiscal responsibility. We owe our citizens a bill that provides a 
short-term stimulus, substantial assistance to the unemployed, and 
ensures long-term growth. The bill before us today fails to meet all 
three of these standards.
  Mrs. WILSON. Mr. Speaker, I rise today to talk about the state of the 
economy and jobs. In June, July, and August when we passed the first 
stimulus bill, we were all hoping that if we dipped into recession at 
all that we would have a soft landing. September 11 changed all that. 
When we saw those planes crash into the towers in New York and the 
planes crash in Pennsylvania and here in Washington, DC, we saw and 
felt a shudder through the American economy.
  It was not only travel and tourism that was hurt, but also consumer 
confidence. For 5 consecutive months after September 11, consumer 
confidence fell. But we are coming back. Consumer confidence rose for 
the second consecutive month in 2002, and we need to encourage this 
growth by passing an economic security bill.
  In October, the President called for a stimulus package and the House 
of Representatives responded. We passed a second one in December. We 
are now working on our third. The other body will not even let a vote 
be taken on the issue. The economic stimulus bills in the House are not 
perfect. There are things about them I did not like as an individual 
legislator. There is almost no bill here that everybody can say, ``By 
gosh, that's something that I can support a hundred percent. There's 
not a work that I would change.'' It is not the nature of this body, 
but we moved the bills forward. We moved the process along for a good 
reason.
  Since September 11, over 1 million Americans have lost their jobs. We 
have over 1 million families who are worried about where the next 
paycheck will come from. All of those families are worried about their 
health insurance. What if they do not get another job before that COBRA 
runs out? What happens if the unemployment benefits run out? What 
happens if we do not get back to growing jobs in this country? Those 
families are hurting and we need to help them. Last year we passed an 
economic stimulus bill in the House that provided 13 weeks of extended 
benefits to those who have lost their jobs, and today we will again 
pass another stimulus bill with that exact same measure.
  What do we want to see in an economic stimulus bill? Certainly first 
and foremost, we need to create capital to create jobs. Most of the 
jobs created in this country are created by small business. That means 
we have to include provisions like accelerated depreciation in the 
stimulus bill. As a former small business owner I was always amazed 
when I did my books at the end of the year, figuring out what my profit 
or loss was and how much corporate tax I had to pay. One year I bought 
new computers for my entire office, costing me about $20,000 to $30,000 
for the new computer system. Under section 179, I was only able to 
claim $10,000, even though I paid that business expense., That did not 
seem right, or fair and it certainly discouraged me from getting 
$35,000 worth of computers at one time. Certainly one of the things we 
need to do for small business is to raise those limits so that a small 
business looking at buying equipment, going and doing some 
construction, or expanding their computer setup, can do so. This will 
stimulate our economy and create jobs.
  The second thing we are going to need to do is extend health care 
benefits and unemployment benefits so that people who have lost their 
jobs due to the slowdown in the economy can make it through. All of us 
know neighbors who are worried about losing their job sometime this 
year and all of us are willing to say, ``Look, we're going to help you 
over the hump. We're going to make sure that this awful time for you is 
not made worse because you can't feed your family or that you lost your 
health insurance.'' So, we must have health care coverage and 
unemployment insurance extenders in any economic stimulus bill.
  The third thing our economic stimulus bill has to do is restore 
consumer confidence. About two-thirds of the American economy comes 
from consumer spending. We need to continue to restore confidence in 
the public so that we do not have a further collapse in retail sales. 
We have to restore faith in consumers and in the markets. If you talk 
to people about their retirement plans, most Americans now have 401(k)s 
or IRAs or pension plans. We are now investors in the stock market. One 
hundred million Americans own stocks, mostly in IRAs and 401(k)s, 
pension plans through work of Thrift Savings accounts. All of us have 
seen the value of our retirement savings go way down because of the 
economic slowdown. We need to reestablish confidence in the stock 
market, turn our economy around, and get back to creating jobs.
  Ms. SCHAKOWSKY. Mr. Speaker, I rise to express my deep disappointment 
in the bill before us today.
  Today, we had the opportunity to follow the lead of the Senate by 
passing a 13-week extension for Americans who have been unable to find 
work but whose unemployment benefits have run out. I have received 
many, many letters from constituents who are concerned about losing 
their homes, paying for their health bills, and buying food for their 
children. Today, we had the opportunity to help them by passing the 
Senate provision and sending it to the President's desk. Instead, the 
Republican leadership chose to play politics with the lives of 
unemployed persons and their families, once again putting forth a bill 
that they know cannot be enacted into law.
  In the last quarter of 2001, nearly 860,000 unemployed men and women 
exhausted their unemployment benefits. In December alone unemployment 
benefits ran out for 300,000 workers. In my State of Illinois, 42,299 
workers exhausted their benefits in the last 3 months of last year--an 
increase of 88 percent from the previous year. Faced with serious 
fiscal pressures, no state has stepped forward to extend assistance as 
they have in the past. Hundreds of thousands of Americans are now 
struggling to pay their bills as they look for work in the middle of a 
recession.
  I believe that we need a real economic stimulus plan and that we can 
do a great deal more than we're doing to create jobs and prevent 
additional layoffs. We should be providing assistance to States, 
funding the construction and repair of housing and schools, expanding 
transportation options, and investing in clean water projects. We 
should be assisting laid-off workers and their families and obtaining 
affordable health coverage through COBRA and Medicaid.
  My colleagues on the other side of the aisle don't agree with those 
job stimulus proposals. They would rather give money to the wealthy and 
mega-corporations than invest in targeted and proven job creation 
initiatives. They would rather provide unemployed men and women with an 
insufficient tax voucher than guarantee health coverage through 
Medicaid.
  We disagree on those questions and it will take time to resolve them. 
In the meantime, we should take a simple action today. We should pass a 
13-week benefits extension that will provide immediate relief to over 1 
million workers.
  We could take that step. Sadly for this institution and tragically 
for those workers, the House leadership has decided it would rather 
make a political point than make a difference in people's lives.

[[Page H505]]

  Mr. SMITH of New Jersey. Mr. Speaker, it is with great pride and 
pleasure that I rise to urge the enactment of H.R. 622, The Economic 
Security and Worker Assistance Act of 2002, also known as the Hope for 
Children Act.
  I cannot overemphasize how proud I am to be an original cosponsor of 
the Hope for Children Act. Mr. DeMint deserves our thanks and praise 
for his work on this bill.
  Mr. Speaker, throughout my 21 years in Congress, I have worked 
tirelessly with a broad, bipartisan group of colleagues, to protect 
children. Encouraging adoption has been among our primary concerns. 
Along those ends, I have introduced my own legislation that designated 
National Adoption Week, and I worked to help establish the current 
$5,000 tax credit for adopting parents. The $5,000 tax credit, which 
was incorporated into the ``Contract with America,'' passed by 
Congress, and later signed into law, is helping many families that have 
adopted a child.
  But there is still so much to be done. There are so many children 
that need to be adopted. There are so many infertile couples who 
desperately want to raise children. This legislation today is needed. 
H.R. 622 seeks to double the adoption tax credit to $10,000 for all 
adoptions and double the employer adoption assistance exclusion to 
$10,000. The legislation also increases the income cap at which the 
credit begins to phase out from $75,000 to $150,000.
  The fact of the matter is that adoptions are very costly, ranging 
from $8,000 to $30,000 per year. There are many families who would like 
to open their home to a child, but are prevented or delayed on doing so 
by the high cost of adoption. H.R. 622 helps to ease this financial 
burden to ensure that children quickly find a permanent, loving home--
so that no child is left behind to end up in the foster care system 
permanently.
  The empirical evidence shows conclusively that the tax credit must be 
increased. Just take a look at the tax return data. According to the 
Committee report accompanying this bill, half of the taxpayers who 
received income tax benefits for adoption expenses in 1998 reported 
expenses in excess of $5,000, while 25 percent of taxpayers receiving 
tax benefits for adoption reported expenses totaling more than $10,000.
  It is important to note that the $5,000 tax credit expires this year 
and the current $5,000 employer adoption assistance exclusion also 
expires--it is vital that we enact this important legislation to help 
defray these costs.
  The Hope for Children Act is a solid start to ensuring that more 
children find a loving home. While some adoptions will cost well over 
$10,000--the data suggests that as many as 25 percent of all adoptions 
fall into this category--raising the limit will aid more families in 
their efforts to adopt a child in need. If the President signs the Hope 
for Children Act into law this year, families could claim the $10,000 
tax credit beginning with their 2003 tax returns.
  One final note. Virtually every well-conducted social research study 
that has examined the impact of adoption on a child concludes that 
adoption is far more preferable than state custody. The adoption of a 
child into a traditional two-parent, man and woman family, has 
profoundly positive social consequences for both the child, as well as 
for our society. A recent Heritage Foundation analysis of the adoption 
research literature shows that adopted children raised in a two-parent 
family, measure as well as, if not better than, a biological child on 
virtually every social, educational, and health indicator assessed.
  The route by which the Hope for Children Act has arrived here in the 
House again deserves some discussion. On May 17, 2001, this bill was 
agreed to by a vote of 420-0. On February 6, 2002, the Senate passed 
the measure with an amendment to add tax relief and economic stimulus 
language. Today we are adding some additional tax relief provisions, so 
that unemployment insurance benefits will be extended to all displaced 
workers regardless of how their job losses occurred.
  New Jersey's economy was hit very hard by terrorism. First we lost 
approximately 700 New Jerseyans on September 11, including nearly 50 
from my own Fourth District. In addition to the unbearable loss of 
life, there were tens of thousands of jobs held by people from New 
Jersey that disappeared into the great cloud of fire, smoke, and ash of 
the collapsing Twin Towers. Entire businesses and departments were 
wiped out in an instant.
  Before the shock waves of September 11, had even faded, New Jersey 
was plunged into another unprecedented crisis, as the first major 
biological weapons attack in U.S. history took place on New Jersey 
soil. Our mail system ground to a halt. Items frozen in the mail 
included everything from an engagement ring to credit card bills. 
Thousands of lives were turned upside down. Another wave of jobs were 
lost. To this day, the John K. Rafferty Post Office in Hamilton has not 
reopened, and hundreds of postal workers who work there are now 
scattered all over the state in makeshift accommodations.
  Mr. Speaker, New Jersey's residents need a helping hand. We need this 
stimulus package. People are hurting. I think the Senate should move 
promptly and pass H.R. 622. It is time to put the interests of the 
American people ahead of partisan calculations.
  Mr. Speaker, I urge the unanimous passage of the Hope for Children 
Act.
  Ms. KILPATRICK. Mr. Speaker, once again, the Republicans are 
attempting to shove forward several tax provisions for the wealthy and 
big businesses without adequate consideration for the unemployed and 
low-income.
  This is the third time in five months that an economic stimulus 
package has been to the House floor. Not once out of the three times, 
has there been sufficient assistance in the form of health insurance 
converge and unemployment benefits for the unemployed and low-income 
families. Not once have Republican considered the long-term effect of 
the unnecessary tax cuts. Not once have they considered anything else 
but their special interests, the wealthy.
  We need a bill that will give better backing for COBRA insurance. The 
tax credit that this bill provides will do nothing for the families and 
individuals who cannot afford to pay upfront for the insurance 
packages. While Democrats have been fighting to help the jobless and 
low-wage workers, the number of those in need has grown and each 
individual has been without federal income support since March, when 
this recession officially started.
  While we stand in the midst of a recession, we have Members of 
Congress who contritely confess their sincere desire to help the 
American people, but simultaneously provide help for only approximately 
25 percent of the American people, who happen to be very wealthy. The 
rest of the nation will suffer because they are not wealthy enough or 
because they are not highly compensated executives in the corporate 
world.
  This bill follows the pattern this Congress established when it 
passed the airline bailout bill last October. We provided $15 billion 
in financial assistance to financially strapped airlines following the 
September 11th attack, but the leadership of this Chamber did nothing 
for rank-and-file workers who were laid off by the airlines. Last 
November, this Chamber bailed out the insurance industry, which covered 
the airline industry we bailed out the month before, but the leadership 
did nothing for rank-and-file workers who were laid off by the airlines 
or as a result of the economic recession.
  This bill today, like the others before, is another tax break bill 
for people who do very well in good times and bad, but it does very 
little for the people who need the most help--the jobless and low wage 
workers. Once again, this bill, like the others before, puts those most 
in need as a last priority. That's unacceptable. For that reason, I 
will vote ``no''. Mr. Speaker, we can do better than this. It's 
unfortunate that the other side of the aisle does not negotiate in good 
faith. No one saw this bill before it came to the House floor. It did 
not go through the committee process. This is a product of an 
autocratic procedure. It is put out for us to take or leave. That's it. 
I urge my colleagues to join me in rejecting this bill.
  Mr. GILMAN. Mr. Speaker, I rise today in support of H.R. 622, the 
Hope For Children Act which will increase the adoption tax credit for 
families. I am an original cosponsor of this legislation and I commend 
the gentleman from South Carolina, Mr. Demint for his leadership on 
this important issue.
  I am particularly pleased that with today's vote we will be adding a 
provision to temporarily extend unemployment compensation for an 
additional 13 weeks for individuals who have exhausted their 26 weekly 
benefits, and will provide needs assistance to New York under the 
Liberty Program.
  As our nation begins to rebound economically it is important that we 
provide American's who have been adversely affected by the events of 
September 11th and the subsequent economic downturn with the means to 
provide for their families. Representing numerous individuals affected 
by the slow down of the airline, travel, and tourism industry in New 
York, I know how important this extension will be in assisting these 
hard working individuals. This economic package is a major step to 
regaining a healthy economy. Each of the components will help us 
stimulate different areas of the economy and promote growth and jobs. 
Our economy has weathered turbulence in the past during times of war 
and times of peace. But a sound, reasoned economic growth package, such 
as the one we are working to pass, will put us on the right track back 
to prosperity.
  Accordingly, I urge my colleagues to support this important measure.
  Mr. BLUMENAUER. Mr. Speaker, on this Valentine's Day the Republican 
leadership is presenting America's largest corporations and wealthiest 
individuals with another sweetheart

[[Page H506]]

deal, while people and families in Oregon and across the nation 
continue to wait for a meaningful economic stimulus package.
  The State of Oregon continues to lead the nation in unemployment, so 
it is frustrating to see Republican proposals that continue to focus on 
people who need the Federal Government's help the least. Even more 
exasperating is the fact that these corporate tax credits and tax cuts 
will be paid by Social Security and Medicare surpluses.
  A true economic stimulus package would directly put people back to 
work and not last longer than necessary. The bill before us today is 
not an economic stimulus package, is not temporary, and does not target 
relief to businesses hurt by the recession.
  The most significant and appropriate response to help the American 
people would be accomplished by increasing funding for ready-to-go 
public works projects that will reduce unemployment, while benefiting 
communities across the country. Every state in the nation has 
transportation, water, environmental clean-up, and other infrastructure 
projects that could immediately employ people to make our communities 
safer and healthier.
  This bill is the third attempt by the Republican leadership to use a 
weakened economy as an excuse for permanent tax breaks for their 
favored few. Until a fair and sensible economic stimulus package is 
presented to the House, I must withhold my support.
  Mr. STARK. Mr. Speaker, I rise today in opposition to H.R. 622, the 
Economic Support and Worker Assistance Act.
  The Republican Majority's actions on the economic stimulus package 
are making me feel like Bill Murray in the movie, Groundhog Day. Just 
as Bill Murray had the same bad day over and over again, we keep 
getting the same bad bill over and over again. Unfortunately, for the 
millions of Americans who are unemployed, this is not a movie, but real 
life--and it is turning out to be a tragedy, rather than a comedy.
  The Senate passed legislation to extend unemployment benefits by 13 
weeks for the more than 1 million people who lost their jobs in recent 
months. We should be approving that same legislation so it can be sent 
to the President for his signature today. We are about to go into 
recess for nearly 2 weeks. If we do not send a bill to the President 
today, we will take no action for a minimum of 12 days--and during that 
time, more than 120,000 people will lose their benefits.
  Passage of a clean bill to extend unemployment benefits would give 
unemployed Americans and their families some immediate financial 
relief. Such action is supported by wide, bipartisan majorities in 
Congress, so there is no excuse for delay. Unfortunately, the House 
Republican leadership refuses to do what is right to protect America's 
workers. Instead, they insist on continually giving bigger and more 
outrageous tax cuts to their corporate friends, while millions of 
unemployed Americans are desperately trying to feed their families and 
search for new jobs.
  I urge my colleagues to vote for a 13-week extension of unemployment 
insurance benefits and to vote against tax breaks for big business and 
the wealthy. By doing otherwise on Valentine's Day, we will do more 
than break the hearts of the American people, we will break their 
banks.
  Mrs. MALONEY. Mr. Speaker, on February 6 the Senate passed a 13-week 
extension of unemployment insurance by unanimous consent. Fifty 
Democratic, 49 Republican and one Independent Senator recognized that 
while our country is at war and our economy is in a downturn it is time 
to lend a hand to individuals who are out of work. After weeks of 
attempting to pass a comprehensive stimulus the Senate came together 
and acknowledged that political differences should not prevent the 
government from helping America's most needy at this critical time.
  Unfortunately, the bill before the House today fails to follow the 
bipartisan spirit of the Senate and instead subjects people who will 
soon be without jobs and without unemployment insurance to a Washington 
political game. People out of work around the country deserve better 
treatment by Congress. The victims of today's House action are 
hardworking Americans out of work through no fault of their own. In my 
own City of New York recovery from the terrorist attack has made the 
unemployment situation particularly grim. I continually encounter 
people who are victims of economic circumstance like the woman who 
approached me last Friday on Lexington Ave and urged me as a Member of 
the House to follow the Senate's lead. This House should know that our 
constituents are watching and they can clearly see that unemployment 
insurance is falling victim to a political agenda.
  Finally, the Majority bill was crafted in the middle of the night 
last night and represents such an amalgamation of provisions that we do 
not even know hour much it will cost. The President's budget proposal 
recognizes that we are not eating into the Social Security surplus. I 
do not disagree with every provision in the bill but it is 
irresponsible to vote on a substantial tax package like this without 
knowing all of its long-term ramifications.
  Mr. DINGELL. Mr. Speaker, yet again, we are involved in a most 
curious proceeding. The Republican majority is bringing forth, for a 
third time, an economic stimulus bill that cannot be passed in the 
Senate and is being brought up only for partisan reasons. Many of my 
colleagues in the Republican leadership talk about the obstructionism 
in the Senate. I say this exercise is the height of obstructionism. The 
House Republican leadership seems intent on doing things ``my way or 
the highway.'' And each time they pass the same old bill, they keep 
millions of unemployed Americans from getting the help they need. In 
fact, by their delay, more than 11,000 workers each day exhaust their 
unemployment benefits and therefore would immediately benefit from the 
Senate's unemployment extension.
  But the Republican leadership will not allow a vote on any other bill 
than their own. We can't even vote for the stimulus amendment on 
unemployment assistance that passed the Senate by voice vote. That is 
neither bipartisan nor responsible. In fact, at no time have my 
Republican colleagues reached out to me or other Democrats to work on 
an economic stimulus bill. At the one and only meeting we had on the 
stimulus health pieces in which the Republican leadership allowed 
Members to show up, we were told that they had to ``just say no'' to 
anything we had to discuss. That too is neither bipartisan nor 
responsible.
  So, here I am again, for the third time, telling you why this is a 
bad bill. The Republican leadership bill is supposed to provide 
immediate stimulus. So why do many of the tax provisions cost billions 
after 2002, in years when the economy is expected to be in recovery and 
stimulus is no longer needed? And why does this bill provide no 
meaningful immediate help for the millions of Americans without work 
and without health insurance coverage?
  For example, why can't we truly held laid-off workers continue COBRA 
coverage? The Republicans promise assistance for workers to continue 
coverage under COBRA. But, the 60 percent tax credit is inadequate to 
allow families to afford coverage; millions of workers would not even 
be eligible because of restrictive definitions; and the Republican 
leadership program sets the stage for complete gutting of the employer-
sponsored insurance--something Republicans have long tried to do. This 
tax credit is even more meaningless for workers who don't quality for 
COBRA, as they tend to be working in lower paying jobs and would find 
it even more difficult to afford coverage, particularly in the 
indivdual market where in most instances there are no protections on 
cost or availability of coverage.
  Also, why can't we help laid-off workers who are not eligible for 
COBRA coverage? Presented with an option of building on a program, 
Medicaid, that already provides guaranteed, affordable health insurance 
coverage for nearly 44 million Americans and a program that currently 
does not provides health insurance to anyone, Republicans chose the 
program that has no experience providing coverage. Worse yet, they 
don't even guarantee any of the money would be used for health care. 
And, in attempt to counter some of our arguments, they provide funding 
to state high-risk pools, presumably to give people a place to spend 
their ``meaningless'' tax credits. Unfortunately, they are a day late 
and a dollar short: $40 million won't even cover 50% of these pools' 
costs for the two years it is available.
  Had we had a chance to offer a substitute, the Democrats would have 
offered something that truly helps laid-off workers. The Democratic 
proposal would reach 5.1 million Americans. The Democratic proposal 
would provide additional financial assistance to states to help them 
meet the increases in Medicaid enrollment as a result of the economic 
downturn. As millions join the ranks of the uninsured, we need to 
ensure states preserve, not limit, eligibility for coverage.
  The Democratic proposal would shore up health care providers as well. 
Providers are being hard hit by the economic downturn. The Democratic 
proposal would prevent physicians from taking a 5.4 percent reduction 
in their Medicare payments this coming year. It also includes 
bipartisan legislation to reduce regulatory obstacles in the Medicare 
program for providers. Both of these proposals should make it easier 
for providers to weather the economic downturn and continue providing 
quality care to seniors.
  But the Republican leadership has barred votes on any alternative 
proposals today. What are they afraid of? We want to put choices before 
the American public--they do not. We want to help displaced workers and 
shore up the health system to weather the economic downturn--they do 
not. We want to provide targeted, responsible stimulus--they do not.
  This Republican process is an outrage, serving only to obstruct help 
for unemployed Americans.

[[Page H507]]

  Mr. UNDERWOOD. Mr. Speaker, while we debate today's latest House 
Republican economic stimulus proposal, I would like to once again speak 
up on behalf of my home district of Guam and the U.S. territories, all 
of which have been experiencing double digit unemployment rates and 
have seen a down-turn in our tourism-dependent economies.
  I am grateful for the assistance of Representative John Boehner, 
Chairman of the House Education and Workforce Committee, for ensuring 
that the territories are eligible under the National Emergency Grants 
provision of the Republican stimulus bill. However, I was hoping that 
the Government of Guam would be provided economic relief for individual 
tax rebates and to see increases for Medicaid funding that we have 
sought, and that were included in Democratic proposals.
  The bill before us today does nothing for the territories, especially 
for Guam. In fact, it may hurt. It provides more tax cuts which are 
reflected in Guam through a ``mirror tax code.'' This has the effect of 
reducing local revenues at a time when Government of Guam leaders are 
exploring the possibility of cutting worker salaries by 10 percent. It 
ignores our plight because we are not included in the additional 13 
weeks of unemployment insurance. We should assist people who truly need 
help and local governments who are suffering through the most difficult 
times in the nation.
  After all is said or done between the various competing proposals, 
however, it is clear to me that the territories will not be provided 
with the economic relief necessary, and that a targeted insular areas 
economic relief package is direly needed. Unlike the rest of the 
country, we in the territories have been struggling economically for 
the last few years. Prior to the September 11 attacks, Guam's economy, 
alone, was already struggling as a result of the Asian economic crisis. 
For the last 3 years, Guam's unemployment rate has averaged over 15 
percent. This rate is three times the national average.
  Over the last several months, I have been in discussion with other 
territorial delegates, Administration officials, Congressional leaders 
from the Ways and Means and Resources Committees, and local political 
and business leaders in the territories, on the need for an insular 
areas economic relief package.
  Legislative items which should be considered include:
  Increasing the waiver of local matching requirements for the 
territories;
  Ensuring that the territories are included in the National Emergency 
Grants Program;
  Lifting the cap on Medicaid funding for the territories or increasing 
the level of Medicaid funding;
  Establishing empowerment zones in the territories;
  Extending the supplement grant for population increases and 
contingency fund for welfare programs to the territories;
  Providing unemployment assistance to the smaller territories from 
FEMA's Disaster Unemployment Assistance Program;
  Extending supplemental security income benefits to Guam and the 
Virgin Islands;
  Providing Federal guaranteed bonds for infrastructure projects in the 
territories; and
  Generating increased GovGuam revenues with military personnel on 
temporary duty on Guam.
  I look forward to working with my colleagues on ways to provide 
economic relief to the U.S. territories.
  Mr. UDALL of Colorado. Mr. Speaker, I think today's action on the 
House floor is exactly the kind of thing that makes people cynical 
about Congress and the political process.
  As our businesses are struggling to recover from recession, 
unemployment insurance is running out for thousands of people who have 
lost their jobs. Extending those benefits is something they need and 
something that will help the economy because it will enable them to 
continue paying their bills.
  Those are the facts. There should be no partisan disagreement about 
them--which is why the Senate unanimously approved the bill before us, 
which would extend those benefits for 13 weeks.
  And there should be no disagreement about what we should be doing 
today as we prepare to adjourn and leave town for more than a week. We 
should be passing that bill--the bill supported by every Senator, 
regardless of party--and sending it to the President so he can sign it 
into law.
  But we aren't doing that. Instead, the Republicans leadership is 
insisting on holding that bill hostage--which means holding hostage 
everyone who need the extension of unemployment coverage--by sending it 
back to the Senate loaded down with a bulging grab bag of other 
legislation that the House has already passed before.
  No wonder people are cynical about Congress.
  Mr. Speaker, I am not saying that none of the things in this 
legislative package is any good. As a matter of fact, there are a 
number of items that I support. For example, I strongly support the 
extension of the clean-energy production credits and the work-
opportunity credit. I also support a number of provisions to give tax 
relief to small businesses and to shorten the period for depreciating 
leasehold improvements. And I definitely think we need to change the 
way the alternative minimum tax is applied to individuals.
  But all those provisions were already included in legislation that 
the House passed last year. There is no need to hijack this bill--a 
bill to provide urgently-needed help to thousands of Americans--to get 
them to the Senate, because they are already there.
  I understand that the Republican leadership here in the House wants 
the Senate to act on a stimulus bill--and I agree that a sound stimulus 
bill would be good for the economy and good for the country. But I 
cannot agree to their strategy. I cannot agree to holding hard-pressed 
Americans hostage to try to coerce our colleagues in the other body. 
So, I cannot support this motion.
  Mr. BOEHNER. Mr. Speaker, I rise in strong support of this economic 
stimulus package. In particular, I'd like to highlight the part of this 
bill that addresses the needs of working Americans and their families.
  I'd also like to thank Sam Johnson of Texas and Buck McKeon of 
California, who helped craft the National Emergency Grant provisions, 
which we originally introduced as part of the ``Back-to-Work Act'' to 
respond to the needs of displaced workers.
  As everyone knows, the September 11 terrorist attacks precipitated a 
downturn in our economy, and thousands of workers are now jobless. The 
proposal before us will help every worker return to work as quickly as 
possible--and in the meantime, that they and their families have access 
to quality health insurance as well as employment and job training 
resources.
  Last year, the Labor Department acted decisively to mobilize the 
existing safety net for displaced workers and their families. And 
Secretary Elaine Chao testified before my committee on how Congress can 
work with the Administration to further strengthen the safety net for 
these workers--which is what this worker relief package would do.
  As Secretary Chao said, and I quote, ``This Administration is 
committed to going even further than current programs allow to help 
families, industries and regions that have been hardest-hit by the 
terrorist attacks and their aftermath. Workers need help regardless of 
what industry they work in--not just a chosen few. The President's plan 
gets money to wherever people are hurting.''
  The proposal before us is one that can be implemented quickly, 
flexibly, and without creating new bureaucracy. It's designed to do 
three things: (1) help those who have lost their jobs because of the 
economic downturn; (2) put people back to work to help get the economy 
moving again; and (3) ensure that displaced workers have access to 
health care.
  Specifically, this bill would expand the National Emergency Grant 
program and authorize and appropriate $3.9 billion to help dislocated 
workers. Under the bill, grants may be used by states to help ensure 
that dislocated workers: (1) maintain health insurance coverage; (2) 
receive some form of income support during the recovery period; and (3) 
return to work as quickly as possible with the help of employment 
training and job search assistance.
  Mr. Speaker, this proposal is a compassionate one--not just because 
it provides workers in need with flexibility and resources, but because 
it recognizes that a displaced worker's true goal, ultimately, is to 
return to work. A government program can help a worker survive. But 
until a worker returns to work, no economic recovery is complete.
  On behalf of our nation's workers, I urge my colleagues to vote 
``yes'' on this economic stimulus package.
  Mrs. McCARTHY of New York. Mr. Speaker, today, the House of 
Representatives will vote on another stimulus package that comes closer 
to the immediate needs of the country. We are all facing a sagging 
economy, escalating unemployment levels, and close to my home on Long 
Island, our concerns also include reconstruction efforts. Although this 
bill does not include everything I would have preferred, it is an 
improvement from the previous versions I opposed.
  Although I support the provision extending unemployment benefits for 
an additional 13 weeks, this bill neglects the immediate unemployed 
health insurance needs of displaced workers. This bill provides a 
temporary tax credit equal to 60 percent of the cost of health 
insurance purchased by unemployed workers. This is a step in the right 
direction, but displaced workers need health insurance assistance now; 
not when they file their taxes next year.
  New York is in dire straights because of the September 11 attacks. 
The sudden spike in unemployment levels has placed an enormous strain 
on unemployment rolls and other assistance programs. I was pleased the 
bill included $3.9 billion in national emergency grants to states for 
health care and reemployment assistance for displaced workers, as well 
as an

[[Page H508]]

additional $4.6 billion for health care expenses.
  In addition, this measure includes a number of temporary tax 
provisions for reconstruction incentives to businesses located in the 
New York Liberty Zone surrounding the World Trade Center. Among these 
provisions includes $8 billion in tax-exempt bonds over the next three 
years for reconstruction in the areas of New York City damaged by the 
September 11 attacks. Also included are several measures intended to 
attract businesses back to New York City.
  Nonetheless, I am disturbed over the procedural games this bill must 
endure. We had an opportunity to pass a Senate cleared unemployment 
extension measure on its merits which would have passed the House and 
been sent to the president. Unfortunately, several tax provisions were 
added to the bill, essentially making it impossible to pass the Senate.
  Since September 11th, more than one million have seen their 
unemployment benefits expire. Another two million workers will exhaust 
their benefits over the next 6 months. Yet we continue to play partisan 
and procedural games holding the unemployed hostage. It's unfortunate 
that some of the positive measures of this bill will never see the 
president's desk.
  America needs an economic stimulus package that prioritizes the needs 
of this country during this difficult time. Therefore we must address 
the needs of our workers as well as providing our businesses with 
stimulating tax cuts that provide the temporary relief they need. 
However, this will never be achieved if the same procedural games are 
played.
  Ms. BALDWIN. Mr. Speaker, this past Tuesday the State of Wisconsin 
did something no other state has done, and something this chamber has 
failed to do. Wisconsin did what was right and decided to help 
unemployed workers by extending their unemployment insurance benefits 
for an additional 8 weeks. They did it without playing political games 
or attaching controversial measures intended to score political points 
but not help America's workers.
  Only a few short days after September 11, Congress quickly rushed to 
rescue the airline industry and provided a $15 billion package. This 
package provided airline executives with a guarantee that their million 
dollar salaries were safe, but included no provisions that helped the 
thousands of airline workers who were being laid off at an alarming 
pace.
  The economic downturn, combined with the terrorist attacks, has 
caused many people to lose their jobs. Our unemployment is at its 
highest rate in about a decade. Yet, the House passed an economic 
stimulus bill that included millions of dollars is special tax breaks 
for big corporations, including Enron, but left behind those who needed 
financial help the most--Americans who have lost their jobs.
  I applaud the State of Wisconsin for providing unemployed workers 
financial help for an additional 2 months while they look for a job. 
That means the people of Wisconsin will also have another 2 months to 
make their car payment, pay their house mortgage, and feed their 
families. I believe we must extend this assistance to all out-of-work 
Americans. It is our responsibility, our duty, to make sure that all 
unemployed or displaced workers have their benefits extended.
  Today, this House had an opportunity to pass a bill that would have 
extended unemployment benefits to unemployed workers and gotten a 
prompt signature from the President. Sadly, tying unemployment benefits 
to another so-called economic stimulus bill will cause it to meet the 
fate of the previous 2 bills this House passed--it will go nowhere. We 
should follow Wisconsin's example and pass legislation that extends 
unemployment insurance benefits for at least another 13 weeks in a 
stand-alone bill. To do so otherwise is to turn our backs on the 
American people.
  The SPEAKER pro tempore (Mr. LaTourette). All time for debate has 
expired.
  Pursuant to House Resolution 347, the previous question is ordered.


                        Parliamentary Inquiries

  Mr. RANGEL. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman may state his inquiry.
  Mr. RANGEL. Mr. Speaker, what would be the appropriate time for me to 
move that we concur with the Senate amendment to extend the 
unemployment compensation?
  The SPEAKER pro tempore. The previous question is ordered on this 
motion to final adoption without intervening motion so there is no 
opportunity at this time.
  Mr. RANGEL. Mr. Speaker, I have an additional parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. RANGEL. Will the minority have an opportunity to offer a 
substitute to the majority position?
  The SPEAKER pro tempore. There is no such opportunity. The previous 
question is ordered to final adoption.
  Mr. RANGEL. Mr. Speaker, my further and last parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. RANGEL. Does the minority have an opportunity to make a motion to 
recommit the majority's rule?
  The SPEAKER pro tempore. The previous question is ordered to final 
adoption without intervening motion. The answer is no.
  The question is on the motion offered by the gentleman from 
California (Mr. Thomas).
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. PORTMAN. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 225, 
nays 199, not voting 11, as follows:

                             [Roll No. 38]

                               YEAS--225

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Harman
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Israel
     Issa
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCarthy (NY)
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shows
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--199

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel

[[Page H509]]


     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--11

     Berman
     Brady (TX)
     Miller, Dan
     Payne
     Riley
     Roukema
     Stenholm
     Stump
     Taylor (NC)
     Traficant
     Weldon (PA)

                              {time}  1417

  So the motion was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________