[Congressional Record (Bound Edition), Volume 147 (2001), Part 20]
[House]
[Pages 27473-27535]
[From the U.S. Government Publishing Office, www.gpo.gov]



          ECONOMIC SECURITY AND WORKER ASSISTANCE ACT OF 2001

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 320, I call up 
the bill (H.R. 3529) to provide tax incentives for economic recovery 
and assistance to displaced workers, and ask for its immediate 
consideration.
  The Clerk read the title of the bill.
  The text of H.R. 3529 is as follows:

                               H.R. 3529

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Economic 
     Security and Worker Assistance Act of 2001''.
       (b) References to Internal Revenue Code of 1986.--Except as 
     otherwise expressly provided, whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of the Internal Revenue Code of 1986.
       (c) Table of Contents.--

Sec. 1. Short title; etc.

                     TITLE I--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 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 BENEFITS FOR AREA OF NEW YORK CITY DAMAGED IN TERRORIST 
                     ATTACKS ON SEPTEMBER 11, 2001

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

     TITLE V--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS, 
     PRESIDENTIALLY DECLARED DISASTERS, AND CERTAIN OTHER DISASTERS

     Subtitle A--Relief Provisions for Victims of Terrorist Attacks

Sec. 501. Income taxes of victims of terrorist attacks.
Sec. 502. Exclusion of certain death benefits.
Sec. 503. Estate tax reduction.
Sec. 504. Payments by charitable organizations treated as exempt 
              payments.
Sec. 505. Exclusion of certain cancellations of indebtedness.

                  Subtitle B--Other Relief Provisions

Sec. 511. Exclusion for disaster relief payments.
Sec. 512. Authority to postpone certain deadlines and required actions.
Sec. 513. Application of certain provisions to terroristic or military 
              actions.
Sec. 514. Clarification of due date for airline excise tax deposits.
Sec. 515. Treatment of certain structured settlement payments.
Sec. 516. Personal exemption deduction for certain disability trusts.
Sec. 517. Disclosure of tax information in terrorism and national 
              security investigations.

            TITLE VI--MISCELLANEOUS AND TECHNICAL PROVISIONS

              Subtitle A--General Miscellaneous Provisions

Sec. 601. Allowance of electronic 1099's.
Sec. 602. Excluded cancellation of indebtedness income of S corporation 
              not to result in adjustment to basis of stock of 
              shareholders.
Sec. 603. Limitation on use of nonaccrual experience method of 
              accounting.
Sec. 604. Exclusion for foster care payments to apply to payments by 
              qualified placement agencies.
Sec. 605. Interest rate range for additional funding requirements.
Sec. 606. Adjusted gross income determined by taking into account 
              certain expenses of elementary and secondary school 
              teachers.

                   Subtitle B--Technical Corrections

Sec. 611. Amendments related to Economic Growth and Tax Relief 
              Reconciliation Act of 2001.
Sec. 612. Amendments related to Community Renewal Tax Relief Act of 
              2000.
Sec. 613. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 614. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 615. Amendment related to the Balanced Budget Act of 1997.
Sec. 616. Other technical corrections.
Sec. 617. Clerical amendments.
Sec. 618. Additional corrections.

                   TITLE VII--UNEMPLOYMENT ASSISTANCE

Sec. 701. Short title.
Sec. 702. Federal-State agreements.
Sec. 703. Temporary extended unemployment compensation account.
Sec. 704. Payments to States having agreements for the payment of 
              temporary extended unemployment compensation.
Sec. 705. Financing provisions.
Sec. 706. Fraud and overpayments.
Sec. 707. Definitions.
Sec. 708. Applicability.
Sec. 709. Special Reed Act transfer in fiscal year 2002.

          TITLE VIII--DISPLACED WORKER HEALTH INSURANCE CREDIT

Sec. 801. Displaced worker health insurance credit.
Sec. 802. Advance payment of displaced worker health insurance credit.

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

Sec. 901. Employment and training assistance and temporary health care 
              coverage assistance.

            TITLE X--TEMPORARY STATE HEALTH CARE ASSISTANCE

Sec. 1001. Temporary State health care assistance.

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

Sec. 1101. No impact on social security trust funds.
Sec. 1102. 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.''

[[Page 27474]]

       (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)''.
       (3) Paragraph (3) of section 6428(e) is amended by 
     inserting before the period ``(or, if earlier, the date of 
     the enactment of the Economic Security and Worker Assistance 
     Act of 2001)''.
       (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.

                     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.............................................$35,000 
      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:

[[Page 27475]]

       ``(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 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 take effect on the date of the enactment of this Act.

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

       (a) In General.--Subparagraphs (A), (B), and (C) of section 
     45(c)(3) are each amended by striking ``2002'' and inserting 
     ``2004''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     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''.

[[Page 27476]]

       (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 take effect on the date of the enactment of this Act.

     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 take effect on 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 take effect on the date of the enactment of this Act.

     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 1, 
     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.

     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 the date of the enactment of this Act.

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

     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) 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 (other than railroad 
     grading and tunnel bores), 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) 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

[[Page 27477]]

     nonresidential real property and residential rental 
     property).
       ``(B) 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.
       ``(C) Special rules.--
       ``(i) Self-constructed property.--In the case of a taxpayer 
     manufacturing, constructing, or producing property for the 
     taxpayer's own use, the requirements of clause (iv) of 
     subparagraph (A) shall be treated as met if the taxpayer 
     begins manufacturing, constructing, or producing the property 
     after September 10, 2001, and before the termination date.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(iii), if property--

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

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in subclause (II).
       ``(D) Allowance against alternative minimum tax.--The 
     deduction allowed by this subsection shall be allowed in 
     determining alternative minimum taxable income under section 
     55.
       ``(b) 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.
       ``(c) 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) 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.
       ``(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 of New York designates such bond for 
     purposes of this section, and
       ``(D) such bond is issued during calendar year 2002, 2003, 
     or 2004.
       ``(3) Limitation on amount of bonds designated.--
       ``(A) Aggregate amount designated.--The maximum aggregate 
     face amount of bonds which may be designated under this 
     subsection shall not exceed $15,000,000,000.
       ``(B) Specific limits.--For purposes of subparagraph (A), 
     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 $7,000,000,000,
       ``(ii) costs for residential rental property, shall not 
     exceed $3,000,000,000, and
       ``(iii) costs for property used for retail sales of 
     tangible property, shall not exceed $1,500,000,000.
       ``(C) Movable fixtures and equipment.--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 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(c) (relating to limitation on use for 
     land acquisition) shall be determined by reference to the 
     aggregate authorized face amount of all qualified New York 
     Liberty Bonds rather than the net proceeds of each issue.
       ``(C) 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.
       ``(D) Section 148(f)(4)(C) (relating to exception from 
     rebate for certain proceeds to be used to finance 
     construction expenditures) shall apply to available 
     construction proceeds of bonds issued under this section.
       ``(E) Financing provided by such a bond shall not be taken 
     into account under section 168(g)(5)(A) with respect to 
     property 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.
       ``(F) Repayments of principal on financing provided by the 
     issue--
       ``(i) may not be used to provide financing, and
       ``(ii) must be used not later than the close of the 1st 
     semiannual period beginning after the date of the repayment 
     to redeem bonds which are part of such issue.
     The requirement of clause (ii) shall be treated as met with 
     respect to amounts received within 10 years after the date of 
     issuance of the issue (or, in the case of refunding bond, the 
     date of issuance of the original bond) if such amounts are 
     used by the close of such 10 years to redeem bonds which are 
     part of such issue.
       ``(G) 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, if the issuer elects to so treat such portion.
       ``(e) 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.
       ``(f) New York Liberty Zone.--For purposes of this section, 
     the term `New York Liberty Zone' means the area located on or 
     south of Canal Street, East Broadway (east of its 
     intersection with Canal Street), or Grand Street (east of its 
     intersection with East Broadway) in the Borough of Manhattan 
     in the City of New York, New York.''
       (b) 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.''

[[Page 27478]]



     TITLE V--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS, 
     PRESIDENTIALLY DECLARED DISASTERS, AND CERTAIN OTHER DISASTERS

     Subtitle A--Relief Provisions for Victims of Terrorist Attacks

     SEC. 501. INCOME TAXES OF VICTIMS OF TERRORIST ATTACKS.

       (a) In General.--Section 692 (relating to income taxes of 
     members of Armed Forces on death) is amended by adding at the 
     end the following new subsection:
       ``(d) Individuals Dying as a Result of Certain Attacks.--
       ``(1) In general.--In the case of a specified terrorist 
     victim, any tax imposed by this chapter shall not apply--
       ``(A) with respect to the taxable year in which falls the 
     date of death, and
       ``(B) with respect to any prior taxable year in the period 
     beginning with the last taxable year ending before the 
     taxable year in which the wounds, injury, or illness referred 
     to in paragraph (3) were incurred.
       ``(2) $10,000 minimum benefit.--If, but for this paragraph, 
     the amount of tax not imposed by paragraph (1) with respect 
     to a specified terrorist victim is less than $10,000, then 
     such victim shall be treated as having made a payment against 
     the tax imposed by this chapter for such victim's last 
     taxable year in an amount equal to the excess of $10,000 over 
     the amount of tax not so imposed.
       ``(3) Taxation of certain benefits.--Subject to such rules 
     as the Secretary may prescribe, paragraph (1) shall not apply 
     to the amount of any tax imposed by this chapter which would 
     be computed by only taking into account the items of income, 
     gain, or other amounts attributable to--
       ``(A) deferred compensation which would have been payable 
     after death if the individual had died other than as a 
     specified terrorist victim, or
       ``(B) amounts payable in the taxable year which would not 
     have been payable in such taxable year but for an action 
     taken after September 11, 2001.
       ``(4) Specified terrorist victim.--For purposes of this 
     subsection, the term `specified terrorist victim' means any 
     decedent--
       ``(A) who dies as a result of wounds or injury incurred as 
     a result of the terrorist attacks against the United States 
     on April 19, 1995, or September 11, 2001, or
       ``(B) who dies as a result of illness incurred as a result 
     of an attack involving anthrax occurring on or after 
     September 11, 2001, and before January 1, 2002.
     Such term shall not include any individual identified by the 
     Attorney General to have been a participant or conspirator in 
     any such attack or a representative of such an individual.''.
       (b) Conforming Amendments.--
       (1) Section 5(b)(1) is amended by inserting ``and victims 
     of certain terrorist attacks'' before ``on death''.
       (2) Section 6013(f)(2)(B) is amended by inserting ``and 
     victims of certain terrorist attacks'' before ``on death''.
       (c) Clerical Amendments.--
       (1) The heading of section 692 is amended to read as 
     follows:

     ``SEC. 692. INCOME TAXES OF MEMBERS OF ARMED FORCES AND 
                   VICTIMS OF CERTAIN TERRORIST ATTACKS ON 
                   DEATH.''.

       (2) The item relating to section 692 in the table of 
     sections for part II of subchapter J of chapter 1 is amended 
     to read as follows:

``Sec. 692. Income taxes of members of Armed Forces and victims of 
              certain terrorist attacks on death.''.
       (d) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 502. EXCLUSION OF CERTAIN DEATH BENEFITS.

       (a) In General.--Section 101 (relating to certain death 
     benefits) is amended by adding at the end the following new 
     subsection:
       ``(i) Certain Employee Death Benefits Payable by Reason of 
     Death of Certain Terrorist Victims.--
       ``(1) In general.--Gross income does not include amounts 
     (whether in a single sum or otherwise) paid by an employer by 
     reason of the death of an employee who is a specified 
     terrorist victim (as defined in section 692(d)(4)).
       ``(2) Limitation.--
       ``(A) In general.--Subject to such rules as the Secretary 
     may prescribe, paragraph (1) shall not apply to amounts which 
     would have been payable after death if the individual had 
     died other than as a specified terrorist victim (as so 
     defined).
       ``(B) Exception.--Subparagraph (A) shall not apply to 
     incidental death benefits paid from a plan described in 
     section 401(a) and exempt from tax under section 501(a).
       ``(3) Treatment of self-employed individuals.--For purposes 
     of paragraph (1), the term `employee' includes a self-
     employed individual (as defined in section 401(c)(1)).''.
       (b) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendment made by this section 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 503. ESTATE TAX REDUCTION.

       (a) In General.--Section 2201 is amended to read as 
     follows:

     ``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE 
                   ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN 
                   TERRORIST ATTACKS.

       ``(a) In General.--Unless the executor elects not to have 
     this section apply, in applying sections 2001 and 2101 to the 
     estate of a qualified decedent, the rate schedule set forth 
     in subsection (c) shall be deemed to be the rate schedule set 
     forth in section 2001(c).
       ``(b) Qualified Decedent.--For purposes of this section, 
     the term `qualified decedent' means--
       ``(1) any citizen or resident of the United States dying 
     while in active service of the Armed Forces of the United 
     States, if such decedent--
       ``(A) was killed in action while serving in a combat zone, 
     as determined under section 112(c), or
       ``(B) died as a result of wounds, disease, or injury 
     suffered while serving in a combat zone (as determined under 
     section 112(c)), and while in the line of duty, by reason of 
     a hazard to which such decedent was subjected as an incident 
     of such service, and
       ``(2) any specified terrorist victim (as defined in section 
     692(d)(4)).
       ``(c) Rate Schedule.--

``If the amount with respect to which the tentative tax to be computed 
The tentative tax is:
1 percent of the amount by which such amount exceeds $100,000..........
$500 plus 2 percent of the excess over $150,000........................
$1,500 plus 3 percent of the excess over $200,000......................
$4,500 plus 4 percent of the excess over $300,000......................
$12,500 plus 5 percent of the excess over $500,000.....................
$22,500 plus 6 percent of the excess over $700,000.....................
$34,500 plus 7 percent of the excess over $900,000.....................
$48,500 plus 8 percent of the excess over $1,100,000...................
$88,500 plus 9 percent of the excess over $1,600,000...................
$133,500 plus 10 percent of the excess over $2,100,000.................
$183,500 plus 11 percent of the excess over $2,600,000.................
$238,500 plus 12 percent of the excess over $3,100,000.................
$298,500 plus 13 percent of the excess over $3,600,000.................
$363,500 plus 14 percent of the excess over $4,100,000.................
$503,500 plus 15 percent of the excess over $5,100,000.................
$653,500 plus 16 percent of the excess over $6,100,000.................
$813,500 plus 17 percent of the excess over $7,100,000.................
$983,500 plus 18 percent of the excess over $8,100,000.................
$1,163,500 plus 19 percent of the excess over $9,100,000...............
$1,353,500 plus 20 percent of the excess over $10,100,000..............
       ``(d) Determination of Unified Credit.--In the case of an 
     estate to which this section applies, subsection (a) shall 
     not apply in determining the credit under section 2010.''.
       (b) Conforming Amendments.--
       (1) Section 2011 is amended by striking subsection (d) and 
     by redesignating subsections (e), (f), and (g) as subsections 
     (d), (e), and (f), respectively.
       (2) Section 2053(d)(3)(B) is amended by striking ``section 
     2011(e)'' and inserting ``section 2011(d)''.
       (3) Paragraph (9) of section 532(c) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 is repealed.
       (c) Clerical Amendment.--The item relating to section 2201 
     in the table of sections for subchapter C of chapter 11 is 
     amended to read as follows:

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces 
              and deaths of victims of certain terrorist attacks.''.

[[Page 27479]]

       (d) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to estates of decedents--
       (A) dying on or after September 11, 2001, and
       (B) in the case of individuals dying as a result of the 
     April 19, 1995, terrorist attack, dying on or after April 19, 
     1995.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 504. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS 
                   EXEMPT PAYMENTS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) payments made by an organization described in section 
     501(c)(3) of such Code by reason of the death, injury, 
     wounding, or illness of an individual incurred as the result 
     of the terrorist attacks against the United States on 
     September 11, 2001, or an attack involving anthrax occurring 
     on or after September 11, 2001, and before January 1, 2002, 
     shall be treated as related to the purpose or function 
     constituting the basis for such organization's exemption 
     under section 501 of such Code if such payments are made in 
     good faith using a reasonable and objective formula which is 
     consistently applied, and
       (2) in the case of a private foundation (as defined in 
     section 509 of such Code), any payment described in paragraph 
     (1) shall not be treated as made to a disqualified person for 
     purposes of section 4941 of such Code.
       (b) Effective Date.--This section shall apply to payments 
     made on or after September 11, 2001.

     SEC. 505. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) gross income shall not include any amount which (but 
     for this section) would be includible in gross income by 
     reason of the discharge (in whole or in part) of indebtedness 
     of any taxpayer if the discharge is by reason of the death of 
     an individual incurred as the result of the terrorist attacks 
     against the United States on September 11, 2001, or as the 
     result of illness incurred as a result of an attack involving 
     anthrax occurring on or after September 11, 2001, and before 
     January 1, 2002, and
       (2) return requirements under section 6050P of such Code 
     shall not apply to any discharge described in paragraph (1).
       (b) Effective Date.--This section shall apply to discharges 
     made on or after September 11, 2001, and before January 1, 
     2002.

                  Subtitle B--Other Relief Provisions

     SEC. 511. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 139 as section 140 and 
     inserting after section 138 the following new section:

     ``SEC. 139. DISASTER RELIEF PAYMENTS.

       ``(a) General Rule.--Gross income shall not include any 
     amount received by an individual as a qualified disaster 
     relief payment.
       ``(b) Qualified Disaster Relief Payment Defined.--For 
     purposes of this section, the term `qualified disaster relief 
     payment' means any amount paid to or for the benefit of an 
     individual--
       ``(1) to reimburse or pay reasonable and necessary 
     personal, family, living, or funeral expenses incurred as a 
     result of a qualified disaster,
       ``(2) to reimburse or pay reasonable and necessary expenses 
     incurred for the repair or rehabilitation of a personal 
     residence or repair or replacement of its contents to the 
     extent that the need for such repair, rehabilitation, or 
     replacement is attributable to a qualified disaster,
       ``(3) by a person engaged in the furnishing or sale of 
     transportation as a common carrier by reason of the death or 
     personal physical injuries incurred as a result of a 
     qualified disaster, or
       ``(4) if such amount is paid by a Federal, State, or local 
     government, or agency or instrumentality thereof, in 
     connection with a qualified disaster in order to promote the 
     general welfare,
     but only to the extent any expense compensated by such 
     payment is not otherwise compensated for by insurance or 
     otherwise.
       ``(c) Qualified Disaster Defined.--For purposes of this 
     section, the term `qualified disaster' means--
       ``(1) a disaster which results from a terroristic or 
     military action (as defined in section 692(c)(2)),
       ``(2) a Presidentially declared disaster (as defined in 
     section 1033(h)(3)),
       ``(3) a disaster which results from an accident involving a 
     common carrier, or from any other event, which is determined 
     by the Secretary to be of a catastrophic nature, or
       ``(4) with respect to amounts described in subsection 
     (b)(4), a disaster which is determined by an applicable 
     Federal, State, or local authority (as determined by the 
     Secretary) to warrant assistance from the Federal, State, or 
     local government or agency or instrumentality thereof.
       ``(d) Coordination With Employment Taxes.--For purposes of 
     chapter 2 and subtitle C, a qualified disaster relief payment 
     shall not be treated as net earnings from self-employment, 
     wages, or compensation subject to tax.
       ``(e) No Relief for Certain Individuals.--Subsections (a) 
     and (f) shall not apply with respect to any individual 
     identified by the Attorney General to have been a participant 
     or conspirator in a terroristic action (as so defined), or a 
     representative of such individual.
       ``(f) Exclusion of Certain Additional Payments.--Gross 
     income shall not include any amount received as payment under 
     section 406 of the Air Transportation Safety and System 
     Stabilization Act.''
       (b) Conforming Amendments.--The table of sections for part 
     III of subchapter B of chapter 1 is amended by striking the 
     item relating to section 139 and inserting the following new 
     items:

       ``Sec. 139. Disaster relief payments.
       ``Sec. 140. Cross references to other Acts.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 512. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND 
                   REQUIRED ACTIONS.

       (a) Expansion of Authority Relating to Disasters and 
     Terroristic or Military Actions.--Section 7508A is amended to 
     read as follows:

     ``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY 
                   REASON OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``(a) In General.--In the case of a taxpayer determined by 
     the Secretary to be affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3)) or a terroristic 
     or military action (as defined in section 692(c)(2)), the 
     Secretary may specify a period of up to one year that may be 
     disregarded in determining, under the internal revenue laws, 
     in respect of any tax liability of such taxpayer--
       ``(1) whether any of the acts described in paragraph (1) of 
     section 7508(a) were performed within the time prescribed 
     therefor (determined without regard to extension under any 
     other provision of this subtitle for periods after the date 
     (determined by the Secretary) of such disaster or action),
       ``(2) the amount of any interest, penalty, additional 
     amount, or addition to the tax for periods after such date, 
     and
       ``(3) the amount of any credit or refund.
       ``(b) Special Rules Regarding Pensions, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a disaster or action 
     described in subsection (a), the Secretary may specify a 
     period of up to one year which may be disregarded in 
     determining the date by which any action is required or 
     permitted to be completed under this title. No plan shall be 
     treated as failing to be operated in accordance with the 
     terms of the plan solely as the result of disregarding any 
     period by reason of the preceding sentence.
       ``(c) Special Rules for Overpayments.--The rules of section 
     7508(b) shall apply for purposes of this section.''.
       (b) Clarification of Scope of Acts Secretary May 
     Postpone.--Section 7508(a)(1)(K) (relating to time to be 
     disregarded) is amended by striking ``in regulations 
     prescribed under this section''.
       (c) Conforming Amendments to ERISA.--
       (1) Part 5 of subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1131 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON 
                   OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``In the case of a pension or other employee benefit plan, 
     or any sponsor, administrator, participant, beneficiary, or 
     other person with respect to such plan, affected by a 
     Presidentially declared disaster (as defined in section 
     1033(h)(3) of the Internal Revenue Code of 1986) or a 
     terroristic or military action (as defined in section 
     692(c)(2) of such Code), the Secretary may, notwithstanding 
     any other provision of law, prescribe, by notice or 
     otherwise, a period of up to one year which may be 
     disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (2) Section 4002 of Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1302) is amended by adding at the end the 
     following new subsection:
       ``(i) Special Rules Regarding Disasters, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a

[[Page 27480]]

     Presidentially declared disaster (as defined in section 
     1033(h)(3) of the Internal Revenue Code of 1986) or a 
     terroristic or military action (as defined in section 
     692(c)(2) of such Code), the corporation may, notwithstanding 
     any other provision of law, prescribe, by notice or 
     otherwise, a period of up to one year which may be 
     disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (d) Additional Conforming Amendments.--
       (1) Section 6404 is amended--
       (A) by striking subsection (h),
       (B) by redesignating subsection (i) as subsection (h), and
       (C) by adding at the end the following new subsection:
       ``(i) Cross Reference.--

  ``For authority to suspend running of interest, etc. by reason of 
Presidentially declared disaster or terroristic or military action, see 
section 7508A.''.
       (2) Section 6081(c) is amended to read as follows:
       ``(c) Cross References.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.
       (3) Section 6161(d) is amended by adding at the end the 
     following new paragraph:
       ``(3) Postponement of certain acts.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.
       (d) Clerical Amendments.--
       (1) The item relating to section 7508A in the table of 
     sections for chapter 77 is amended to read as follows:

``Sec. 7508A. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.
       (2) The table of contents for the Employee Retirement 
     Income Security Act of 1974 is amended by inserting after the 
     item relating to section 517 the following new item:

``Sec. 518. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to disasters and terroristic or military actions 
     occurring on or after September 11, 2001, with respect to any 
     action of the Secretary of the Treasury, the Secretary of 
     Labor, or the Pension Benefit Guaranty Corporation occurring 
     on or after the date of the enactment of this Act.

     SEC. 513. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR 
                   MILITARY ACTIONS.

       (a) Disability Income.--Section 104(a)(5) (relating to 
     compensation for injuries or sickness) is amended by striking 
     ``a violent attack'' and all that follows through the period 
     and inserting ``a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (b) Exemption From Income Tax for Certain Military or 
     Civilian Employees.--Section 692(c) is amended--
       (1) by striking ``outside the United States'' in paragraph 
     (1), and
       (2) by striking ``Sustained Overseas'' in the heading.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 514. CLARIFICATION OF DUE DATE FOR AIRLINE EXCISE TAX 
                   DEPOSITS.

       (a) In General.--Paragraph (3) of section 301(a) of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42) is amended to read as follows:
       ``(3) Airline-related deposit.--For purposes of this 
     subsection, the term `airline-related deposit' means any 
     deposit of taxes imposed by subchapter C of chapter 33 of 
     such Code (relating to transportation by air).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 301 of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42).

     SEC. 515. TREATMENT OF CERTAIN STRUCTURED SETTLEMENT 
                   PAYMENTS.

       (a) In General.--Subtitle E is amended by adding at the end 
     the following new chapter:

       ``CHAPTER 55--STRUCTURED SETTLEMENT FACTORING TRANSACTIONS

``Sec. 5891. Structured settlement factoring transactions.

     ``SEC. 5891. STRUCTURED SETTLEMENT FACTORING TRANSACTIONS.

       ``(a) Imposition of Tax.--There is hereby imposed on any 
     person who acquires directly or indirectly structured 
     settlement payment rights in a structured settlement 
     factoring transaction a tax equal to 40 percent of the 
     factoring discount as determined under subsection (c)(4) with 
     respect to such factoring transaction.
       ``(b) Exception for Certain Approved Transactions.--
       ``(1) In general.--The tax under subsection (a) shall not 
     apply in the case of a structured settlement factoring 
     transaction in which the transfer of structured settlement 
     payment rights is approved in advance in a qualified order.
       ``(2) Qualified order.--For purposes of this section, the 
     term `qualified order' means a final order, judgment, or 
     decree which--
       ``(A) finds that the transfer described in paragraph (1)--
       ``(i) does not contravene any Federal or State statute or 
     the order of any court or responsible administrative 
     authority, and
       ``(ii) is in the best interest of the payee, taking into 
     account the welfare and support of the payee's dependents, 
     and
       ``(B) is issued--
       ``(i) under the authority of an applicable State statute by 
     an applicable State court, or
       ``(ii) by the responsible administrative authority (if any) 
     which has exclusive jurisdiction over the underlying action 
     or proceeding which was resolved by means of the structured 
     settlement.
       ``(3) Applicable state statute.--For purposes of this 
     section, the term `applicable State statute' means a statute 
     providing for the entry of an order, judgment, or decree 
     described in paragraph (2)(A) which is enacted by--
       ``(A) the State in which the payee of the structured 
     settlement is domiciled, or
       ``(B) if there is no statute described in subparagraph (A), 
     the State in which either the party to the structured 
     settlement (including an assignee under a qualified 
     assignment under section 130) or the person issuing the 
     funding asset for the structured settlement is domiciled or 
     has its principal place of business.
       ``(4) Applicable state court.--For purposes of this 
     section--
       ``(A) In general.--The term `applicable State court' means, 
     with respect to any applicable State statute, a court of the 
     State which enacted such statute.
       ``(B) Special rule.--In the case of an applicable State 
     statute described in paragraph (3)(B), such term also 
     includes a court of the State in which the payee of the 
     structured settlement is domiciled.
       ``(5) Qualified order dispositive.--A qualified order shall 
     be treated as dispositive for purposes of the exception under 
     this subsection.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Structured settlement.--The term `structured 
     settlement' means an arrangement--
       ``(A) which is established by--
       ``(i) suit or agreement for the periodic payment of damages 
     excludable from the gross income of the recipient under 
     section 104(a)(2), or
       ``(ii) agreement for the periodic payment of compensation 
     under any workers' compensation law excludable from the gross 
     income of the recipient under section 104(a)(1), and
       ``(B) under which the periodic payments are--
       ``(i) of the character described in subparagraphs (A) and 
     (B) of section 130(c)(2), and
       ``(ii) payable by a person who is a party to the suit or 
     agreement or to the workers' compensation claim or by a 
     person who has assumed the liability for such periodic 
     payments under a qualified assignment in accordance with 
     section 130.
       ``(2) Structured settlement payment rights.--The term 
     `structured settlement payment rights' means rights to 
     receive payments under a structured settlement.
       ``(3) Structured settlement factoring transaction.--
       ``(A) In general.--The term `structured settlement 
     factoring transaction' means a transfer of structured 
     settlement payment rights (including portions of structured 
     settlement payments) made for consideration by means of sale, 
     assignment, pledge, or other form of encumbrance or 
     alienation for consideration.
       ``(B) Exception.--Such term shall not include--
       ``(i) the creation or perfection of a security interest in 
     structured settlement payment rights under a blanket security 
     agreement entered into with an insured depository institution 
     in the absence of any action to redirect the structured 
     settlement payments to such institution (or agent or 
     successor thereof) or otherwise to enforce such blanket 
     security interest as against the structured settlement 
     payment rights, or
       ``(ii) a subsequent transfer of structured settlement 
     payment rights acquired in a structured settlement factoring 
     transaction.
       ``(4) Factoring discount.--The term `factoring discount' 
     means an amount equal to the excess of--
       ``(A) the aggregate undiscounted amount of structured 
     settlement payments being acquired in the structured 
     settlement factoring transaction, over
       ``(B) the total amount actually paid by the acquirer to the 
     person from whom such structured settlement payments are 
     acquired.
       ``(5) Responsible administrative authority.--The term 
     `responsible administrative

[[Page 27481]]

     authority' means the administrative authority which had 
     jurisdiction over the underlying action or proceeding which 
     was resolved by means of the structured settlement.
       ``(6) State.--The term `State' includes the Commonwealth of 
     Puerto Rico and any possession of the United States.
       ``(d) Coordination With Other Provisions.--
       ``(1) In general.--If the applicable requirements of 
     sections 72, 104(a)(1), 104(a)(2), 130, and 461(h) were 
     satisfied at the time the structured settlement involving 
     structured settlement payment rights was entered into, the 
     subsequent occurrence of a structured settlement factoring 
     transaction shall not affect the application of the 
     provisions of such sections to the parties to the structured 
     settlement (including an assignee under a qualified 
     assignment under section 130) in any taxable year.
       ``(2) No withholding of tax.--The provisions of section 
     3405 regarding withholding of tax shall not apply to the 
     person making the payments in the event of a structured 
     settlement factoring transaction.''.
       (b) Clerical Amendment.--The table of chapters for subtitle 
     E is amended by adding at the end the following new item:

``Chapter 55. Structured settlement factoring transactions.''.
       (c) Effective Dates.--
       (1) In general.--The amendments made by this section (other 
     than the provisions of section 5891(d) of the Internal 
     Revenue Code of 1986, as added by this section) shall apply 
     to structured settlement factoring transactions (as defined 
     in section 5891(c) of such Code (as so added)) entered into 
     on or after the 30th day following the date of the enactment 
     of this Act.
       (2) Clarification of existing law.--Section 5891(d) of such 
     Code (as so added) shall apply to structured settlement 
     factoring transactions (as defined in section 5891(c) of such 
     Code (as so added)) entered into before, on, or after such 
     30th day.
       (3) Transition rule.--In the case of a structured 
     settlement factoring transaction entered into during the 
     period beginning on the 30th day following the date of the 
     enactment of this Act and ending on July 1, 2002, no tax 
     shall be imposed under section 5891(a) of such Code if--
       (A) the structured settlement payee is domiciled in a State 
     (or possession of the United States) which has not enacted a 
     statute providing that the structured settlement factoring 
     transaction is ineffective unless the transaction has been 
     approved by an order, judgment, or decree of a court (or 
     where applicable, a responsible administrative authority) 
     which finds that such transaction--
       (i) does not contravene any Federal or State statute or the 
     order of any court (or responsible administrative authority), 
     and
       (ii) is in the best interest of the structured settlement 
     payee or is appropriate in light of a hardship faced by the 
     payee, and
       (B) the person acquiring the structured settlement payment 
     rights discloses to the structured settlement payee in 
     advance of the structured settlement factoring transaction 
     the amounts and due dates of the payments to be transferred, 
     the aggregate amount to be transferred, the consideration to 
     be received by the structured settlement payee for the 
     transferred payments, the discounted present value of the 
     transferred payments (including the present value as 
     determined in the manner described in section 7520 of such 
     Code), and the expenses required under the terms of the 
     structured settlement factoring transaction to be paid by the 
     structured settlement payee or deducted from the proceeds of 
     such transaction.

     SEC. 516. PERSONAL EXEMPTION DEDUCTION FOR CERTAIN DISABILITY 
                   TRUSTS.

       (a) In General.--Subsection (b) of section 642 (relating to 
     deduction for personal exemption) is amended to read as 
     follows:
       ``(b) Deduction for Personal Exemption.--
       ``(1) Estates.--An estate shall be allowed a deduction of 
     $600.
       ``(2) Trusts.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a trust shall be allowed a deduction of $100.
       ``(B) Trusts distributing income currently.--A trust which, 
     under its governing instrument, is required to distribute all 
     of its income currently shall be allowed a deduction of $300.
       ``(C) Disability trusts.--
       ``(i) In general.--A qualified disability trust shall be 
     allowed a deduction equal to the exemption amount under 
     section 151(d), determined--

       ``(I) by treating such trust as an individual described in 
     section 151(d)(3)(C)(iii), and
       ``(II) by applying section 67(e) (without the reference to 
     section 642(b)) for purposes of determining the adjusted 
     gross income of the trust.

       ``(ii) Qualified disability trust.--For purposes of clause 
     (i), the term `qualified disability trust' means any trust 
     if--

       ``(I) such trust is a disability trust described in 
     subsection (c)(2)(B)(iv) of section 1917 of the Social 
     Security Act (42 U.S.C. 1396p), and
       ``(II) all of the beneficiaries of the trust as of the 
     close of the taxable year are determined by the Commissioner 
     of Social Security to have been disabled (within the meaning 
     of section 1614(a)(3) of the Social Security Act, 42 U.S.C. 
     1382c(a)(3)) for some portion of such year.

     A trust shall not fail to meet the requirements of subclause 
     (II) merely because the corpus of the trust may revert to a 
     person who is not so disabled after the trust ceases to have 
     any beneficiary who is so disabled.''
       ``(3) Deductions in lieu of personal exemption.--The 
     deductions allowed by this subsection shall be in lieu of the 
     deductions allowed under section 151 (relating to deduction 
     for personal exemption).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 517. DISCLOSURE OF TAX INFORMATION IN TERRORISM AND 
                   NATIONAL SECURITY INVESTIGATIONS.

       (a) Disclosure Without a Request of Information Relating to 
     Terrorist Activities, Etc.--Paragraph (3) of section 6103(i) 
     (relating to disclosure of return information to apprise 
     appropriate officials of criminal activities or emergency 
     circumstances) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Terrorist activities, etc.--
       ``(i) In general.--Except as provided in paragraph (6), the 
     Secretary may disclose in writing return information (other 
     than taxpayer return information) that may be related to a 
     terrorist incident, threat, or activity to the extent 
     necessary to apprise the head of the appropriate Federal law 
     enforcement agency responsible for investigating or 
     responding to such terrorist incident, threat, or activity. 
     The head of the agency may disclose such return information 
     to officers and employees of such agency to the extent 
     necessary to investigate or respond to such terrorist 
     incident, threat, or activity.
       ``(ii) Disclosure to the department of justice.--Returns 
     and taxpayer return information may also be disclosed to the 
     Attorney General under clause (i) to the extent necessary 
     for, and solely for use in preparing, an application under 
     paragraph (7)(D).
       ``(iii) Taxpayer identity.--For purposes of this 
     subparagraph, a taxpayer's identity shall not be treated as 
     taxpayer return information.
       ``(iv) Termination.--No disclosure may be made under this 
     subparagraph after December 31, 2003.''.
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities, Etc.--Subsection (i) of section 6103 
     (relating to disclosure to Federal officers or employees for 
     administration of Federal laws not relating to tax 
     administration) is amended by redesignating paragraph (7) as 
     paragraph (8) and by inserting after paragraph (6) the 
     following new paragraph:
       ``(7) Disclosure upon request of information relating to 
     terrorist activities, etc.--
       ``(A) Disclosure to law enforcement agencies.--
       ``(i) In general.--Except as provided in paragraph (6), 
     upon receipt by the Secretary of a written request which 
     meets the requirements of clause (iii), the Secretary may 
     disclose return information (other than taxpayer return 
     information) to officers and employees of any Federal law 
     enforcement agency who are personally and directly engaged in 
     the response to or investigation of any terrorist incident, 
     threat, or activity.
       ``(ii) Disclosure to state and local law enforcement 
     agencies.--The head of any Federal law enforcement agency may 
     disclose return information obtained under clause (i) to 
     officers and employees of any State or local law enforcement 
     agency but only if such agency is part of a team with the 
     Federal law enforcement agency in such response or 
     investigation and such information is disclosed only to 
     officers and employees who are personally and directly 
     engaged in such response or investigation.
       ``(iii) Requirements.--A request meets the requirements of 
     this clause if--

       ``(I) the request is made by the head of any Federal law 
     enforcement agency (or his delegate) involved in the response 
     to or investigation of any terrorist incident, threat, or 
     activity, and
       ``(II) the request sets forth the specific reason or 
     reasons why such disclosure may be relevant to a terrorist 
     incident, threat, or activity.

       ``(iv) Limitation on use of information.--Information 
     disclosed under this subparagraph shall be solely for the use 
     of the officers and employees to whom such information is 
     disclosed in such response or investigation.
       ``(B) Disclosure to intelligence agencies.--
       ``(i) In general.--Except as provided in paragraph (6), 
     upon receipt by the Secretary of a written request which 
     meets the requirements of clause (ii), the Secretary may 
     disclose return information (other than taxpayer return 
     information) to those officers and employees of the 
     Department of Justice, the Department of the Treasury, and 
     other Federal intelligence agencies who are personally and 
     directly engaged in the collection or analysis of 
     intelligence and counterintelligence information or 
     investigation concerning any terrorist incident, threat, or

[[Page 27482]]

     activity. For purposes of the preceding sentence, the 
     information disclosed under the preceding sentence shall be 
     solely for the use of such officers and employees in such 
     investigation, collection, or analysis.
       ``(ii) Requirements.--A request meets the requirements of 
     this subparagraph if the request--

       ``(I) is made by an individual described in clause (iii), 
     and
       ``(II) sets forth the specific reason or reasons why such 
     disclosure may be relevant to a terrorist incident, threat, 
     or activity.

       ``(iii) Requesting individuals.--An individual described in 
     this subparagraph is an individual--

       ``(I) who is an officer or employee of the Department of 
     Justice or the Department of the Treasury who is appointed by 
     the President with the advice and consent of the Senate or 
     who is the Director of the United States Secret Service, and
       ``(II) who is responsible for the collection and analysis 
     of intelligence and counterintelligence information 
     concerning any terrorist incident, threat, or activity.

       ``(iv) Taxpayer identity.--For purposes of this 
     subparagraph, a taxpayer's identity shall not be treated as 
     taxpayer return information.
       ``(C) Disclosure under ex parte orders.--
       ``(i) In general.--Except as provided in paragraph (6), any 
     return or return information with respect to any specified 
     taxable period or periods shall, pursuant to and upon the 
     grant of an ex parte order by a Federal district court judge 
     or magistrate under clause (ii), be open (but only to the 
     extent necessary as provided in such order) to inspection by, 
     or disclosure to, officers and employees of any Federal law 
     enforcement agency or Federal intelligence agency who are 
     personally and directly engaged in any investigation, 
     response to, or analysis of intelligence and 
     counterintelligence information concerning any terrorist 
     incident, threat, or activity. Return or return information 
     opened to inspection or disclosure pursuant to the preceding 
     sentence shall be solely for the use of such officers and 
     employees in the investigation, response, or analysis, and in 
     any judicial, administrative, or grand jury proceedings, 
     pertaining to such terrorist incident, threat, or activity.
       ``(ii) Application for order.--The Attorney General, the 
     Deputy Attorney General, the Associate Attorney General, any 
     Assistant Attorney General, or any United States attorney may 
     authorize an application to a Federal district court judge or 
     magistrate for the order referred to in clause (i). Upon such 
     application, such judge or magistrate may grant such order if 
     he determines on the basis of the facts submitted by the 
     applicant that--

       ``(I) there is reasonable cause to believe, based upon 
     information believed to be reliable, that the return or 
     return information may be relevant to a matter relating to 
     such terrorist incident, threat, or activity, and
       ``(II) the return or return information is sought 
     exclusively for use in a Federal investigation, analysis, or 
     proceeding concerning any terrorist incident, threat, or 
     activity.

       ``(D) Special rule for ex parte disclosure by the irs.--
       ``(i) In general.--Except as provided in paragraph (6), the 
     Secretary may authorize an application to a Federal district 
     court judge or magistrate for the order referred to in 
     subparagraph (C)(i). Upon such application, such judge or 
     magistrate may grant such order if he determines on the basis 
     of the facts submitted by the applicant that the requirements 
     of subparagraph (C)(ii)(I) are met.
       ``(ii) Limitation on use of information.--Information 
     disclosed under clause (i)--

       ``(I) may be disclosed only to the extent necessary to 
     apprise the head of the appropriate Federal law enforcement 
     agency responsible for investigating or responding to a 
     terrorist incident, threat, or activity, and
       ``(II) shall be solely for use in a Federal investigation, 
     analysis, or proceeding concerning any terrorist incident, 
     threat, or activity.

     The head of such Federal agency may disclose such information 
     to officers and employees of such agency to the extent 
     necessary to investigate or respond to such terrorist 
     incident, threat, or activity.
       ``(E) Termination.--No disclosure may be made under this 
     paragraph after December 31, 2003.''.
       (c) Conforming Amendments.--
       (1) Section 6103(a)(2) is amended by inserting ``any local 
     law enforcement agency receiving information under subsection 
     (i)(7)(A),'' after ``State,''.
       (2) Section 6103(b) is amended by adding at the end the 
     following new paragraph:
       ``(11) Terrorist incident, threat, or activity.--The term 
     `terrorist incident, threat, or activity' means an incident, 
     threat, or activity involving an act of domestic terrorism 
     (as defined in section 2331(5) of title 18, United States 
     Code) or international terrorism (as defined in section 
     2331(1) of such title).''.
       (3) The heading of section 6103(i)(3) is amended by 
     inserting ``or terrorist'' after ``criminal''.
       (4) Paragraph (4) of section 6103(i) is amended--
       (A) in subparagraph (A) by inserting ``or (7)(C)'' after 
     ``paragraph (1)'', and
       (B) in subparagraph (B) by striking ``or (3)(A)'' and 
     inserting ``(3)(A) or (C), or (7)''.
       (5) Paragraph (6) of section 6103(i) is amended--
       (A) by striking ``(3)(A)'' and inserting ``(3)(A) or (C)'', 
     and
       (B) by striking ``or (7)'' and inserting ``(7), or (8)''.
       (6) Section 6103(p)(3) is amended--
       (A) in subparagraph (A) by striking ``(7)(A)(ii)'' and 
     inserting ``(8)(A)(ii)'', and
       (B) in subparagraph (C) by striking ``(i)(3)(B)(i)'' and 
     inserting ``(i)(3)(B)(i) or (7)(A)(ii)''.
       (7) Section 6103(p)(4) is amended--
       (A) in the matter preceding subparagraph (A)--
       (i) by striking ``or (5),'' the first place it appears and 
     inserting ``(5), or (7),'', and
       (ii) by striking ``(i)(3)(B)(i),'' and inserting 
     ``(i)(3)(B)(i) or (7)(A)(ii),'', and
       (B) in subparagraph (F)(ii) by striking ``or (5),'' the 
     first place it appears and inserting ``(5) or (7),''.
       (8) Section 6103(p)(6)(B)(i) is amended by striking 
     ``(i)(7)(A)(ii)'' and inserting ``(i)(8)(A)(ii)''.
       (9) Section 6105(b) is amended--
       (A) by striking ``or'' at the end of paragraph (2),
       (B) by striking ``paragraphs (1) or (2)'' in paragraph (3) 
     and inserting ``paragraph (1), (2), or (3)'',
       (C) by redesignating paragraph (3) as paragraph (4), and
       (D) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) to the disclosure of tax convention information on 
     the same terms as return information may be disclosed under 
     paragraph (3)(C) or (7) of section 6103(i), except that in 
     the case of tax convention information provided by a foreign 
     government, no disclosure may be made under this paragraph 
     without the written consent of the foreign government, or''.
       (10) Section 7213(a)(2) is amended by striking 
     ``(i)(3)(B)(i),'' and inserting ``(i)(3)(B)(i) or 
     (7)(A)(ii),''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to disclosures made on or after the date of the 
     enactment of this Act.

            TITLE VI--MISCELLANEOUS AND TECHNICAL PROVISIONS

              Subtitle A--General Miscellaneous Provisions

     SEC. 601. 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. 602. 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. 603. 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

[[Page 27483]]

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

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

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

     SEC. 605. 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. 606. 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. 611. 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

[[Page 27484]]

     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.--
       ``(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), 
     and
       (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''.
       (2) Section 63(c)(7) is amended by adding at the end the 
     following:

     ``If any amount determined under the preceding table is not a 
     multiple of $50, such amount shall be rounded to the next 
     lowest multiple of $50.''.
       (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) Amendment Related to Section 511 of the Act.--Section 
     2511(c) is amended by striking ``taxable gift under section 
     2503,'' and inserting ``transfer of property by gift,''.
       (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.''.

[[Page 27485]]

       (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:
       ``(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

[[Page 27486]]

     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 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. 612. 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. 613. 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. 614. 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. 615. 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. 616. 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).

[[Page 27487]]

       (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. 617. 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. 618. ADDITIONAL CORRECTIONS.

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

     SEC. 701. SHORT TITLE.

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

     SEC. 702. 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 703 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. 703. TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION 
                   ACCOUNT.

       (a) In General.--Any agreement under this title shall 
     provide that the State will establish, for each eligible 
     individual who files an application for temporary extended 
     unemployment compensation, a temporary extended unemployment 
     compensation account with respect to such individual's 
     benefit year.
       (b) Amount in Account.--
       (1) In general.--The amount established in an account under 
     subsection (a) shall be equal to the lesser of--
       (A) 50 percent of the total amount of regular compensation 
     (including dependents' allowances) payable to the individual 
     during the individual's benefit year under such law, or
       (B) 13 times the individual's average weekly benefit amount 
     for the benefit year.
       (2) Reduction for extended benefits.--The amount in an 
     account under paragraph (1) shall be reduced (but not below 
     zero) by the aggregate amount of extended compensation (if 
     any) received by such individual relating to the same benefit 
     year under the Federal-State Extended Unemployment 
     Compensation Act of 1970 (26 U.S.C. 3304 note).

[[Page 27488]]

       (3) Weekly benefit amount.--For purposes of this 
     subsection, an individual's weekly benefit amount for any 
     week is the amount of regular compensation (including 
     dependents' allowances) under the State law payable to such 
     individual for such week for total unemployment.

     SEC. 704. 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. 705. FINANCING PROVISIONS.

       (a) In General.--Funds in the extended unemployment 
     compensation account (as established by section 905(a) of the 
     Social Security Act (42 U.S.C. 1105(a)) of the Unemployment 
     Trust Fund (as established by section 904(a) of such Act (42 
     U.S.C. 1104(a)) shall be used for the making of payments to 
     States having agreements entered into under this title.
       (b) Certification.--The Secretary shall from time to time 
     certify to the Secretary of the Treasury for payment to each 
     State the sums payable to such State under this title. The 
     Secretary of the Treasury, prior to audit or settlement by 
     the General Accounting Office, shall make payments to the 
     State in accordance with such certification, by transfers 
     from the extended unemployment compensation account (as so 
     established) to the account of such State in the Unemployment 
     Trust Fund (as so established).
       (c) Assistance to States.--There are appropriated out of 
     the employment security administration account (as 
     established by section 901(a) of the Social Security Act (42 
     U.S.C. 1101(a)) of the Unemployment Trust Fund, without 
     fiscal year limitation, such funds as may be necessary for 
     purposes of assisting States (as provided in title III of the 
     Social Security Act (42 U.S.C. 501 et seq.)) in meeting the 
     costs of administration of agreements under this title.
       (d) Appropriations for Certain Payments.--There are 
     appropriated from the general fund of the Treasury, without 
     fiscal year limitation, to the extended unemployment 
     compensation account (as so established) of the Unemployment 
     Trust Fund (as so established) such sums as the Secretary 
     estimates to be necessary to make the payments under this 
     section in respect of--
       (1) compensation payable under chapter 85 of title 5, 
     United States Code; and
       (2) compensation payable on the basis of services to which 
     section 3309(a)(1) of the Internal Revenue Code of 1986 
     applies.
     Amounts appropriated pursuant to the preceding sentence shall 
     not be required to be repaid.

     SEC. 706. 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. 707. 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. 708. 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. 709. SPECIAL REED ACT TRANSFER IN FISCAL YEAR 2002.

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

                 ``Special Transfer in Fiscal Year 2002

       ``(d)(1) The Secretary of the Treasury shall transfer (as 
     of the date determined under paragraph (5)) from the Federal 
     unemployment account to the account of each State in the 
     Unemployment Trust Fund the amount determined with respect to 
     such State under paragraph (2).
       ``(2) The amount to be transferred under this subsection to 
     a State account shall (as determined by the Secretary of 
     Labor and certified by such Secretary to the Secretary of the 
     Treasury) be equal to--
       ``(A) the amount which would have been required to have 
     been transferred under this section to such account at the 
     beginning of fiscal year 2002 if--
       ``(i) section 709(a)(1) of the Temporary Extended 
     Unemployment Compensation Act of 2001 had been enacted before 
     the close of fiscal year 2001, and
       ``(ii) section 5402 of Public Law 105-33 (relating to 
     increase in Federal unemployment account ceiling) had not 
     been enacted,
     minus
       ``(B) the amount which was in fact transferred under this 
     section to such account at the beginning of fiscal year 2002.
       ``(3)(A) Except as provided in paragraph (4), amounts 
     transferred to a State account pursuant to this subsection 
     may be used only in the payment of cash benefits--
       ``(i) to individuals with respect to their unemployment, 
     and
       ``(ii) which are allowable under subparagraph (B) or (C).
       ``(B)(i) At the option of the State, cash benefits under 
     this paragraph may include amounts which shall be payable 
     as--
       ``(I) regular compensation, or
       ``(II) additional compensation, upon the exhaustion of any 
     temporary extended unemployment compensation (if such State 
     has entered into an agreement under the Temporary Extended 
     Unemployment Compensation Act of 2001), 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

[[Page 27489]]

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

          TITLE VIII--DISPLACED WORKER HEALTH INSURANCE CREDIT

     SEC. 801. 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.--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

[[Page 27490]]

     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--
       (1) 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
       (2) paragraphs (4) and (5) of such section 2741(b) shall 
     not apply.
       (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 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).''returns relating 
     to payments for qualified health insurance).''
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6050S the 
     following 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. 802. 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.''
       (c) 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 IX--EMPLOYMENT AND TRAINING ASSISTANCE AND TEMPORARY HEALTH CARE 
                          COVERAGE ASSISTANCE

     SEC. 901. 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

[[Page 27491]]

     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
       ``(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, 
     $4,000,000,000 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 X--TEMPORARY STATE HEALTH CARE ASSISTANCE

     SEC. 1001. 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

[[Page 27492]]

     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 XI--SOCIAL SECURITY HELD HARMLESS; BUDGETARY TREATMENT OF ACT

     SEC. 1101. 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. 1102. EMERGENCY DESIGNATION.

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

  The SPEAKER pro tempore. Pursuant to House Resolution 320, the 
gentleman from California (Mr. Thomas) and the gentleman from New York 
(Mr. Rangel) each will control 1 hour.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the last time we addressed a piece of legislation that 
was designed to help us stimulate the economy, as requested by the 
President, as Alan Greenspan had indicated, this economy needed some 
help, and that perhaps by making some decisions in the tax and business 
area we could assist the recovery. Equally important, those people who 
lost their jobs, and, as we have come to realize now more and more 
associated with the loss of job is the loss of health insurance, that 
that had to be part of the package as well.
  We started, as we normally do in the legislative process, by passing 
a bill out of the House of Representatives. What then normally happens 
is the Senate of the United States passes a piece of legislation, and, 
if it is different in the House and the Senate, we go to a conference. 
The conference then works out the difference between the two bills.
  The House did its job. On October 24 we started the process by 
passing our Stimulus and Recovery Act. The Senate did not do its job. 
The Senate did not pass a bill. But all of us, trying to stimulate this 
economy and help those who, through no fault of their own, are not now 
employed or do not have either the wherewithal or the opportunity to 
provide their families with health insurance, we decided to try to move 
under a leadership umbrella.
  Notwithstanding the Senate's inability to move legislation to get us 
into a regular conference, we reached out and tried to create a 
leadership conference that would try to operate under the same rules so 
that we could address the very real need to help stimulate the economy 
and answer those distressed workers.
  We have worked long and hard, and I do have to say on the floor that 
the chairman of the Senate Finance Committee on the other side worked 
diligently. I believe he was required to follow rules of engagement 
which made it very difficult to come together. His staff worked long 
hours. We tried to be as creative as we could under the restrictions 
placed on us, and we did not ultimately succeed in producing a document 
that looked like a conference between the House-passed bill and the 
pieces of legislation that were brought from the Senate. For example, 
the Senate finance-passed bill, which passed by an 11 to 10 vote, was 
one of the vehicles that we looked at.
  Notwithstanding that, those discussions, nevertheless, bore fruit, 
and the legislation that you have before you tonight, and we will talk 
about it in particular areas, has major modifications as though a 
conference took place. So the House started by passing legislation, and 
tonight we reach the culmination of what amounts to the result of a 
conference, notwithstanding the fact that the Senate has not passed any 
legislation in this area.
  As we discuss the pieces of the bill, I do hope Members will focus on 
how much the legislation changed between October 24 and today. That is 
what normally happens when the House and the Senate get together.
  The package represented here tonight in the legislation before you is 
a significantly different package than what we presented on October 24, 
and our job will be to enlighten both the Members and the American 
public about how the President's intervention in the area of health 
insurance has produced a significantly better package and how the House 
leadership's willingness to make modifications on the stimulus side 
has, in fact, produced a document that would look very much like a 
conference report would normally look.
  Mr. Speaker, I reserve the balance of my time.


                ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE

  The SPEAKER pro tempore (Mr. LaTourette). The Chair would again 
advise all Members that the rules covering decorum in debate in the 
House indicate that a factual description relating to Senate action or 
inaction concerning a measure then under debate in the House are in 
order but characterizations of those actions or inactions are not 
allowed.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  12:40. 12:40, and 8 million people without work. Some of these people 
have been described as being ``unproductive.'' But all of these people 
have been promised that this Congress of this great Nation, that we 
would not only feel their pain, but we would do something about it.
  We waited patiently, because people have confidence in the President 
and the Congress. When the flag went up, we saluted it; when we were 
hit, we responded; and during the war, we are the patriots. But we kind 
of felt that in order to stimulate the economy, that it was not just 
tax relief.
  Everyone agreed if it was temporary, if it was direct, if it could 
stimulate, encourage investment, we should do it. Nobody said, nobody 
said, that these 8 million people had to be held hostage until we did 
it their way. That type of thinking never came up.
  But, yes, we went into some kind of a conference, and we spent a lot 
of time on taxes. And the chairman of the Committee on Ways and Means 
would have to agree that there were a lot of concessions made, 
concessions that we found unpleasant. But because we were determined 
that we not leave this House of Representatives without doing something 
for these 8 million people. We said that we agree with you on taxes, if 
you agree with us on unemployment insurance and on health.
  Well, it just seems like when you get to unemployment insurance, they 
believe a block grant will take care of that. Trust the governors; they 
will take care of it. Maybe some people are not eligible, maybe there 
is not enough money, but trust the governors, they would do it.
  Well, we said we will trust the House and we will trust the Senate 
and we will just leave that alone, but let us get to the question of 
health.
  This is the funniest thing in the world, that we are talking about 
extending health benefits for 1 year. We

[[Page 27493]]

are talking about an existing program that is used today by employers. 
We are talking about using a system called COBRA and providing the 
funds so that the people who lost their jobs will be able to still 
continue to get health insurance.

                              {time}  0045

  But there are some people in this House that believe they do not like 
the current system; that they do not believe there should be employer-
sponsored insurance programs; that what they really believe should 
happen is that people who are out of work and need insurance, they need 
credits, they need vouchers, they have to go shop and see where they 
can get the best benefit for their dollar. They do not need these 
Cadillac programs that Republicans and Democrats have as Members of 
Congress; they need something cut back. And, of course, if they have 
ailments and the HMO says it is a higher price, they will give 60 
percent of it, but they better go find the rest of it.
  I tried to figure, in this country, at this time of year, the dignity 
of a person without a job, the pressures on a marriage, the inability 
to look at your children and know that you do not have a job, that you 
cannot pay their tuition, you cannot pay the mortgage. That is enough 
for any American to lose their dignity. But when you know you are not 
even currently covered for health insurance, that you do not know what 
is going to happen to the rest of your family, and they tell you to go 
out with the credit and shop; so I asked everyone, how do you do it? 
And do my colleagues know something? I heard an explanation in the 
Committee on Rules that I could not believe. You needed a lawyer to 
figure out what to do with the credit. So I said immediately, let me 
find out where this is in the bill, because I may not have understood 
in the Committee on Rules, but before I came to this floor, you bet 
your life I was going to find it. Who has page 100 of the Republican 
bill? I thank the gentleman from Washington (Mr. McDermott).
  This is all you need. Forget the complexities of it; forget how it 
works. If you do not know what to do with an advance refundable tax 
credit, not to worry. If you do not know what to do with a tax credit 
and you are not working and you have no unemployment, no earnings 
coming in, not to worry. Because under the Thomas bill, let me 
emphasize, under the Thomas bill, because the Committee on Ways and 
Means, like with most tax bills, had nothing to do with this; but that 
is okay, the gentleman from California (Mr. Thomas) is a smart person. 
Because, under the Thomas bill, the whole program shall be established 
for making payments on behalf of the eligible individual by the 
Secretary of the Treasury. Not the Secretary of Health and Human 
Services, the Secretary of the Treasury.
  So we got 2 hours of debate. Every so often, my colleagues will hear 
me refer to page 100, because we have a lot of bright people in this 
House, and they know just what to tell the Secretary to do. So do not 
go to sleep; be alert. People are going to ask, what is in the health 
bill? And remember, one does not have to study it. Hold on to page 100.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  As we said on October 24, that was the bill that started the process. 
If anyone wants to look at any of the other pages in the bill, they 
will find out that on the health provision, there was $3 billion 
provided, and on unemployment, there was 9.2. That bill had $12.2 
billion directed toward the unemployed and health insurance for them.
  In the bill we have in front of us tonight, thanks to the President 
Bush health insurance credit, there is $18.2 billion for health, and 
there is $19 billion for unemployment, for a total of $37.2 billion. 
One may wave one page, but the unemployed and those who are looking for 
health insurance think a $25 billion difference is real money. If the 
House and the Senate do not act on this before we leave for our break, 
all the one-page waving in the world will not help them out. This bill 
will provide $37.2 billion.
  Mr. Speaker, it is my pleasure to yield 2 minutes to the gentleman 
from New York (Mr. Houghton), a member of the committee.
  Mr. HOUGHTON. Mr. Speaker, there are many features of this bill. I 
would like to talk about one, which happens to do with New York City; 
and New York City, of course, was the focal point of the bombing. Many 
people were killed. Buildings were destroyed. This is a particular 
feature of this bill which I believe in very strongly, and I would like 
to feel my other New York associates would feel this way too.
  I am not going to go through the details of this bill, because they 
are quite technical in terms of expensing and tax-exempt private bonds 
and things like that. But the end result, and I will make this very 
brief, is that it is going to help the smaller businesses and the 
people who have lived and shopped and started and thrived in lower New 
York to come back, and that is the critical thing. Mr. Speaker, 20 
million square feet of office space was lost, and we have to somehow 
bring that back. I know that other States say, well, why is this 
special for New York? New York was the focal point of the bombing, and 
there was no point in avoiding that. We must help this city.
  I think this is a good bill, it is a good feature, and I hope other 
people will support it.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I think I have not made myself clear, Mr. Speaker. I asked people to 
look for page 100 to establish what the program was, not how much money 
was there. Who cares how much money is there if we do not know how to 
get it? So please, take a look at page 100. That is called the health 
program. We can put lipstick on the page, but we cannot call it a lady. 
This is no health program.
  Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. 
Matsui), a senior member of the committee; and he knows a health 
program when he sees one.
  Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel), the ranking Democrat on the Committee on Ways and Means, for 
yielding me this time.
  This bill will not become law; and I think the majority will probably 
be very happy about that, because there is no way that this 
legislation, the Thomas bill, will have anything to do with stimulating 
the U.S. economy. The reason for it is because it is based upon a wrong 
premise. Essentially what we have right now is a lack of consumer 
confidence, we have an underutilization of plant capacity, and our 
exports are down because our foreign competitors are not buying. So the 
bill itself will have nothing to do with making the economy better.
  What is interesting is that the gentleman from California (Mr. 
Thomas), in his legislation, makes some modifications in the corporate 
minimum tax; but basically, he puts a huge hole in it. It has something 
on the operating losses in subpart F, which has nothing to do with 
stimulating the economy. Essentially in this bill, 85 percent of the 
$260 billion over the next 5 years will be spent in the form of tax 
cuts to corporations or wealthy individuals. Only about 15 percent of 
it goes to the unemployed and those people that need health insurance. 
This is just a back-door way of getting the tax cuts that the business 
community did not get in the June tax bill.
  I have to say, what is very offensive about this is the fact that it 
comes from the Social Security payroll taxes. That is the problem. It 
comes from Social Security. So using Social Security payroll taxes, it 
comes from the lady who is a janitor or the lady who is the elevator 
operator, their tough-earned money, to pay for major tax cuts for big 
corporations. I think that is outrageous. They are lucky that this bill 
will not become law, because this bill will have nothing to do with 
stimulating the economy. What this bill will basically do is pay off 
those people that have made big contributions.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  I am looking at page 44 of a bill called the Rangel bill and it is 
under

[[Page 27494]]

the health insurance provision, and as some of my colleagues might 
expect, do not be too surprised. This is what it says: ``Not later than 
60 days after the date of enactment of this act, the Secretary of the 
Treasury, in consultation with the Secretary of Labor, shall establish 
a program under which premium assistance is created.''
  My colleagues are right. We have the Secretary of the Treasury, we 
have the Secretary in consultation with the Secretary of Labor. It 
really is a significant difference.
  Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to the 
gentlewoman from Connecticut (Mrs. Johnson), the chairman of the 
Subcommittee on Health.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, we cannot put lipstick on a 
paper and call it a lady, but we can put $25 billion additional dollars 
on the table and help people who are unemployed. A total of $37.2 
billion does make a difference in unemployment benefits, in health care 
subsidies, absolutely. And in addition to this money, there is $4.6 
billion for States to manage Medicaid costs or to put it into CHIP and 
open up CHIP for people who need affordable coverage.
  So not only is there $4.6 billion in addition to the $32 billion, but 
there is $4 billion additional money for States to either use for 
training expansion or other health care needs. They could use it for 
community health centers so more people could be covered through that 
avenue. There are all kinds of ways we can make certain that everyone 
is covered. And remember, under the Democrat alternative offered by the 
other body, the only people who got health insurance, the only people, 
now listen to this, if you represent a rural area. The only people 
under the other bill who got any health care subsidies were people who 
worked for employers who were covered by COBRA. That means if you had 
less than 20 employees, your guys did not get any help with health 
insurance, not any, zero.
  How could my colleagues hold out that their bill offered unemployment 
compensation and health insurance to those laid off as a result of this 
recession when, in fact, anyone who worked for an employer with less 
than 20 employees got zero, zero, zero, zero. That is wrong. It is not 
truthful.
  We do provide subsidies for everyone. If I work for a small employer, 
he has health insurance, I get laid off, I get 60 percent of the 
premium costs. If I work for a small employer, as many people do in my 
district, I pay 50 percent of my premiums while I am working. I get 
laid off, the government pays 60 percent of the premiums. If I work for 
a small employer who does not provide health insurance, I buy my own 
health insurance, I get laid off, I get 60 percent.
  Everyone, everyone gets unemployment compensation, 13 additional 
weeks, and flexible money to increase benefits if that is what the 
State needs, and everyone under this bill gets health insurance 
subsidies, 60 percent of premiums.
  Do not let politics prevent people from getting the help they need 
during this recession, complicated by the terrorist attack of September 
11. Put rhetoric aside. Give people real help.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  The gentleman from California, the chairman of the Committee on Ways 
and Means, referred to the Rangel bill. The gentlewoman from 
Connecticut referred to the Rangel bill. The only people that do not 
refer to the Rangel bill is the majority in the Committee on Rules that 
denied us the opportunity to discuss the Rangel bill. So all we have is 
the so-called Thomas bill.
  But if we really get past the first page of the bill that we wanted 
to have as a substitute, that we wanted to debate, that we wanted to 
see which one was the best so we have options, yes, we start off, I say 
to the gentleman from California (Mr. Thomas), on page 44 with the 
Secretary of the Treasury. But then we go to 45, 46, 47, 48, 49, 50, 
51, 52, and all up to 54. This is what we call a program.

                              {time}  0100

  Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr. 
Levin).
  Mr. LEVIN. Mr. Speaker, I beg to differ with the chairman. This 
matter started on the wrong foot. If they expect a bipartisan product, 
start on a bipartisan basis in the House of Representatives.
  They did not do that. Instead, they put together a bill on a strictly 
partisan basis. They put together a bill that was heavily taxed, had a 
slender amount of attention to unemployment comp and health insurance, 
and then they say it is the Senate's fault. I beg to differ. The 
President endorsed the strategy that they adopted; and now they are 
bearing the fruits, the bitter fruits of a flawed strategy.
  If Members want a bipartisan bill, start on a bipartisan basis in the 
House of Representatives. They have not done that. So now they come 
back with a bill that they say is better than the terrible bill, they 
do not say terrible, but better than the bill that they passed here 
loaded with tax breaks for the few and gave crumbs to the many who were 
unemployed, and they parade this as something that is very strong.
  Health insurance under their bill, for most, they have to be drawing 
unemployment comp to get any help with health insurance. Two-thirds of 
the people in this country who are laid off do not get unemployment 
compensation.
  They talk about $37 billion. Many of those billions of dollars in 
unemployment comp are Reed Act monies. They have been told, do not 
count $9 billion, because at the most a few billion will be used in the 
first year. Most of that money cannot be used to change unemployment 
comp because the legislatures are out of session, so under their bill, 
so many millions of the unemployed in this country will get zero help 
from their bill.
  If Members want a bipartisan bill, start in the House of 
Representatives. Do not blame Tom Daschle or the Democrats. The fault 
lies with the Republican majority in the U.S. House of Representatives.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Texas (Mr. Sam Johnson), someone who sits in the unique 
position of being not only on the Committee on Ways and Means, but a 
subcommittee chair on the Committee on Education and the Workforce, and 
I think he has a clear perspective on the problem in front of us.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, what was just said is totally 
out of line. We are providing health care to people. Americans want 
action and they want it now, and for the second time in 2 months 
Republicans in the House have passed a bill to stimulate the economy 
and get Americans back to work.
  This bill does strike a bipartisan compromise, and it provides health 
insurance and benefits to those who lost their jobs. Unemployed workers 
and their families need extra assistance in order to afford health care 
coverage after they lose their jobs.
  In addition, dislocated workers need access to job training programs, 
child care, transportation, and other assistance in order to get back 
to work quickly. That is what we are talking about is creating jobs.
  National emergency grants which are in this bill are the right 
approach. It allows each Governor to implement a seamless package of 
assistance for the needs of dislocated workers in their State. 
Importantly, it recognizes that a displaced worker's true goal 
ultimately is the right to return to work. It gives people more of 
their own money back, and it provides incentives to businesses to 
invest in new equipment and create new jobs.
  Mr. Speaker, the Members know there is $14 billion, $14 billion going 
to low-income workers. There are stimulus payments. Also, the bill 
includes national emergency grants, which I just talked about, which I 
introduced, that target workers who are laid off by paying part of 
their health insurance.
  Can Members believe this: this government is going to pay 60 percent 
of the health insurance costs of laid-off workers. It makes no 
difference whether or not they had health care insurance when they were 
employed, we are paying it to the unemployed.
  The bottom line is this: the American people want, need, and deserve

[[Page 27495]]

help, and it is time for one Senator to stop running for President.


                             Point of Order

  Mr. FRANK. Point of order, Mr. Speaker. Point of order, Mr. Speaker.
  The SPEAKER pro tempore (Mr. LaTourette). The gentleman from 
Massachusetts will state his point of order.
  Mr. FRANK. Mr. Speaker, I am a non-fan of the rule which says we 
shall not denigrate the Senate, but as long as it is on the books, it 
has to be enforced.
  The gentleman's comments were blatantly out of order in 
characterizing the motives of a Member of the Senate. Either we are 
going to have this rule and enforce it, or we are not going to have it. 
I would be glad not to be bound by it. But simply announcing after 
Members have violated it that we wish they had remembered it is not 
appropriately enforcing the rules.
  If we are going to have the rule that says clearly that we cannot 
talk about the Senate in that fashion, then we should enforce it or 
else let us get rid of it.
  The SPEAKER pro tempore. The gentleman from Massachusetts is correct. 
As the Chair said several times during the course of both of the rules 
and now during a debate on this bill, it is not appropriate under 
clause 1 of rule XVII of the Rules of the House to characterize the 
action or the inaction of the other body; and further, it is not 
appropriate to make such reference to any individual Member of the 
other body during the course of the debate.


                        Parliamentary Inquiries

  Mr. FRANK. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. FRANK. Would it not be appropriate for the Speaker, when such 
violations happen, to prevent the violation, rather than simply comment 
on it after the fact?
  The SPEAKER pro tempore. The gentleman is correct. The Chair may take 
the initiative in the appropriate case.
  Mr. THOMAS. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman will state his parliamentary 
inquiry.
  Mr. THOMAS. To understand the import of that dialogue, if someone on 
the floor now was to indicate that the Senate has not passed a bill, 
that would be in violation of the rule; is that correct?
  The SPEAKER pro tempore. The gentleman is not correct. As the Chair 
read the rule before, a factual statement of action or inaction 
relative to the Senate is appropriate when it comes during debate on a 
matter under consideration in the House.
  Mr. THOMAS. So saying that the Senate did not pass a stimulus bill 
would not be in violation of the rule? I thank the Chair.
  The SPEAKER pro tempore. The comment to which the Chair took 
exception earlier was an observation that the Senate had not done its 
job. That is not appropriate. Indicating that the Senate has not passed 
a bill is appropriate. Making reference to any individual Senator is 
not appropriate.
  The Chair would indicate that he will attempt to be more vigilant as 
these matters occur and will interrupt Members, should there be a 
continuing violation.
  Mr. RANGEL. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. RANGEL. Could a Member state that a bill before the House did not 
go before the Committee on Ways and Means and never had hearings? Is 
that proper to debate on the floor?
  The SPEAKER pro tempore. That is a proper matter for debate.
  Mr. RANGEL. I thank the Speaker.
  Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. 
Cardin), a member of the committee who has worked hard to protect the 
rights of those people who are unemployed.
  Mr. CARDIN. Mr. Speaker, the legislation that is before us should be 
judged on two bases: first, does it really stimulate our economy; and 
second, what does it do for unemployed workers?
  I would suggest that on both of these standards, the legislation 
fails and should be rejected. First, it will not stimulate our economy. 
Two-thirds of the relief provided in this bill will not occur during 
the critical first year of this legislation, the year in which we are 
trying to stimulate the economy. We run the real risk of further 
deficits hurting our economy.
  This bill also fails because it will not help the unemployed worker. 
It falls grossly short on the changes on the unemployment insurance. 
Currently, only one-third to 40 percent of the people who are 
unemployed in this Nation get any unemployment insurance benefits, any 
at all. The legislation before us will do nothing to correct that.
  We had suggested that we take the stakeholders of the unemployment 
insurance system's recommendation and include part-time workers, and 
include the most recent wage quarter, so those people who have left 
welfare, who are now working and who may lose their jobs can collect 
unemployment insurance.
  But no, the legislation before us does not incorporate those 
suggestions. Instead, we make early Reed Act distributions. That is 
Federal unemployment funds going to our States. Yet, the Congressional 
Budget Office says only 5 percent of those funds would be used by the 
State legislatures to improve benefits. So it does not provide any help 
for the unemployed, or very little help for the unemployed.
  We had suggested, why not increase the benefits? That would stimulate 
the economy and be the right thing to do. But no, the legislation 
before us does not do that. Instead, it was supposed to include tax 
relief for unemployment insurance benefits, but now even that has been 
removed from the bill. That would at least have provided some help. 
That has now been taken out of the legislation.
  We told the people who have lost their jobs that we were going to 
help them. We told them when we passed the airline bill, and we did not 
act. We told them when we passed the insurance bill that we would help 
the unemployed worker, and we have not taken any action. We told them 
when we passed the trade bill that we would help the unemployed worker, 
and still no action.
  Now we all understand that this bill has no chance of being enacted, 
another broken promise to millions of unemployed workers. Mr. Speaker, 
let us reject the bill that is before us, and let us come together as a 
united body so we can really help those who have lost their jobs with 
the benefits they deserve.
  Mr. Speaker, I have two primary objections to this bill as it relates 
to unemployed Americans. First, it does not do enough to help the 
jobless. And second, the legislation holds displaced workers hostage to 
an additional round of huge tax breaks.
  The bill before us would not improve unemployment coverage for low-
wage and part-time workers, despite findings from the General 
Accounting Office that low-wage workers are only half as likely to 
receive unemployment assistance compared to workers with higher 
earnings. The Chairman of the Ways and Means Committee has suggested 
the Reed Act distributions in the bill would address that concern. 
However, the Congressional Budget Office estimates that only 5 percent 
of the Reed Act money provided by this legislation would be used to 
expand coverage or increase benefits in FY 2002. In addition, a recent 
survey of State UI directors indicates that the vast majority of them 
do not believe their States would expand UI coverage with the bill's 
Reed Act distributions.
  I am not opposed to providing Federal assistance to State 
unemployment trust funds, but it is simply not accurate to suggest that 
such a step will dramatically expand unemployment coverage. There are 
few simple and relatively modest steps we could take to improve 
coverage, such as counting a displaced worker's most recent wages when 
determining UI eligibility, but this bill does not include such 
reforms. The measure also fails to increase unemployment benefits--a 
step that would provide immediate stimulus to our economy by sending 
more money to families who need it and who will spend it quickly.
  At one point, Chairman Thomas suggested temporarily suspending income 
taxes on UI benefits. While I believe an increase in the unemployment 
benefit level is a better approach (because it would provide benefits 
more quickly and more inclusively than suspending taxes

[[Page 27496]]

on UI), the original Thomas plan at least acknowledged the need to 
boost the value of unemployment benefits. However, even the proposed 
suspension of taxes on UI benefits has been dropped from this 
legislation.
  Beyond the specific limitations of this bill, I have a more general 
concern about a process that will doom assistance to unemployed workers 
unless Congress also passes a new round of budget-busting tax breaks. 
How many times have we heard promises that the unemployed would be 
helped--after the airline bill--after the insurance bill--and mostly 
recently during the consideration of the trade bill. But today the 
House is going to pass provisions on displaced workers as part of a 
larger tax bill that we all know cannot pass the other body in its 
current form. The final result will be one more broken promise to 
millions of unemployed Americans.
  At a time when cynicism of government is actually declining, let us 
not break the faith with the Americans who need us the most. If we 
cannot come together on a larger stimulus package, then we should agree 
on a package of assistance for displaced workers. The unemployed have 
been promised help again and again. It is now time to deliver. And it 
is time to choose responsible governing over political posturing.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, perhaps the gentleman fails to remember, I know it was 
sometime ago, that we passed on the floor a Trade Adjustment Assistance 
Act. We said that since the events of 9-11 were so similar, that we 
attached a rider which provided $23 billion focused directly on those 
people who lost their jobs associated with 9-11 and the decision by the 
government to ground the airlines, and to make other decisions which 
disrupted business.
  I know since the Senate has not acted on that legislation that the 
gentleman may have forgotten that, once again, the House responded 
almost immediately with direct aid. This bill contains more than 9 
billion additional dollars for unemployment. It says that we are 
putting 13 weeks of additional unemployment out there for those who 
need it, and the date for that being available will be moved back to 
March 15. That is in the bill, as well.
  If the gentleman does not believe that is adequate, that is his 
opinion. To say that we have done nothing, I believe, is a gross 
overstatement. If he would look at the legislation passed by this House 
and sent over to the Senate, perhaps the gentleman was concerned about 
the fact that the Senate has sent us no legislation dealing with those 
issues that we sent them.
  Mr. McCRERY. Mr. Speaker, will the gentleman yield?
  Mr. THOMAS. I yield to the gentleman from Louisiana.
  Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding to me.
  Also, the previous speaker characterized the Reed Act transfers as 
being of very little help to the unemployed. The fact is that States 
can use Reed Act transfers immediately to help the unemployed find a 
job. Some of the unemployed might consider that help.
  So I just wanted to make clear that the Reed Act transfers can be 
used immediately for that purpose.
  Mr. RANGEL. Mr. Speaker, I yield 30 seconds to the gentleman from 
Maryland (Mr. Cardin) to respond.
  Mr. CARDIN. I thank the gentleman for yielding time to me, Mr. 
Speaker.
  Let me point out, they can only use the money if they are in session 
and they pass legislation improving the unemployment system. There are 
limitations as to how the States can use it, the Reed money.
  Let me point out to my friend, the gentleman from California, we said 
that when we passed the airline bill that we would help the airline 
workers. The day after we passed the bill, we saw massive layoffs of 
airline workers. We have not done one thing to help them with their 
unemployment benefits.
  I agree that we should do something, so let us separate out the 
unemployment insurance provisions. Let us separate that out and not put 
it in with the controversial provisions. Let us at least get something 
done for the unemployed worker. But instead, they want to put it all 
together, knowing nothing is going to happen.
  Mr. THOMAS. Mr. Speaker, I yield 30 seconds to the gentleman from 
Louisiana (Mr. McCrery).
  Mr. McCRERY. Mr. Speaker, I do not think my friend, the gentleman 
from Maryland, meant to characterize the Reed Act transfers as he did 
because he quickly corrected himself to say, well, there are limits on 
how they can use those.
  First, he said the legislatures have to go back into session to use 
the Reed Act transfers. That is incorrect. Current law allows the 
States to use the Reed Act transfers within some limits, yes; but they 
can use those immediately upon transfer.
  Mr. CARDIN. Mr. Speaker, will the gentleman yield?
  Mr. McCRERY. I yield to the gentleman from Maryland.
  Mr. CARDIN. Mr. Speaker, I would ask the gentleman from Louisiana 
(Mr. McCrery), could they use it to increase benefits without the State 
legislature meeting?
  Mr. McCRERY. No. But reclaiming my time, they can use it to help the 
unemployed find a job. It is called unemployment job services.
  Mr. RANGEL. Mr. Speaker, it is my honor and pleasure to yield 3 
minutes to the gentleman from Michigan (Mr. Dingell), a former chairman 
of the Committee on Commerce and the ranking Democrat.

                              {time}  0115

  Mr. DINGELL. Mr. Speaker, it is a good time to bring it up. It is 
late at night. This kind of cynical legislation should be brought up in 
the dark because people are not going to want to see this kind of sorry 
display take place.
  First of all, this is a rather shameful piece of legislation. It is a 
fine compendium of giveaways to special interests on which there is 
neither economic nor moral justice.
  The bill promises laid off workers a lot of help but then squeezes 
them into a kind of weird situation where they cannot get it. It gives 
tax credits to people who do not have any money who are going to have 
to wait for a year to file an income tax, and then get their refund, 
and then to maybe go out and get the money that they have to have now 
to buy the unemployed health care program that this bill supposedly 
sets up.
  Does that make sense? I hardly think so.
  Now, the Republicans are talking about how this is going to give us a 
bill that is going to go to the Senate. The Senate is not going to take 
up this sorry piece of legislation. And on top of that, it is illusion 
at best. The program of grants that are given to the governors are, in 
fact, taken away from categorical programs. And it is interesting to 
note that those programs, the Republicans do not even know how they are 
going to go to work. And they said, well, we are going to have to find 
in one discussion, they said, we are going to have to find out how we 
are going to create some sort of national calamity that will create the 
need for putting money into some of the States that are losing money.
  Now, I am sure with the innovation that they have, if there is a 
Republican governor that that might occur; but then again, it might 
not.
  In any event, the simple fact is that the unemployed who are 
supposedly getting health care under this are not. They are getting a 
tax credit which they will not be able to cash in until such time as 
they have, in fact, filed a return. And if they have not filed a 
return, they are not going to get anything. And if they have not gotten 
any money coming back, they probably are not going to get anything 
either. So it is all fraud. It is all sham. It is all illusion. It is, 
in fact, a thinly disguised tax cut for the rich for the world to do.
  And I can understand that the stimulus that the Republicans are 
talking about is a stimulus for their fat cat Republican friends. It is 
essentially a repealer, believe it or not, of the alternative minimum 
tax going back for years to take care of their buddies.
  Now, I recognize in an election year that probably makes good sense 
but it is hard to defend morally and it is hard, indeed, to justify on 
the basis of economics. It is also something which is not going to 
become law this year. The unemployed are not going to get

[[Page 27497]]

the health care benefits that my Republican colleagues are talking 
about. And the end result is that this is just an exercise in 
frustration and illusion and delusion and deceit.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I tell my friend I have great admiration for the 
gentleman from Michigan (Mr. Dingell). But this health insurance plan 
was devised by someone who proudly calls himself a compassionate 
conservative, and the description the gentleman just provided is simply 
flat out wrong. It is an advancable refundable credit. They get it 
immediately. They do not have to wait until the end of the year. It is 
not based upon one's income. And it is not something that the gentleman 
described.
  As I said, I have a great deal of admiration for him. But his three 
minutes were used to describe something that is not in our bill and it 
simply was wrong.
  Mr. Speaker, I yield 2 minutes 30 seconds to the gentleman from 
Michigan (Mr. Camp), a member of the committee.
  Mr. CAMP. Mr. Speaker, I thank the chairman for yielding me time. And 
I also thank the chairman for pointing out that the advance payment 
structure gives immediate help to the unemployed.
  But this bill is not only a vehicle to create jobs and help the 
unemployed, but, unlike my friend from Michigan characterizes, this 
bill, it is an agent of compassion. The victims of the terrorist 
attacks in New York and anthrax and Oklahoma City will receive tax 
relief under this package from death taxes and incomes. There is that 
provision that would allow charitable organizations to give immediately 
to those families who lost loved ones in these attacks so they do not 
have to fill out all the cumbersome paperwork that the charities are 
demanding to meet their need requirement, so that the families will not 
be humiliated by going to charity after charity to fill out paperwork 
after paperwork.
  This bill fixes that provision. This bill helps those families and 
will help them get the assistance they need. Many of them lost their 
breadwinners. I think it is very, very important that we get this 
provision passed.
  The proposal also provides more than $9 billion in extended 
unemployment benefits available in any State. My State of Michigan 
would get an additional 12 percent in funding in unemployment, 
injecting more than $340 million badly needed in my home State of 
Michigan to those who need it.
  Nationally, workers who have exhausted their benefits will get an 
additional 13 weeks. Unemployment benefits generally last for 26 weeks, 
so for a total of 39 weeks of unemployment. Nationwide an estimated 3 
million workers will receive these benefits averaging about $230 per 
week. These benefits would be 100 percent Federally funded, unlike 
under the regular extended benefits where States have to pick up 50 
percent of the cost.
  The health insurance provisions provide a health insurance tax credit 
which covers every displaced worker, whether or not they had employer 
provided insurance. Many employers in Michigan have small businesses 
and this will be especially helpful to those employers. And for those 
employees who had coverage for at least a year, they must be sold a 
policy. There can be no preexisting condition.
  I have heard many Members say that there is no chance of this bill 
being enacted, and I would say if more Members on the other side would 
vote for this bill, there would be a chance for this bill being 
enacted.
  There is also an additional $4 billion in emergency block grants to 
be used for health care services and worker retraining. These are all 
funds that are much needed for our unemployed workers and for our 
States to help implement those programs. I urge a yes vote on this 
bill.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the chairman of the committee in response to a question 
that was raised by the former chairman of the Committee on Energy and 
Commerce was asking well, what does one do with a tax credit? Where 
does one take it? How does one convert this into health insurance? What 
does one do if one got a disability? And the distinguished gentleman 
from California (Mr. Thomas) said that the gentleman from Michigan (Mr. 
Dingell) did not understand because under his bill, under his program 
it was an advanced refundable tax credit.
  Well, I tell Members this, when Members get back home and people ask 
questions, Members had better staple the gentleman from California's 
(Mr. Thomas) press release to their response. Because I said it before 
and I say it again, the total Republican Thomas health plan is on page 
100. There is nothing in this bill about any refundable tax credit. 
There is nothing in here about anything except what some people who did 
not like the Secretary of Treasury 2 weeks ago now find him to be the 
Secretary of Health and the Secretary of the Unemployed.
  But I tell Members, if they want to find out where to find the 
refundable tax credits, which makes sense to me, they had better check 
with the Secretary of Treasury.
  Now, a person who knows about health and who helped to draft this 
program because he is a doctor and he did not refer to the Secretary of 
Treasury, is the gentleman from Washington (Dr. McDermott), a senior 
member of the Committee on Ways and Means.
  Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. 
McDermott).
  Mr. McDERMOTT. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding me time.
  Looking at this bill makes me think of the Enron Corporation. 
Republican handling of the economy in this House has been just like 
Enron. We start the year with a $5.6 trillion surplus, and 12 months 
later we are broke, and we are borrowing to give tax credits and tax 
cuts around the country. Sounds just like Enron to me. Fortune 500, 
broke at the end of the year.
  How did they do it? Well, they gave big stock options and whatnot to 
their board of directors. So did you. You gave a tax credit of 1.3 or 
1.8 or 2 billion, who knows exactly what it was, or 2 trillion, and 
ultimately you have disseminated our whole base in this country.
  Now we come along again, you blow the bottom of the tax, the lock 
box. We do not have any pensions left, just like Enron. They have 
18,000 people out in with nothing because of their fiscal management 
and that is more of the same in this bill. But the part that is really 
irritating is this whole health question.
  Now, there is nobody on this floor who has ever been broke, I guess, 
or they have forgotten what it was like not to have money. We all make 
$11,000 a month. Now, just imagine if we suddenly were without 
employment. And we were getting the average benefit for unemployment in 
this country which is $224 a week. That is a little less than $900 a 
month. Going from $11,000, right, down to $900.
  Now, we got to still pay the house mortgage, right? That is easy. And 
the next thing is we want to have a little food, right? And then we 
want to go pay for your health care benefits. Now, we are going to get 
60 percent of the premium from the government. We just have got to come 
up with 40 percent of it, right? How many of us think that we would be 
able to pay for our rent and pay for our food, and put clothes on our 
kids' backs and put gas in the car while we look for a job and pay 40 
percent of our health care benefit?
  This is a fraud. I do not care how many dollars you put in it, it is 
not going to be any good to give a guy a voucher for, I do not know, 
$600 and say, okay, go out now and find yourself a health insurance 
plan. Because he hasn't got the other means to put with it to pay for 
it. It is simply a fraud.
  You are not guaranteeing health benefits to anybody. You could have 
done something. You could have said let us put them all in the 
Medicaid. That would be one way. You would guarantee they had some 
health care. Or you could allow them to buy into Medicare as has been 
suggested for people between 65 and 50. Let them buy in.

[[Page 27498]]

But you do not want to give anybody a guaranteed program. You want to 
throw them into the free enterprise system and say, good luck. It is a 
fraud and it should be defeated.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  The gentleman failed to tell anyone that if they are actually under 
the COBRA program they can take the certificate, they can go to the 
unemployment office. As they get the registration for unemployment, 
they apply it to COBRA. That certainly is available. There are those 
people who have health insurance who actually pay for it out of their 
pocket. They, now, when they are unemployed, get 60 percent of every 
dollar subsidized. They already have health insurance. They continue 
that health insurance.
  The gentleman seems to believe there is only one way to solve the 
problem when the American worker has been scrambling around for a 
number of years because, depending on whether your employer provides it 
or not, you may or may not have health insurance. This guarantees if 
you get health insurance, whether you had it at your employer's place 
or not. We simply cover more people than they do. I think that is why 
they are squirming a little bit.
  Mr. Speaker, I yield 30 seconds to the gentleman from Louisiana (Mr. 
McCrery).
  Mr. McCRERY. Mr. Speaker, with respect to my good friend from 
Washington's (Mr. McDermott) comments, I agree that people who go from 
a job to being unemployed and on unemployment insurance have a tough 
time meeting their mortgage payments and so on.
  So in this compromise bill we are considering tonight, in the first 
time of the history of the United States, we are offering the 
unemployed a 60 percent subsidy for their health insurance. The 
gentleman says that they will not use it. Well, the experts who we hire 
around here to look at these things and estimate how much a proposal 
will cost have estimated it will cost $13 billion, so somebody is going 
to take advantage of it.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Well, I am at a disadvantage, Mr. Speaker, because I cannot keep up 
with the gentleman from California (Mr. Thomas). He is making up this 
thing as he goes along and he refuses to refer to what page.
  First of all, the whole idea that we cover less people, we have 
information from the Health Department to indicate we cover 5 million 
under COBRA, and we cover up to 3.8 million on the Medicaid, and he 
only covers 3.3 tax credits under his so called health bill. And if he 
has figures to contradict this, I will eat it on the House floor. So 
much for that.
  But the interesting thing as to when one goes to the unemployment 
office and they go there with their credit and they do all of these 
things, sounds exciting to me, but I refer you to page 100. That is not 
on page 100. The total program is that you got to find Secretary 
O'Neill and ask him what you do. Do not ask the chairman of the 
Committee on Ways and Means.
  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) indicated in his opening remarks 
that this is sort of like a compromise, sort of like a conference 
committee report. Well, it is sort of like it is not.

                              {time}  0130

  The fact of the matter is the only good part of the bill is it is as 
dead as the first you passed, which is even worse.
  Now, one of the big hangups between the other body and the House 
Republicans was not the corporate tax giveaways, totaling some $60 
billion for this year; but it was a few billion dollars for the 
unemployed and those who are losing their health care. And I say to the 
gentleman from California (Mr. Thomas), what you have in this bill is 
woefully inadequate. If we can throw $60 billion at the corporations 
and the high-income folks, we can do better for those people who have 
lost their jobs and have lost their health care.
  And so the other body, and the gentleman from New York (Mr. Rangel), 
and our negotiators were going to swallow hard on the corporate stuff. 
We will give you the $60 billion, but we want a better shake for the 
unemployed. And you guys said, you cannot have a better shake, this is 
all we are giving you.
  And then what really squelched the deal was your insistence on health 
tax credits. Some might say, well, why are they so hung up on it? Well, 
Mr. Speaker, here is why. Here is a quote from the chairman of the 
Committee on Ways and Means in an article dated March of 1999, where he 
indicates, ``We will offer a bill this year to jettison the entire 
employer-based insurance system and replace it with a system of 
individual tax breaks.''
  So it did not happen in 1999, but it is happening today, and this is 
the start of it. Instead of expanding an existing program, COBRA, and 
giving a better break to workers, what my colleagues are doing is 
saying we are insisting on these tax credits because the next step, my 
friend, is to replace employer-sponsored health care with the same type 
of a tax credit. Now, you can say, no, that is not my quote, I do not 
remember that, but the chairman has said this four or five times, and I 
have the exact quotes each time.
  Remember the old Medicare program? They had a good idea over there 
about making it better and giving our seniors a Medicare HMO. And since 
that happened, 800 million seniors who joined up have quit it. It is a 
bad deal. It is a failed experiment. And so now my friends on the 
Republican side, after helping our seniors, are out to help working men 
and women by jettisoning employer-based health care.
  That is what this debate is all about. I am glad this bill is DOA, if 
it ever gets over to the Senate.
  Mr. THOMAS. Mr. Speaker, I yield myself 15 seconds. I am pleased the 
gentleman believes this program in this bill is mine, because it is an 
excellent bill. It is in fact the President's plan. The administration 
has worked out the structure, and this is President Bush's response for 
those in need.
  Those people who have COBRA are able to utilize COBRA. But those who 
believe that that is a bit expensive when they are unemployed are 
provided additional options. And I think the President has done an 
excellent job in responding to those in need.
  Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Florida 
(Mr. Shaw), the chairman of the Subcommittee on Social Security of the 
Committee on Ways and Means.
  Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this 
time. People watching this debate have to be somewhat confused at this 
particular time, but let us bring everything back to earth and see 
exactly where we are at this particular time in the debate.
  Right here in Washington right now it is 1:30 in the morning. 
Comments have been made as to the lateness of the hour. Much of the 
lateness of the hour has been caused by the failed negotiations between 
this body and the other body in order to try to work something out.
  Unfortunately, I have to agree with the previous speaker that this 
may be dead on arrival when it is received in the other body. But if it 
is not acted upon, then certain things will not be addressed by this 
Congress and signed into law by this President; such things as the 
extension of unemployment compensation for 13 weeks. That is important. 
That is important to the people who are without jobs, and it may not be 
enough.
  The gentleman from Washington was talking about, well, this was some 
kind of a big deal. Well, it is if you are out of work. Health care. 
The Federal Government helping to pay health care costs and health care 
insurance for those that have lost their insurance because of the loss 
of their jobs, since March. That is the right thing to do. If it is not 
taken up by the other body, it will not happen. Such things as 
accelerated depreciation and things that are going to bring about 
capital investment by the private sector are not

[[Page 27499]]

going to happen unless this is taken up by the other body. And as a 
result there will be more layoffs.
  What we are trying to do is to stimulate the economy. This body has 
already passed a stimulus bill that has languished in the other body. 
They have seen fit not to take it up. We have tried to negotiate with 
them with a phantom bill, one they do not have; and we have failed and 
they have failed. Now is the time for us to pass this bill. Over 50 
percent of it goes to individuals, not businesses.
  This is a bill that is compassionate, it cares, it stimulates the 
economy, and it does exactly what this body should do, and that is care 
about the unemployed and those who have lost their jobs.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaTourette). The Chair would indicate to 
Members that the use of the word ``languish'' is probably not 
appropriate in referring to the inaction or action of the other body.
  Mr. RANGEL. Mr. Speaker, I ask unanimous consent that if the other 
side does not refer to their health bill any further this evening, I 
will stop embarrassing them.
  The SPEAKER pro tempore. The gentleman has not stated a correct 
unanimous consent request.
  Mr. RANGEL. Well, having heard the objection, then I must continue.
  Mr. Speaker, I yield myself such time as I may consume, and let me 
first start off by apologizing to the gentleman from California (Mr. 
Thomas). All evening I have been calling it the Thomas health bill, 
since I thought he drafted it. But his response to the gentleman from 
Michigan (Mr. Kleczka) was that this was not his bill at all, it was 
the President's bill.
  So maybe we ought to get unanimous consent to substitute, if we want 
to find out what is in the bill, the President, instead of the 
Secretary of the Treasury. Because there is only one sentence in this 
bill that deals with health care, and that is ``the Secretary shall 
establish the program.'' So if this is not the program of the gentleman 
from California (Mr. Thomas), I apologize. Mr. President, we owe you an 
apology too.
  Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. 
Lewis), a vital member of the Committee on Ways and Means.
  Mr. LEWIS of Georgia. Mr. Speaker, I want to thank my friend, the 
ranking member, for yielding me this time.
  Mr. Speaker, this proposed stimulus package is not good for the 
economy. It is not good for unemployed workers and their families. It 
is not good for America. This bill is only good for the big 
contributors to the last Bush campaign, big companies like Enron, a top 
contributor to President Bush and the Republican Party. The only thing 
this bill is going to stimulate is more campaign contributions.
  This legislation is the result of an illicit relationship between the 
Republican Party and large campaign contributors. This bill never faced 
the spotlight in the Committee on Ways and Means. It was conceived in 
darkness and born in the den of inequity.
  I say again this bill is not good for the economy, and it is not good 
for America. We should send this bill back to where it came from, back 
to the bosom of Chairman Thomas and the Republican leadership.
  I urge my colleagues to vote against this bill. It would not help the 
economy. We should be working together on a bipartisan package that 
helps average working Americans, those who need it most. We should be 
working on an economic stimulus package that America deserves and 
deserves now, and not this Thomas bill.
  Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Ryan), a member of the Committee on Ways and Means who 
has contributed significantly in helping us shape this package so that 
we can actually get the country moving again.
  Mr. RYAN of Wisconsin. Mr. Speaker, let us put all the theatrics 
aside. We are at war, we have a national emergency and homeland 
security on our hands, and we are in a recession. So speaker after 
speaker is coming down to the well playing partisan politics.
  Let us talk about what this bill actually does. This bill has two 
important goals: one, help the people who have lost their jobs with 
their health insurance and with unemployment compensation at an 
unprecedented level; and, second, and most importantly, let us help get 
people back to work.
  What this bill does is recognize what has gone wrong with this 
economy. We now know officially that we are in a recession and that 
this recession started in March. And we do know that the recession did 
not come from a decline in consumption but a decline in investment. We 
have lost 1.3 million manufacturing jobs in America in the last 14 
months.
  In my own home State of Wisconsin, we have lost 29,900 manufacturing 
jobs in the last 14 months. This bill injects $89 billion of investment 
stimulus in the economy this year.
  What we are trying to say is this: Americans, employers, we want you 
to put your capital at risk. We want to give you incentives to go back 
and hire people, put them back on the payroll, invest in America, 
reinvest in your company and create jobs. What we are trying to do is 
use what has worked time and time again when we have conducted these 
policies in America before, and that is make it easier for our 
employers to keep being employers, to invest in America, to grow new 
jobs.
  We know for a fact that this bill will stimulate the economy. It will 
bring people back to work, and it will help those people who are 
looking for their jobs get other jobs. That is what this is all about.
  Let us put the partisan shenanigans aside, cut to the brass tacks, 
pass this bill, and hope we can pass this in the other body, because 
that is what our constituents deserve.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume to 
say to the gentleman from Wisconsin that as soon as he can find what 
page in the bill all these advance refundable credits are, any of these 
credits, since he worked so hard on it, it must be in the bill 
someplace, but whenever he finds that, he can rely on me to give him a 
minute to show it to the rest of us.
  Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Mrs. 
Thurman).
  Mrs. THURMAN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  To the speaker before me, let us not forget that we just did in July 
a $1.3 trillion stimulus package. We did $40 billion for recovery and 
relief, we did $15 billion for the airline industry, and we are doing a 
defense bill that will put money into the economy.
  Let us talk about the Republican stimulus proposal for just a little 
while. The GOP plans to exclude, and I might add that many women in 
this category, part-timers, temporary workers, and workers who have not 
worked in the same job for long enough, some by the way might even be 
some of those welfare mothers that the gentleman talked about so 
eloquently, so if they do not get 13 weeks, or they do not get 
unemployment compensation now, they certainly are not going to get 13 
weeks of extended unemployment compensation.
  The refundable tax credit for health insurance premiums. I hear the 
rhetoric that is being talked about. But guess what, if they do not 
have the money, whether it is today or whether at the end of the year, 
they do not have the money to buy this insurance, and it does not 
matter whether they get a tax credit.
  And I might say to my colleague that he might want to think about 
what the governors are saying. Paul Patton from Kentucky says, ``If 
Congress is serious about a stimulus package, they need to help States. 
A temporary increase in the Federal share for Medicaid is the right 
step to take.''
  Now, according to CBO, up to 9 million displaced workers would 
receive relief under the Democratic plan, 5.1 million under COBRA, and 
up to 3.8 million under Medicaid. The Republican plan only provides 
assistance to 3.35 million.
  But let me just remind my colleagues of a story in Florida recently. 
We had

[[Page 27500]]

a legislature that had to go into a special session because they could 
not meet their needs. The fact of the matter is, what they had to do is 
to reduce their spending, and they had to delay their promised tax cuts 
because our constitution requires the State to have a balanced budget. 
Where are the people tonight who voted for a balanced budget amendment 
to our constitution?
  I would suggest to my colleagues that you are sending us down the 
wrong path.

                              {time}  0145

  Mr. THOMAS. Mr. Speaker, I yield myself such time as I might consume.
  I might remind the gentlewoman that under their program, the numbers 
that she quoted in terms of the number of people that they cover 
include people who voluntarily retire, people who voluntarily leave 
their jobs, not that they were distressed or lost their jobs. It seems 
to me that that is a significant expansion.
  What we are trying to do are help people in need, not extend to it 
people who make a voluntary decision. We are worried about the people 
who lost their jobs involuntarily.
  Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to the 
gentlewoman from Washington (Ms. Dunn), a member of the Committee on 
Ways and Means.
  Ms. DUNN. Mr. Speaker, 5,000 Boeing workers were laid off in 
Washington State last week. Yesterday Selectron closed their plant, 
laying off 345 people. Nordstrom has laid off 900 people. Thirty-eight 
thousand people, that is the number of how many honest, hardworking 
Washington State residents have been laid off this year and are now 
struggling to hold their families together during a tough holiday 
season.
  Yesterday my State's unemployment rate surged to 7 percent, the 
highest since 1995. What has been the reaction of the United States 
Senate to this news? Inaction.
  Two months ago the House passed a fair and balanced bill that 
provided business incentives to help our economy and to create jobs. It 
provided assistance to displaced workers for income and for health 
insurance; $257 million of that would have come into Washington State. 
Two months have lapsed and what has the Senate done? Nothing.
  We were told that we needed to do more for displaced workers and for 
their incomes. We agreed and we added an additional 13 weeks of 
unemployment benefits.
  We were told that we needed to do more for displaced workers health 
care. We agreed and we added $13 billion in health care assistance.
  In all, between health care coverage and employment assistance, we 
went from $12 billion to $37 billion. Now, though, we are being told 
that there are no disagreements with the new funds that are being 
added, but with the method of delivery.
  This is an argument, Mr. Speaker, that is lost on the American 
people. Families right now simply want the peace of mind that their 
children are going to be cared for and that we are going to be able to 
help them cover an injury or illness.
  We are now being told that individual tax cuts should not be part of 
any stimulus package. Why? Because a teacher in Belleview, Washington, 
who pays a 27 percent tax rate is considered rich. This teacher, who 
earns a salary of $30,000, who cannot even afford housing near the 
school district, and she has to commute up to an hour just to get to 
class every morning, she is considered rich by the Senators who have 
failed to act.
  Mr. Speaker, in my State, 660,000 people will be helped by this 
provision. I think it is time for the Senate to give up and to stop 
making excuses for their inaction.


                announcement by the speaker pro tempore

  The SPEAKER pro tempore (Mr. Thornberry). The gentlewoman will 
suspend.
  The Chair would again remind all Members not to characterize action 
or inaction of the Senate.
  The gentlewoman may continue.
  Ms. DUNN. Mr. Speaker, my commitment to the people I represent is to 
make sure that the economic security bill we pass will boost our 
economy and will provide, at the same time, help for displaced workers 
and stimulate the economy, but if the Senate fails to act again, Mr. 
Speaker, we must explore every avenue, congressional and 
administrative, to bring assistance to those in need.
  I support this bill, and I hope everybody will vote for this bill. We 
help my Washington State workers and their own at the same time.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the hardworking 
gentlewoman from Ohio (Ms. Kaptur).
  Ms. KAPTUR. Mr. Speaker, I thank my beloved colleague the gentleman 
from New York (Mr. Rangel), the distinguished ranking member of the 
Committee on Ways and Means, for yielding me the time, and I rise in 
strong opposition.
  This is not a bill. It is a raid. First, it is a $260 billion raid on 
Social Security and Medicare. Yes, tax cuts for the super rich gut the 
lock box, and it holds the unemployed hostage for tax cuts to the 
Fortune 500 that are not even required to invest the dollars in 
America; $1.4 billion more to IBM; $671 million to GE that has not 
created a manufacturing job in this country in over a decade.
  With American troops at war, sacrificing themselves, five of the top 
corporate tax evaders walk away with over $100 million, and they are in 
the energy business like discredited Enron that has both hands out. By 
golly, their CEO, Ken Lay, he is laughing all the way to the bank with 
the $200 million he took out of the deal, and in fact, he should pay at 
the 38 percent tax rate. I would not mind if we taxed him at the 50 
percent rate to pay for all the unemployed people he put out of work.
  Let me just say, we ought to think what Bill Natcher, our colleague, 
used to tell us, think about it America. Vote no on this Republican 
trickle down raid on the public Treasury.
  Mr. THOMAS. Mr. Speaker, I yield myself 10 seconds to tell the 
gentlewoman from Ohio (Ms. Kaptur) that a no vote on this would deny 
her fellow Ohioans $406 million additional on just the $9 billion in 
this program for unemployment insurance, and the decision is hers.
  Mr. Speaker, it is my pleasure to yield 2 minutes to the gentleman 
from California (Mr. Herger).
  Mr. HERGER. Mr. Speaker, I rise in strong support of the economic 
security and worker assistance package. This legislation will give our 
economy an urgently needed boost and will provide displaced workers 
with additional financial assistance in these uncertain economic times.
  Specifically, this bill will allow Americans to keep more of their 
hard earned dollars by deducing the 27 percent tax rate to 25 percent 
beginning in 2002. This legislation will encourage new business 
investment by allowing companies to more quickly recover the cost of 
their investments, allowing small businesses to expense more of their 
equipment purchases.
  In all, this legislation will inject nearly $90 billion of economic 
stimulus into our economy next year. This package also provides 
significant new assistance to unemployed workers.
  Under the proposal, displaced workers will receive up to 13 weeks of 
extended unemployment benefits, and an additional $9 billion in surplus 
Federal unemployment funds will be made available to States.
  As chairman of the Subcommittee on Human Resources, I want to thank 
the gentleman from California (Mr. Thomas) for all his hard work in 
this area. This bill is a carefully crafted compromise, supported by a 
number of centrist Senate Democrats and is a result of weeks of 
negotiation.
  Mr. Speaker, let us pass this bill and send a message to the Senate 
and the Senate Democrat leadership, which has refused to pass this 
legislation, that the American economy and American workers cannot wait 
any longer, and that it is time to act and act now.
  Mr. RANGEL. Mr. Speaker, I would just like to thank my friend, the 
gentleman from California (Mr. Herger)

[[Page 27501]]

for not referring to the nonexisting health program for the unemployed.
  Mr. Speaker, I yield 1 minute to the gentleman from Maine (Mr. 
Allen).
  Mr. ALLEN. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding me the time.
  Mr. Speaker, this bill is the product of negotiations of the House 
Republicans with themselves. In our system, a remarkably ineffective 
way of making law.
  They cannot seem to give up writing big checks to big corporations. 
Take, for example, the alternative minimum tax. It is not repealed 
retroactively as in the first Republican bill. Under this bill, 
corporations get only $13 billion in several smaller checks and not all 
at once.
  The gentlewoman from Connecticut said that the unemployed will get 
$30 billion. We think it is about half that amount. Compare that number 
to the cost of this bill over 5 years, $260 billion.
  While most States right now are facing desperate situations with 
respect to their own finances, the bonus depreciation provision will 
reduce State government revenues by $5 billion a year for each of the 
next 3 years. Tell that to your governors.
  Rarely have we heard so much talk about the unemployed and so little 
help for them.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 3 minutes to the 
gentleman from Ohio (Mr. Portman), a member of the committee.
  Mr. PORTMAN. Mr. Speaker, let us back up for a second and talk about 
why we are here. Let us remind ourselves of the fact that we are in a 
recession. The economy was already hurting before September 11, and it 
is in a whole lot worse shape now. Eight hundred thousand people we 
believe have lost their jobs since September 11. Businesses are 
shutting down, mostly small businesses, and people are hurting because 
people are unemployed.
  We are trying in a good faith effort to deal with that and to protect 
people's jobs and help jump start this economy. That is what this is 
all about. We can do it tonight.
  For starters, this package provides needed stimulus to the economy by 
giving people more money to spend so they can get out and spend more 
money. We heard earlier people care about consumers. I have heard 
tonight on the floor that this is all about the super rich; that it is 
all about fat cats, those are quotes, tax cuts for the rich. Tell me 
where they are. Is it the $13 billion that is going out to people who 
did not get checks over the summer and the fall, the $300, $500, and 
$600 checks? Are they the fat cats? They are at the low end of the 
economic scale. They need that money. They can use it right now. They 
will spend it.
  Is it lowering the taxes from 27 percent to 25 percent? These are 
people making $27,000 a year up to about $67,000 a year. Are these the 
super rich? Are these the fat cats? Are these the folks who I have 
heard about tonight on the floor? I do not think so.
  I do not where these tax cuts for the super rich are. These folks are 
not super rich. These are the folks who need the money and they need it 
now.
  Yes, there are some things to help companies to retain and grow jobs, 
and those include allowing businesses to immediately expense things so 
they can go out and buy them. Thirty percent are meeting expensing.
  Yes, the alternative minimum tax makes no sense. It is 
countercyclical. It hurts companies at a time when the economy is not 
doing well. Half of America's companies were paying alternative minimum 
tax during the last recession. It hurts jobs.
  There is nothing retroactive in here. It is all prospective, and it 
is going to help jobs, and that is why we are doing it.
  We also need to help people who are already unemployed. Ohio gets 
$406 million out of this to help the unemployed. The health insurance 
provisions are very good. I am looking at page 100. I am also looking 
back to page 93, 94 and 95 and 96 and 97 and so on up to page 108. 
There is a lot of good stuff in here about it, and what it says to me, 
it says my colleagues are selling people short.
  They can figure out this program. They go to the unemployment office, 
they get a certificate, they go out and get their health care. Most of 
them are going to get it through the employer-based system. I do not 
know where this paranoia comes that we are somehow destroying the 
employer-based system through this plan. No analysis I have seen, 
nobody who is objective, who looks at this thinks that most people will 
not get it through the employer-based system. The employers are 
providing health care now. They can use a certificate for that.
  The point is that you cover more workers because if you do not get 
the employer-based health care, you can go out and use the certificate 
in the private market to get health care if you do not have it now. We 
may cover fewer people, but we cover more people who are unemployed and 
uninsured, and that is the point, is it not? That is where the 
resources ought to be directed. That is what this is all about.
  This economic stimulus package is going to help put people back to 
work. It is going to help people who are already out of work, and it is 
going to get this economy going again. We have an opportunity to do 
something big tonight, which is send a message to the other body and 
get this done for the American people.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I may end up apologizing to my friend on the committee because he is 
a good friend of the President, and so this is the President's program, 
and so my colleague flipped through those pages a little fast here, but 
I will yield him 30 seconds to tell me how does a person with a tax 
credit and no job and no tax liability, what do they do and where do 
they go, and he can just refer to one of those pages that he flipped, 
and if he does not know, he can call the President and I will give him 
time when he comes back.
  Mr. PORTMAN. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield 30 seconds to the gentleman from Ohio (Mr. 
Portman) to tell me what page is this on.
  Mr. PORTMAN. Mr. Speaker, this is a very interesting idea, because 
this actually came out of the Democratic Leadership Council, as well as 
the President of the United States, as well as people on both sides of 
the aisle here. No one person has a monopoly on this idea.
  Mr. RANGEL. Mr. Speaker, if the gentleman will yield, where does the 
person go, to the Democratic Council?
  Mr. PORTMAN. No. It is a great program because you get the 
certificate and you use it. Do not sell people short. They can figure 
this out.

                              {time}  0200

  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Sherman).
  Mr. SHERMAN. Mr. Speaker, I bring you another Christmas story. Long 
ago, many highly profitable corporations paid zero in Federal income 
tax. Ebenezer Scrooge rejoiced. But the American people insisted that 
we pass a corporate alternative minimum tax so that no matter what 
loopholes a profitable corporation exploited, it still had to pay a 
minimum tax of 20 percent of its economic income.
  Today, Ebenezer cynically dresses as Santa Claus. He is pretending to 
bring relief for Tiny Tim. But actually he is delivering the virtual 
repeal of the corporate alternative minimum tax, delivering presents to 
the largest and richest corporations in America. In doing so, he will 
take $13 billion away from Social Security and imperil the retirement 
of Mr. Cratchit.
  Bah, humbug.
  Mr. THOMAS. Mr. Speaker, it is indeed my pleasure to yield 2 minutes 
to the gentleman from Arizona (Mr. Hayworth), a member of the 
committee.
  Mr. HAYWORTH. Mr. Speaker, I would caution us all, with the severity 
of the challenge our Nation faces, with the fact that we are a people 
at war who were wantonly and brutally attacked on September 11, to 
continue to preen and posture and play games in the hopes of providing 
what in some twisted way must be thought of as a clever soundbite does 
a disservice to

[[Page 27502]]

people who are out of work, to people who are hurting, to people who 
need health insurance, to people who need this unemployment, money that 
has been set aside where we have tried to work in good faith.
  People can talk about the lateness of the hour. People can try to use 
misguided tales of Scrooge. The tragedy is for all the talk of 
compassion, my friends, if you set aside this last best opportunity to 
help these people, then you have turned your back on them. And then you 
have taken on the mantle of those you claim to attack and not to 
support. You have taken on the mantle of Scrooge. We cannot have that 
tonight. We cannot have this type of posturing and preening. Let us put 
the people in front of the politics. You may disagree with us on many 
matters. We have tried to come halfway and find a plan that can work at 
the behest of our President.
  The American people deserve this opportunity. Do not turn your back 
on the people, for if you do so, you will ensure that this holiday is 
one that lacks prosperity and you will ensure that you are not doing 
your part to add to goodwill and a constructive, united front in the 
face of a massive war effort.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the hard-working 
gentlewoman from Florida (Ms. Brown).
  Ms. BROWN of Florida. Mr. Speaker, as we pause for the holiday, the 
loyal opposition party is bent on giving out huge handouts for their 
country club friends for Christmas. Meanwhile, most Americans, 
especially minorities, go on suffering the economic consequences of 9-
11.
  In concentrating on passing tax cuts, trade bills and stimulus 
packages for the rich, this House, which is supposed to be the people's 
house, continues to allow the big dogs to eat first. In fact, right 
now, they are the only dogs that are doing the eating.
  More workers lost their jobs in October than any other time in the 
last 10 years. And what is their response? Pass a tax cut, pass a tax 
cut, pass a tax cut.
  This country needs a stimulus bill that provides money for jobs 
training, economic development, and real health care. In closing, let 
me just say one thing. Thank God for the other body and hold the line 
for the American people. Hold the line.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Thornberry). The Chair would remind all 
Members not to urge action or inaction of the other body.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Oklahoma (Mr. Watkins) who does not believe we ought to 
hold the line and deny people help when people need that help.
  Mr. WATKINS of Oklahoma. Mr. Speaker, I know the night has been long 
for all of us. But to my colleagues, let me say this night is not near 
as long as many years ago when our Native Americans were forced by our 
government to travel from the east coast over 1,200 miles to the Indian 
Territory. Those were long winter nights and many of them died. Thirty-
seven States have Indian reservations. California has the greatest 
population of Native Americans. Oklahoma has the highest per capita and 
the second largest population, but 37 States.
  This is not a rich bill. This also extends a Native American tax 
credit, a wage tax credit and also accelerated depreciation. It works. 
It works because let me say I have personally experienced helping bring 
industry into those areas, because I was raised with the Native 
Americans. It is not a rich man's, a rich person's bill. If you have 
any compassion at all for those who have the worst economic conditions, 
the highest unemployment, the highest underemployment, the highest 
outmigration, those with the greatest social problems, of drug problems 
and also of alcoholism, if you want to lift them up, this can do it. I 
know because just last Saturday, I broke ground on a $700 million power 
generation plant that employs hundreds and hundreds of people, many of 
them with Native American backgrounds. I also know it works because I 
was going to be home Friday to break ground on a second $65 million 
operation at the headquarters of the Choctaw Indians in my area of my 
boyhood home county where I was raised with the Choctaws.
  Let me say to my colleagues, please do not overlook these forgotten 
Native Americans. This bill will help lift them out of their problems 
into a better way of life.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from New 
York (Mr. Nadler).
  Mr. NADLER. Mr. Speaker, with Christmas just around the corner, the 
Republican leadership is once again handing out its presents to the 
large corporations. That might not be so bad if there were any economic 
value to this so-called stimulus bill. We should be putting money into 
the hands of people most likely to spend it, the unemployed and those 
people living paycheck to paycheck. Instead, this bill would give 
billions to corporations, hoping they will make products for people who 
do not have the money to buy the products. That is not stimulus, that 
is corporate giveaway.
  Even the portions of the bill directed toward rebuilding New York are 
a disappointment. They are simply the same tax incentives that we 
passed just last week on the victims tax relief bill. As I noted then, 
while we welcome these measures in aiding our long-term economic 
revitalization, they do not provide the immediate relief that New York 
desperately needs. My distinguished colleague, the gentleman from New 
York (Mr. Rangel), has a substitute that has just what we need today.
  In particular, he would address the devastation our small businesses 
are facing now. The gentleman from New York's provisions would help 
small businesses survive the transitional period until Lower Manhattan 
is rebuilt and larger businesses return to the area. Only then will 
their customers return. But this bill just tells them to wait a few 
years. By then it will be too late.
  Mr. Speaker, this bill is nothing new. It follows the tired old 
Republican script, provide as much money to the wealthy and to the 
large corporations as possible and then claim there is not enough for 
the people who really need it.
  Vote ``no'' on this irresponsible bill.
  Mr. THOMAS. Mr. Speaker, I yield myself 10 seconds. The gentleman 
from New York really does need to know that out of the $9 billion, New 
York gets half a billion; out of the block grant alone, New York gets 
another half a billion; and out of that victims tax relief, New York 
gets another $5 billion. Even a New Yorker would recognize that a 
billion here, a billion there, finally adds up to real money.
  Mr. Speaker, it is my pleasure to yield 2 minutes to the gentleman 
from Pennsylvania (Mr. English), a valued member of the Committee on 
Ways and Means.
  Mr. ENGLISH. Mr. Speaker, American workers need help now. We know 
that from my district in northwestern Pennsylvania, and we know that 
from the experience around the country. The legislation before us 
brings a total of 37 billion new dollars in new benefits for unemployed 
workers, including 13 extra weeks of additional unemployment benefits. 
This is a critical initiative that we must pass now. With this bill, 
the House has made an effort to respond to the needs of the American 
worker during the current slowdown. But in doing so, we have also 
insisted that a stimulus package must be just that, a stimulus, that 
will return our struggling economy back to a growth path.
  The single best way to jump-start our sputtering economy today is to 
allow companies to quickly recapture the money that they invest in 
capital. We know that huge additional amounts of business capital 
investment are critical to restart the economy. This bill includes an 
expensing provision that is no corporate giveaway. It rewards companies 
that make concrete entrepreneurial investments. We know that 
productivity is spurred by investment in innovative capital equipment. 
The sooner manufacturers can recapture the cost of their equipment, the 
faster they can create and maintain good-paying jobs. Workers not only 
need a better safety net as provided in this

[[Page 27503]]

bill, but they need to be able to hold on to their jobs. Yes, workers 
want help when they are unemployed; but more importantly they want a 
good-paying, stable job. This bill stimulates the economy to make that 
possible.
  This is a well-balanced bill that addresses both the human needs and 
the investment needs of this recession and will help many individuals 
and employers who are bearing the brunt of a slowdown that started last 
year. We must put partisan differences aside and unite behind this pro-
growth, pro-jobs, pro-worker economic program to get America's economy 
growing again.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Connecticut (Ms. DeLauro), who is a special assistant to the minority 
leader.
  Ms. DeLAURO. Mr. Speaker, I rise in strong opposition to this bill. 
It does not help our economy and little to help those who are hurt by 
the economy.
  Times are tough for American families. Unemployment rates are the 
highest that they have been in nearly a decade. States are facing 
severe budget shortfalls. Families need to know that if they lose their 
jobs that their unemployment benefits will be secure and they will have 
a way to continue health coverage. This body needs to pass an economic 
stimulus package that helps the economy get moving, which assists 
families during difficult times.
  I ask my colleagues on the other side of the aisle, where have you 
been for the last 3 months? This bill and your past actions have done 
nothing to help those families. This bill does not include unemployment 
benefit increases. It does not guarantee access to affordable health 
care coverage. What it does include is a big helping hand to the 
Republicans' wealthiest contributors by refunding the corporate minimum 
tax, without any real benefits to the economy or to consumers.
  This body has bailed out the insurance companies, it has bailed out 
the airline industry, and where it has come to the working men and 
women of this country, you have dragged your feet. And now, weeks and 
months later, the Republicans are trying to pass a bill that is simply 
unconscionable. There is no other word for this Republican economic 
package than greed. It is an unpatriotic grab on the public treasury.
  I urge my colleagues to vote ``no'' on this bill. This leadership 
needs to be seriously engaged in negotiations to produce a plan that 
will truly help the economy and truly help the families in this 
country.

                              {time}  0215

  You have paid not a shred, not a shred of attention, to what has 
happened to working Americans, and it is a sham tonight to hear you 
talk about working Americans and what their plight is.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I was not aware that one party had a monopoly on 
compassion for people in need.
  Mr. Speaker, it is my pleasure to yield 3 minutes to the gentleman 
from Missouri (Mr. Hulshof), a member of the committee.
  Mr. HULSHOF. Mr. Speaker, I do not intend to invoke the wrath of the 
Chair by mentioning the other body. I do not intend, in fact, to focus 
my comments except for on those colleagues who are actually considering 
the merits of the bill. Not those, for instance, who say they are in 
favor of free trade, but then vote against a free trade bill; not 
against those who say they want some sort of stimulus, but then do 
everything they can to prevent that stimulus from happening.
  What I would like to do is ask a simple question. My colleague, the 
gentleman from Ohio (Mr. Portman), asked this question earlier, and I 
ask it again: Why are we here?
  The answer to that question I think can be found in a videotape that 
was released last week of a dinner in Afghanistan when Osama bin Laden 
boasted to his dinner companions that the attack on September 11 
exceeded his wildest expectations. Yes, those terrorists went into 
those Twin Towers in Lower Manhattan, but they did not intend for those 
towers of commerce to topple. But they did.
  Along with that, our economy has been rocked. Even the Democratic 
former Secretary of Treasury has said that we were teetering on a 
recession, but clearly we are in that recession now. This is a bill 
that addresses the needs of our economy now. It helps rebuild that 
sagging economy.
  Some of the statements on the floor have been just blatantly wrong. 
Certainly every person is entitled to his or her own opinion, but no 
one is entitled to his own set of facts, and the facts are these: There 
is an immediate stimulus in this bill.
  My friend from Maryland said that there was no immediate stimulus. We 
are going to have $90 billion over the next 9 months if this bill were 
to become law.
  My friend from Florida says that the governors have complained. My 
own Governor from the State of Missouri has complained that if this 
bill were passed, that Missouri would be harmed. We have $8.6 billion 
for Medicaid reimbursements and other grants so that States are held 
harmless.
  In addition to boosting consumer confidence, we accepted an idea, a 
constructive idea, from the other side, a $14 billion income 
supplement, even if you do not pay income taxes. We boost investor 
confidence to small business owners, a short-term incentive to invest 
in equipment. Those laid-off workers, this bill is three times more 
generous than the bill this House passed a few weeks ago.
  For Members who are interested in the policy, Mr. Speaker, inaction 
is not an option. For Members of this body who are purely interested in 
politics, however, I say this: A ``no'' vote means an extended 
recession. The blood of that extended recession will be on your hands. 
I urge a ``yes'' vote.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the hard-working 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I almost rise to a point of 
being speechless on the last comments being made about the blood being 
on our hands. For that I will take more time. For, in fact, what a 
tragic statement.
  This is not a stimulus package. This is a raid on the Treasury, for 
those whose hands are out and in your pockets. The American people are 
hurting and the American people are being laid off every single day, 
and what the American people need is what the Democrats have offered, 
not a sham of an extension of 13 weeks. They need a full loaf of 26 
weeks of unemployment insurance, a whole year, because we have not a 
recession, we have almost a depression. And the stimulus or the tax cut 
that you gave us just a few months ago did not work.
  What the American people need now is to have real coverage of health 
insurance, not a worthless tax credit that those who are broke and 
unemployed with no money will not have the ability to be able to use 
those dollars.
  We have millions of dollars of worthless tax cuts that are raiding 
Social Security, and we are also taking money from equipment by 30 
percent depreciation.
  Mr. Speaker, let me just say: This is a raid on the Treasury. We need 
real legislation. This is a worthless bill, and we need to defeat it.
  Mr. THOMAS. Mr. Speaker, I yield myself 10 seconds.
  Mr. Speaker, I find it ironic that I am in receipt of a letter dated 
December 5 which the gentlewoman from Texas's signature is on which 
urges the gentleman from Illinois (Speaker Hastert) to include the $9.2 
billion accelerated redact distribution contained in the bill.
  Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to the 
gentleman from Illinois (Mr. Weller), a valued member of the committee.
  Mr. WELLER. Mr. Speaker, my home State of Illinois had bad news this 
week. Like many communities across America, one of our Nation's largest 
employers, Motorola, headquartered in Illinois, announced they were 
going to lay off 8,900 workers yesterday; 8,900 men and women who had 
to come home to their families and tell their children they no longer 
had a job. Motorola is just one major employer who has already lost 
one-third of their employees through layoffs in the past year.

[[Page 27504]]

  Nationwide we have seen 800,000 workers who have lost their jobs, 
8,000 a week, since the terrorist attack on September 11. That is why 
we are here tonight, because we want to help these American workers. I 
want to help these American workers. My Republican colleagues want to 
help these American workers. My hope is my Democratic colleagues will 
join with us in helping these American workers who have lost their 
jobs.
  Frankly, I think we all want these workers to have the opportunity to 
go back to work, because every good hard-working American deserves an 
opportunity to work.
  Let us remember one basic economic fact, and that is that investment 
creates jobs, investment grows the economy. Our bipartisan legislation 
that is before us rewards investment. The 30 percent expensing, the 
accelerated depreciation, rewards investment; investment in computers, 
investment in pickup trucks, investment in machinery and other 
equipment. Let us remember that when an employer purchases this type of 
equipment, there is an employee that makes this type of equipment, as 
well as is required to operate it. That creates jobs.
  We also have to recognize that there are American companies losing 
money this year, and they need investment capital. That is why the NOL 
carry-back, the 5-year opportunity to go back and recover from a 
profitable year some extra money that can be invested this year in 
creating jobs, again rewards investment.
  The bottom line is we want to reward investment, we want to create 
jobs. This is an opportunity for us to work together. Frankly, it is a 
bipartisan bill. My hope is our Democratic friends will set aside their 
rhetoric and work to help the American worker.
  Let us pass this bill. We need economic security. We need to help 
workers. Let us support this legislation. My hope is the other body 
will take it up.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
California (Ms. Pelosi), our new and dynamic minority whip.
  Ms. PELOSI. Mr. Speaker, I thank the gentleman for yielding me time 
in his capacity as ranking member and for his leadership in fighting 
this ill-advised bill.
  Mr. Speaker, Christmas is coming, the goose is getting fat; pleased 
to put a penny in the old man's hat. That is what this bill reminds me 
of tonight.
  Corporate America, because of this bill, which puts tax breaks for 
corporations over assistance to unemployed workers, says to America's 
families, Bah, humbug.
  The Director of the Office of Management and Budget has predicted 
that we will face deficits through the rest of the Bush presidency. 
During the previous administration, years of fiscal responsibility had 
built a strong economy and a significant surplus. Now the surplus is 
gone. More than half of the lost surplus is directly linked to the Bush 
tax cut.
  Despite this result, Republicans insist that further tax breaks make 
up the bulk of any stimulus package, refusing to provide additional 
unemployment and health benefits to displaced workers unless Democrats 
agree to give huge tax cuts to corporations.
  The goose is getting fatter; pleased to put a penny in the old man's 
hat.
  Throughout the economic stimulus negotiations, the Democratic 
position has been simple: Put unemployed workers first. But the 
Republicans have refused. They have refused to increase unemployment 
insurance benefits; they have refused to expand health insurance for 
unemployed workers who had been employed part-time or on a temporary 
basis; they have refused to provide sufficient resources for displaced 
workers to purchase health insurance in the private market.
  Mr. Speaker, this is really a tragedy, because in the course of the 
budget negotiations earlier this year, the House Committee on the 
Budget and Senate Budget Committee on a bipartisan basis agreed that in 
order to be effective, the stimulus package must be short-term, provide 
a quick boost to the economy and not sacrifice our long-term fiscal 
stability.
  This stimulus package fails on all three fronts, it fails America's 
unemployed workers and it fails America's families. I urge a no vote on 
this.
  Mr. THOMAS. Mr. Speaker, I yield myself 10 seconds.
  Mr. Speaker. Under the temporary State Health Care Assistance of $4.6 
billion grant, California out of that $4.6 billion would get $482 
million. Out of the $9 billion on the unemployment insurance, 
California alone would get over $1 billion. That, to me, is real help 
to real people in need.
  Mr. Speaker, it is my pleasure to yield 3 minutes to the gentleman 
from Iowa (Mr. Nussle), the chairman of the Committee on the Budget and 
a valued member of the Committee on Ways and Means.
  Mr. NUSSLE. Mr. Speaker, I thank the gentleman for yielding me time.
  Mr. Speaker, the distinguished minority whip just mentioned the fact 
that we had this big surplus going into this year. What happened to it?
  Well, of course, the Democrats love to blame the Bush tax cut. The 
fact of the matter is, as we all know, only $35 billion went out the 
door in the tax cut for this particular year. So where did the rest of 
it go? Where did the rest of the $100 billion go that the gentlewoman 
talked about?
  Is it possible that that had to do with Osama bin Laden? Is it 
possible that is the deepening of the pre-attack economic recession? Is 
it possible that is what happens when terrorism strikes America? Is it 
possible that you can put aside your rhetoric for just one moment and 
take a look at the facts, as opposed to just trying to blame people in 
the dead of night?
  Because do you know what is going to happen? Blaming people in the 
dead of night probably is not any more effective than trying to pass 
legislation in the dead of night. But one thing will be alive in the 
morning, and that is the action that happens. Actions will speak louder 
than words.
  When we were hit with terrorism, we passed an emergency bill. When we 
had to fight a war in a bipartisan way, we funded the military. But 
when it came to dealing with the recession, actions speak louder than 
words.
  The House acted. The House put forward a stimulus bill. The House put 
forward ideas and plans. But where has action come from any other place 
in this Capitol? Unfortunately, we have not seen much. In fact, it is 
easy to talk about page 100 in the Republican bill. There is not even a 
bill to talk about in the other body, page 100 or page 1.
  So, you can debate action, but when everything is said and done 
tonight, you are going to be voting on all of these different 
provisions, and you are going to have one opportunity to help New York, 
you are going to have one opportunity to help the victims of this 
attack, you are going to have one opportunity to deal with this 
recession, and that one opportunity will be lost if you continue to 
vote no.
  I believe that this instance will be a test for this Congress, and 
the question will be when the lights come on tomorrow morning and 
people want to find out exactly what happened, they will ask the 
question, who acted and who did not?
  I am really perplexed by the fact that we have been hearing all 
tonight about how the Senate has not acted. We cannot talk about that. 
We are not going to talk about that.
  Mr. RANGEL. Do not talk about that.
  Mr. NUSSLE. We are not going to talk about that. But I will talk 
about something else, and that is they cannot. It is not a matter that 
they will not, they cannot. They have not. They have not.
  Mr. RANGEL. He is talking about that.
  Mr. NUSSLE. No, I am not talking about anything. I am talking about 
they cannot. Why have they not, if they can? It is that they cannot. It 
is not that they will not.
  Mr. RANGEL. Point of order. He continues to talk about that.
  Mr. NUSSLE. I am not saying that they will not.

                              {time}  0230


                        Parliamentary Inquiries

  Mr. THOMAS. Parliamentary inquiry, Mr. Speaker.

[[Page 27505]]

  The SPEAKER pro tempore (Mr. Thornberry). The gentleman will state 
his inquiry.
  Mr. THOMAS. Mr. Speaker, can one say they have not acted? I believe 
the earlier clarification was that if one stated the fact, and the fact 
is that the Senate has not acted, that would not rise to a point of 
order.
  The SPEAKER pro tempore. The gentleman is correct. It is appropriate 
to state factually.
  Mr. THOMAS. And a factual statement is, the Senate has not acted?
  The SPEAKER pro tempore. The gentleman is correct.
  Mr. RANGEL. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman from New York will state his 
inquiry.
  Mr. RANGEL. Mr. Speaker, is it proper to state that this body, this 
Committee on Ways and Means, has not acted on this bill? Is that 
proper?
  The SPEAKER pro tempore. Yes.
  Mr. RANGEL. I thank the Speaker.
  Mr. Speaker, I yield 30 seconds to the gentlewoman from California 
(Ms. Pelosi).
  Ms. PELOSI. Mr. Speaker, I thank the gentleman for yielding me 30 
seconds to respond to the references made here.
  Mr. Speaker, I do not blame my Republican colleagues for debating 
this bill in the dark of night. It is a shame. I know why they do not 
want the American people to hear about this and what the facts are, but 
I want to address the point of the gentleman from California. He rose 
and said that there are $482.6 million in Federal funds for the 
Republican block grant that California will gain under this bill. What 
he failed to mention is that under the Democratic plan, California 
would get $722 million, a more than $240 million increase. As far as 
that point is concerned, the 53 percent of the deficit is attributed to 
the tax cut, not to September 11.
  Mr. RANGEL. Mr. Speaker, they say, what bill? It is the bill that 
they denied the opportunity for this body to debate, the Democratic 
alternative.
  Mr. THOMAS. Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I will be glad to take some of the time on 
the other side if they would like to yield it to us.
  Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Massachusetts (Mr. Frank).
  Mr. FRANK. Mr. Speaker, I agree with my Republican colleagues on one 
very important point. This bill is much, much better than the last time 
they told us that we had to pass a stimulus bill to save the economy. 
How is it better? Liberalism has broken out in that unlikely place. 
Member after Member has bragged about how much they are doing for the 
unemployed, how much they are doing with health care. All of a sudden 
the market does not work, and we have the Republicans telling us how 
much more money they are providing out of public funds.
  Well, I agree, they are trying; but like most people who are doing 
something which they really are not used to, they do not do it well, 
because what they do is compound it by adding tax cuts. The gentleman 
from Iowa is partially correct, in my judgment. There are many factors 
why the surplus that we had has become a deficit. But one thing we do 
not do is to respond by deepening that deficit by further tax cuts, 
some of which are entirely unrelated to a short-term stimulus because 
they are 2 and 3 years.
  The biggest difference between the two bills to me is yes, we do say 
we want to raise taxes over current law for people who make more than 
$300,000. The Democratic plan puts off that further rate reduction for 
people who make over $300,000 and prevents the deficit from lessening. 
The first President Bush said we could not do a lot of important 
programs because we had more will than wallet. The current President 
Bush, having inherited a wallet from Bill Clinton, was terrified that 
this might lead to real programmatic improvements, so my Republican 
colleagues are helping him throw that wallet away. That is a very 
important difference.
  Yes, they should be proud of doing much better, although not good 
enough, in trying to respond to the unemployed; but they cannot do it 
without revenues.
  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas) 
has 12 minutes remaining; the gentleman from New York (Mr. Rangel) has 
15\1/2\ minutes remaining. Who yields time?
  Does the gentleman from New York seek to yield time?
  Mr. RANGEL. Mr. Speaker, it was said that they have 12 minutes and we 
have 15\1/2\, and they are yielding to us? Okay.
  Mr. Speaker, I yield 1 minute to the gentleman from New Jersey (Mr. 
Andrews).
  Mr. ANDREWS. Mr. Speaker, I know that the unemployed people of our 
country need help and our economy needs help, and I think there is 
broad agreement on that tonight. Where there is disagreement is over 
the two-thirds of the money in this bill that is not spent this year, 
Mr. Speaker; $162 billion that does not even get spent this year. It 
has nothing to do with stimulating the economy.
  If we have learned any lesson in the last 30 years, it is that when 
we run the Federal Government by borrowing money, we destroy jobs and 
ruin the economy. This bill is as if the last 10 years never happened 
around here, because here we go again.
  This bill is going to take a quarter of $1 trillion and borrow it 
from the Social Security trust fund. Two-thirds of that money has 
nothing to do with what is going to happen in the next 12 months. It is 
simply going to run up the deficit, destroy jobs, and re-create the 
malignancy that burdened this economy and the people of this country 
for so long.
  We could make an agreement in the short run, but this bill does not 
do it. It should be opposed.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Mr. Speaker, I thank the gentleman for yielding 
me this time.
  Mr. Speaker, the song goes, we wish you a merry Christmas; good 
tidings we bring to you and your kin. That is good tidings if you are 
unemployed and you have had coverage for 12 to 18 months; it is good 
tidings if you are eligible for unemployment compensation. It is good 
tidings if you have money to pay for health care and you can come up 
with 40 percent. It is good tidings if you can find your way through 
the unemployment maze.
  The gentleman from Ohio failed to admit that in the State of Ohio, 
our Governor closed down unemployment offices, so they are going to be 
very hard to find.
  But more importantly, as we stand here talking about truth at 2:35 
a.m., the truth of the matter is that this bill does not provide all 
that it could for unemployed workers because many are left out of the 
pocket. If we really wanted to help unemployed workers, we would do one 
bill that helps unemployed workers, and then we could say to them, good 
tidings we bring to you and your kin. We are going to give you some 
money to take care of your families and your Christmas.
  Mr. RANGEL. Mr. Speaker, I yield 1 minute to the hardworking 
gentleman from New Jersey (Mr. Pallone), especially on health affairs.
  Mr. PALLONE. Mr. Speaker, the majority, the vast majority of 
Americans who are unemployed cannot afford health insurance under our 
current system. What the Democrats have proposed is so easy. We simply 
say, okay, we will pay for your COBRA benefits or, if you are not 
eligible for COBRA, we will pay for your Medicaid benefits and you will 
get comprehensive coverage.
  I think that what is happening here tonight is that the Republicans 
are so kind of wrapped up into their own idealogy, conservative 
idealogy, that they just think that what the Democrats have proposed is 
somehow a giveaway or some kind of welfare or something that is wrong 
for the American people. They should be looking at this practically in 
terms of what is actually

[[Page 27506]]

going to help people get health insurance, and that is true for 
unemployment compensation and the other aspects of this bill.
  It really irks me to hear my Republican colleagues act as if they 
want to help or do something when they know full well that by bringing 
this bill up tonight they are going to do nothing. I am going to get a 
call Friday when I go back to my district office about health 
insurance; and I am going to have to say, nothing happened in this 
House of Representatives because of the Republican leadership and 
because of their conservative, right-wing idealogy and their 
unwillingness to bend.

                               National Governors Association,

                                Washington, DC, November 26, 2001.
     Hon. Thomas A. Daschle,
     Majority Leader, U.S. Senate, the Capitol, Washington, DC.
     Hon. J. Dennis Hastert,
     Speaker, House of Representatives, the Capitol, Washington, 
         DC.
     Hon. Trent Lott,
     Minority Leader, U.S. Senate, the Capitol, Washington, DC.
     Hon. Richard A. Gephardt,
     Minority Leader, House of Representatives, the Capitol, 
         Washington, DC.
       Dear Senator Daschle, Senator Lott, Speaker Hastert, and 
     Representative Gephardt: The nation's Governors support your 
     negotiations to secure bipartisan action on an economic 
     stimulus program. As you know, the current budget shortfall 
     in states is estimated to be about $15 billion and is being 
     caused primarily by declining revenue growth and the 
     explosion in the costs of the Medicaid program. As the 
     economy continues to slow, this shortfall is expected to 
     increase to between $20 billion and $30 billion. The 
     unprecedented costs of homeland security, as well as other 
     provisions being considered as part of the stimulus package, 
     will add substantially to the growing fiscal crisis. This 
     growing state budget shortfall will continue to be a major 
     drag on economic recovery and will offset a portion of a 
     federal economic stimulus package.
       Given this fiscal stress in just about every state, the 
     nation's Governors number one priority in the economic 
     stimulus package is for a temporary increase in the federal 
     medical assistance percentage (FMAP). Our FMAP proposal, 
     which will cost about $5.5 billion, includes three major 
     provisions:
       A hold harmless provision for any state that would receive 
     a decrease in its FMAP this year;
       An across-the-board one and one-half percent increase in 
     the FMAP for every state; and
       A one and one-half percent increase in the FMAP for states 
     with higher than average unemployment.
       From a state perspective, this proposal has major 
     advantages over any other provision being considered for the 
     stimulus package. First, it provides fiscal relief for all 
     states. Second, 100 percent of the funds would be spent over 
     the next year, which is a very strong economic stimulus. 
     Third, it is extremely flexible funding. Fourth, it does not 
     require the federal government or the states to develop new 
     legislation or regulations. All other state-administered 
     programs that are being considered as part of the stimulus 
     package are targeted to specific populations or programs and 
     do little to provide fiscal relief to states.
       We appreciate the difficult task that you have in 
     negotiating a final package but we strongly urge you to build 
     on the existing federal-state partnership by including a 
     temporary increase in the FMAP in the final stimulus package. 
     The bottom line is that enactment of a temporary increase in 
     the FMAP would both offset some of the other provisions in 
     the stimulus package that would decrease state revenues and 
     dramatically reduce the drag on the economy of the growing 
     state budget shortfall.
           Sincerely,
                                                      John Engler,
                                                         Governor.
                                                   Paul E. Patton,
                                                         Governor.

  Mr. THOMAS. Mr. Speaker, it is my privilege to yield 15 seconds to 
the gentlewoman from Connecticut (Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Mr. Speaker, let me just set the record 
straight. Your bill does not pay people's COBRA benefits. It pays a 
percent of the COBRA premium, and through our bill we would pay a 
percent of the COBRA premium, and all of the rhetoric on the floor 
about how people could not afford their portion is just as big a 
problem in your bill as in ours. So do not get out there and say we pay 
the COBRA benefits.
  Mr. THOMAS. Mr. Speaker, I yield myself 30 seconds.
  Some people might think it is the late hour when they listen to the 
math on the other side of the aisle. I have to assure those who believe 
it is the late hour that, actually, they do this in daylight as well.
  I read off the amount of money that was going to California. The 
immediate retort from the gentlewoman from California was, yes, but we 
give more than you do, and yet we hear the refrain that we put 
ourselves into a deficit. Well, if we are going to double every number 
we deal with and you are telling us we put us into deficit, I think you 
ought to take a look at what you are doing as well.
  Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to the 
gentleman from Georgia (Mr. Collins), a very valuable member of the 
Committee on Ways and Means.
  Mr. COLLINS. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I have always heard that money talks and B.S. walks. Well, Mr. 
Speaker, there is enough money in this bill to talk, but there is a lot 
of rhetoric here tonight that should walk.
  Yes, there is a difference of opinion as to how this health care and 
this unemployment should be handled, but the truth of the matter is, it 
is being handled. If there are questions by constituents of how and who 
they get in touch with when it comes to their health care, I am pretty 
sure they have the number in the third district of Georgia of 
Congressman Mac Collins's office and they will call and we will be glad 
to help them.
  There is a lot of rhetoric here about this is for the rich 
corporations. The rich corporations are only a name. It is the people 
who work for those businesses that actually make up those businesses. 
But there are a lot of small businesses in this country that need help. 
I am going to tell my colleagues about one in particular. Two young men 
operating a trucking company in Jackson, Georgia, doing fairly well for 
themselves, deep in debt, a lot of expenses, a lot of overhead. They 
are working people. Their business is off because of what has happened 
recently in this economy. It is down some 25 to 30 percent.
  This particular bill, based on the tax provisions that will encourage 
people to invest capital, either into buildings or into equipment, will 
help those two young men, because someone will order some material and 
they will get to deliver it; one of their drivers will have another 
load to haul. That is how we stimulate an economy. Piece by piece, 
worker by worker. Encouraging investment.
  We are taking away something in this bill too that is in the tax 
codes that punishes people for making investments. We are reducing the 
burden of the alternative minimum tax. It is a punishment for people to 
invest, small or large. But it is not the entity; it is the people. 
People that we are trying to get back into the marketplace, back into 
the job place, and that is the best thing we can do for anyone who is 
out of work who works for an employer or who has their own health 
insurance. Get their job back. Put them back into the workplace. That 
is what will happen with this bill here.
  This is the last train leaving the station, folks. Do not fail, do 
not fail those working people at home. Small business, or if we want to 
call it the big fat cat corporations, it is whoever we want to call it, 
but it is the workers, the people that work for those entities. They 
need help
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I am so glad that the gentlewoman from Connecticut (Mrs. Johnson) is 
on the floor. No one has worked harder to provide adequate health care 
for the majority of Americans and continues to work to expand that 
coverage.
  While she does refer to our bill providing only 75 percent of COBRA 
and fails to talk about the Medicaid provisions that we have to provide 
for additional care, the truth of the matter is that there is no 
Democratic bill that we can debate. We have been denied the opportunity 
to have our substitute on the floor. But I think it is safe to say for 
those people who wondered what went on in the stimulus conference that 
we had, I think the chairman of that conference, who happens also to be 
the chairman of the Committee on Ways and Means, would agree that we

[[Page 27507]]

accomplished a lot in recognizing that we did need short-term tax 
incentives to stimulate the economy. We never challenged that.

                              {time}  0245

  We never challenged that. I think that he would also agree that in 
the area of unemployment compensation, while there was a wide gap, we 
thought if we continued to work, that even that gap could be covered.
  The major problem we had was providing health care under a new 
program that was introduced to us, we thought, by the gentleman from 
California (Mr. Thomas) and now we find out by the President, that 
would allow people to get health insurance with a credit, and if they 
had no tax liability, they would be able to negotiate with an advance 
refundable credit.
  I ask the gentlewoman from Connecticut (Mrs. Johnson), this advance 
refundable credit, it is more or less, I would suspect, some type of a 
voucher that would allow the person with no tax liability to go 
somewhere and try to get health insurance, try to negotiate for it. And 
while there would be a cap on the cost, still there is some thought 
that the program would work by allowing them to get into the system.
  What I have been saying all night is that if the gentlewoman does not 
talk about health insurance, I will not talk about page 100. But I have 
looked through this, and we were unable to find any way to make the 
credit system work in conference. One of the Senators who was in charge 
said that we should go to the President, and the White House could not 
find any way to handle it, so the way they handled it on the floor is 
to say the program does not exist in terms of what they do with advance 
refundable payment.
  I may be wrong, but all I am saying is that the only thing that I see 
that refers to how an unemployed person with no health insurance and no 
tax liability, when we ask how do they get negotiated into the system 
in order to get health insurance, it is on page 100. If there is 
another part of this bill that tells how people can really use the 
advance payment of a displaced person using this so-called credit, I 
would like the gentlewoman to refer to the page.
  Mr. Speaker, I yield 30 seconds to the gentlewoman from Connecticut 
(Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman for 
yielding time to me.
  Mr. Speaker, I did not use the 75 percent versus the 60 percent in 
the gentleman's bill, because in the gentleman's bill, he allows only 
75 percent.
  Mr. RANGEL. I do not have a bill. I am saying, in the gentlewoman's 
bill, how do they negotiate the credit?
  Mrs. JOHNSON of Connecticut. There are two questions here.
  First of all, let me answer the subsidy one. We provide 60 percent 
subsidy of the premiums, and we let people buy that plan that CRS has.
  Mr. RANGEL. But how do they get in the system? Where do they go?
  Mrs. JOHNSON of Connecticut. Here it is. When they go and apply for 
the unemployment compensation benefits, it says in the bill they 
certify they are unemployed with the Social Security number.
  Mr. RANGEL. What page?
  Mrs. JOHNSON of Connecticut. Let me finish, I will get the page in a 
minute. It says it right there.


                Announcement by the Speaker pro tempore

  The SPEAKER pro tempore (Mr. Thornberry). If the Members would 
suspend, the Chair would request that all Members yield time to one 
another and direct their comments to the Chair.
  The time is controlled by the gentleman from New York (Mr. Rangel). 
If the gentleman would like to yield time to the gentlewoman, then it 
would be the gentlewoman's time to use.
  Mr. RANGEL. I yield myself such time as I may consume.
  Mr. Speaker, if anyone can tell me how they get these credits. All I 
am saying is that I respect that the gentlewoman knows that we had a 
bill and she studied it and she would like to critique it. I only wish 
that the majority would have allowed us to bring the bill on the floor 
so it could be critiqued, one.
  Two, if we are talking about credits as a substitute for the existing 
program, the one question that I keep asking is, if they have the 
credit but no tax liability, how does a guy go to the HMO and try to 
get insurance? The answer is that the tax credit is advanced, so they 
can get it up front, they do not have to wait for the Treasury to give 
it to them. So I accept that.
  I am saying if there is this advance credit, where do they go and 
what do they do with it? The answer is that there is no answer. They 
make it up as they go along, because the Secretary of the Treasury is 
the one that is going to determine at some point in time sometime next 
year how the program works.
  But if Members are trying to find out how it works tonight on the 
floor, as we say in New York, forget about it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 30 seconds to the 
gentlewoman from Connecticut (Mrs. Johnson.)
  Mrs. JOHNSON of Connecticut. Mr. Speaker, if the gentleman will read 
page 93 to 108, he will find that a person who is noticed goes to the 
unemployment office and gets unemployment compensation and 
certification that he is eligible for unemployment compensation. He 
then gives that certification that his employer gave and is charged 
only 40 percent of the premium. The rest is collected from the employer 
from the Department of the Treasury. It is very simple.
  Now, when there is $13 billion out there, does the gentleman think 
insurance companies are not going to make it real easy to pay these 
premiums? Of course they are.
  But back to this premium thing, remember, the gentleman provides a 75 
percent premium and it is only for the most expensive plans. Seventy-
five percent of the most expensive plans, the COBRA plans, which are 
usually $400 a week, is less of a subsidy than 60 percent of the 
average premium according to the Congressional Research Service of $200 
a month. So ours is actually more generous than the gentleman's.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to 
the gentleman from Kentucky (Mr. Lewis), a member of the Committee on 
Ways and Means.
  Mr. LEWIS of Kentucky. Mr. Speaker, I thank the gentleman for 
yielding time to me.
  The basic question tonight, Mr. Speaker, is where do jobs come from. 
If the Members will indulge me, I want to give some of my personal 
experiences.
  Tonight the other side of the aisle has indulged in the old political 
rhetoric of class warfare. That is kind of getting old. It is over and 
over and over again that we hear it.
  Let me tell the Members about my history. I was born in eastern 
Kentucky in the mountains, in a log cabin. My father was a tenant 
farmer. He had to work his way up to get a card as a pipefitter in a 
union. He just retired a few years ago from that.
  He had to suffer through several recessions where he was out of work, 
and yes, we certainly appreciated the unemployment check. But number 
one and most of all, he wanted his job as soon as he could possibly get 
it back.
  I worked for a steel mill. I was a United Steelworker, belonged to 
the union. There were times that I was out of work and had to depend on 
the unemployment check. I appreciated that. But I wanted my job back.
  If I had the choice of extending my unemployment and the economy 
being stimulated through some tax credits and some tax incentives for 
the steel company I worked for, or my father would have chosen more 
unemployment or getting some stimulus into the economy where the 
construction jobs would start back up, do Members know what he would 
have chosen and what I would have chosen? I would have chosen the 
stimulus to those companies, those big, fat corporations that provided 
me a job.
  That is what we are talking about tonight: People want jobs, not 
unemployment checks. But we will help them. We want to help them. We 
want to help

[[Page 27508]]

them with health care, we want to help them with unemployment checks, 
but number one, we want to help them get their jobs back; and those 
that have jobs, to keep their jobs.
  My son, my daughter-in-law, work in a manufacturing company right 
now. If we do not do something about this economy, they are in danger 
of losing their jobs. Let us do something tonight to protect their jobs 
and put people back to work. That is what America needs.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  As I stated, Mr. Speaker, when we were in conference, we wanted to 
follow what the President had suggested and to take in consideration 
tax cuts, many of which were not liked by our side, but we thought it 
was a question of give and take. But there is one thing that we 
insisted upon, and that is that either we take everything or we take 
nothing.
  So the things that we were willing to do, some of those things we put 
in our substitute bill as an enticement in believing that if the House 
was going to be fair enough to give us an opportunity to say that we 
have a better plan, that Republicans and Democrats would have an 
opportunity to at least hear the merits of the plan, since ours had 
substantial tax cuts.
  But we just refuse to believe that the unemployed have to be held 
hostage to the tax cuts, so therefore, we insisted that until we could 
work out the differences, there would be no agreement.
  The complexity of finding an answer to how do you properly give 
coverage to unemployed people is a problem that the gentlewoman from 
Connecticut (Mrs. Johnson), the gentleman from California (Mr. Stark), 
and Members of this House have wrestled with for months and perhaps 
years. We have 44 million people without any type of insurance at all, 
and that is increasing. The recession is causing more people to become 
unemployed, and therefore, more people without insurance.
  So we struggle to find a way. The majority insisted that we discard 
the way that we have because, as the gentlewoman from Connecticut (Mrs. 
Johnson) said, it is too expensive. Others said it is a Cadillac 
system, and some said we are paying for more than people deserve 
because they are unproductive people.
  They talk about how you can get cheaper policies, and that you were 
given more. But the fact is, there is a cap on what the other people 
are giving. So given 60 percent, if you cannot afford the 40 percent, 
you are just out of insurance, because you are there to negotiate with 
an HMO that is in it for profit, and one cannot really negotiate from 
that position.
  Certainly if we can just picture for one moment that we have lost our 
jobs and that we have lost our COBRA benefits, and that what we do have 
are tax credits, can Members imagine what they, their wives, or their 
kids, would have to go? Where do they go with the credits? What do they 
do? Who do they ask?
  The gentlewoman from Connecticut (Mrs. Johnson) said people would be 
fighting for those credits. Do we wait until it is time to pay taxes 
and find out that there is no tax liability, and then get a refund? Oh, 
no, says the gentleman from California (Mr. Thomas), they do not have 
to wait. We asked, why do we not have to wait? They said, ``Because we 
have a provision.''
  What is the provision? The provision is that even before we filed the 
tax, they know we have no tax liability so they advance the refund, and 
we take that someplace and negotiate.
  We said to the gentleman from California (Mr. Thomas), that is pretty 
complicated. We do not understand how that works. He did not understand 
either, to be honest. He said, it is the President's program. So what 
did we do? We sent it over to the President. We never heard from 
anybody since.
  So I was really surprised that what I used to refer to as the Thomas 
tax credits, since the statement is attributed to him, is now the 
President's tax credit, and I still could not find how do people use 
the advance refundable credit.
  The truth of the matter is the gentleman from California (Mr. Thomas) 
did not know then, he does not know now, and it is not in the bill. He 
may be able to tell us how he would like for this to work, or he may 
talk about his newly found good relationship with the with the 
Secretary of the Treasury, or he may say, trust the President.
  But there is one thing that he is not going to be able to say, and 
that is anything concerning how to use the advance credit in order to 
get insurance, except that on page 100 and only on page 100 they say, 
check with the Secretary of the Treasury. At some time he will come up 
with some program.

                              {time}  0300

  What we had suggested is maybe you do not like COBRA. Maybe you think 
it is too expensive. Maybe you think it is too inclusive. But the whole 
idea was to do something and do it now.
  This was not supposed to provide for a permanent change in health 
delivery system. It was not a reform bill. The President did not say 
everything had to be right. Maybe some of the loopholes that we 
expanded we went too far. But he said give me something, make it 
temporary and do it now. Which meant what? We could have kept our 
system for one year, brought in Medicaid to supplement it and to make 
certain that everyone had coverage. And at least use it as a testing 
ground that if it was abused, if people was using more than they 
should, than we could get together and come up with a good Medicaid/
Medicare reform bill.
  As it is now, we are left with nothing except your imagination and 
whatever the Secretary of Treasury may come up with. And the reason we 
broke down in our negotiations is because there was no provisions there 
for refundable advanced credit for people to get insurance. There is no 
provision now, and that is why we are opposed to the bill.
  Mr. Speaker, I yield back the balance of my time.
  Mr. THOMAS. Mr. Speaker, I yield myself 30 seconds.
  The gentleman is entitled to his opinion but not his own set of 
facts. The bill did and the bill does not have a cap on the payment. 
And what the payment and what the gentleman has not really shared 
because with us is that his plan a subsidy for the COBRA program does 
not exist. Currently people who are unemployed take their own money and 
pay 102 percent of the cost. That is the structure in place. The 
gentleman's subsidy program does not exist and has not been created. 
Where it will be created is with the Secretary of the Treasury, the 
same place our program is created.
  Mr. Speaker, I yield 3 minutes to the gentleman from Oklahoma (Mr. 
Watts), the chairman of the Republican Conference.
  Mr. WATTS of Oklahoma. Mr. Speaker, I am about to share a story that 
some of my colleagues will have probably heard me share, but I am going 
to share it again because I think it is very fitting for the hour.
  Back in 1981, I was about 45 days from graduating from the University 
of Oklahoma and I had gone home one weekend to spend the weekend with 
my parents, and my father said to me as we sat up in the front room of 
his home one night until about 2:00 in the morning, and daddy and I 
solved all of America's problems according to our own opinions and 
thoughts.
  After about 3 hours of discussions he said to me, he said, Junior, I 
think I want to go to college. And I said, Daddy, why do you want to go 
to college? You are 57 years old. You are a double bypass heart 
patient. Mom has diabetes. You have these cows, this rental property. 
You are pastor of the church. Why do you want to go to college? And he 
replied to me, he said, I would like to see what makes you guys fools 
when you get out. He said, you guys seem to lose your ability to use 
common sense.
  What this package is about it is about common sense, trying to 
address the needs of the American people. Common sense should say to 
us, we have got people who are unemployed, who are without work, who 
are without health insurance benefits. Common sense should say to us, 
our moral fiber should say to us, let us address the

[[Page 27509]]

needs of these people who need this assistance. Common sense should say 
to us, we do not need more taxes. We need more taxpayers. How do you 
created more taxpayers? You allow dollars to stay in the hands of the 
people who are risking their capital in order to either sustain jobs or 
to create jobs. Now, that is common sense.
  What does this package do? This bill helps laid off workers by 
providing a generous tax credit for Americans who lost their jobs so 
they can buy health insurance. It extends unemployment benefits by 13 
weeks, 3 months. It gives small businesses help so they may create more 
jobs or help to sustain the jobs that they currently have.
  We give tax rebate checks to lower income Americans and reduce the 
income tax for middle income Americans. These are initiatives that 
achieve important goals helping these who need immediate assistance 
while creating jobs and giving a boost to the economy.
  Again, we are not proposing more new taxes or more taxes as our 
friends on the left would do because we understand that is not the way. 
I asked my colleagues to do the right thing concerning this vote, this 
bill. It is not a be-all or an end-all, but it is a solid package to 
help folks who are suffering from hard times while looking ahead to the 
future.
  Let us reject yesterday's fear and go into tomorrow with great 
confidence. Let us reject yesterday's rhetoric and go for tomorrow's 
solutions.
  Mr. Speaker, I urge my colleagues to support this bill on December 
18, or 19. What day is it? Whatever day it is, I ask my colleagues to 
support this legislation.
  Mr. THOMAS. Mr. Speaker, each day is slipping away.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from California (Mr. McKeon).
  Mr. McKEON. Mr. Speaker, I rise on behalf of the American people who 
need this stimulus package to get back to work.
  Mr. Speaker, I rise in support of H.R. 3529, the Economic Security 
and Worker Assistance Act. This important piece of legislation will 
bolster our economy in many ways, but I am particularly pleased that it 
addresses the needs of our dislocated workers and their families.
  This legislation incorporates President Bush's proposal to expand the 
existing National Emergency Grants, found within the Workforce 
Investment Act, to assist our workers. These grants complement the 
workforce development resources available in states to ensure an 
effective response to significant worker dislocation events. Currently, 
these grants are used to provide a variety of employment and training 
assistance to workers who have been laid off. These include (1) job 
training and reemployment services; (2) income support for those that 
are not eligible or have exhausted their eligibility for unemployment 
compensation, if they are enrolled in training; and, (3) supportive 
services such as transportation and child care to allow individuals to 
get back to work.
  The proposal before us today would expand the allowable supportive 
services to include temporary health care coverage premium assistance. 
A state would be required to use at least 30 percent of its grant to 
provide temporary health care coverage of its choosing. The Economic 
Security and Worker Assistance Act provides $4 billion to enhance this 
critical safety net for workers. Using the National Emergency Grant as 
a means to provide additional assistance is the right one for our 
workers and their families.
  First, it is flexible, allowing each governor to implement a seamless 
package of assistance for the needs of the dislocated workers in his or 
her state.
  Second, it can be implemented quickly since it uses an established 
mechanism to provide needed assistance without creating a new federal 
bureaucracy.
  Finally, the program is targeted and temporary. The assistance aims 
to help those affected by the economic downturn, including families 
impacted by the terrorist attacks of September 11, get back to work.
  By passing this legislation, we will keep our commitment to helping 
every worker return to work while ensuring that they and their families 
have the critical support they need at this difficult time. I encourage 
my colleagues to support America's working families and vote yes on the 
economic stimulus package.
  Mr. THOMAS. Mr. Speaker, I yield the remainder of my time to the 
gentleman from Illinois (Mr. Hastert), the Speaker of the House of 
Representatives.
  Mr. HASTERT. Mr. Speaker, first of all, this Congress has come 
through an extraordinary year, a year where a lot of us never thought 
that the challenges and problems and probably the grief that many 
Americans have faced we would have to deal with, but we did.
  I want to commend my colleagues on both sides of the aisle for facing 
up from time to time, standing tall and getting things done that were 
important to the American people. We have stood together. We have faced 
problems. We have done those things that secured this Nation. But there 
is one more problem. We also see an economic downturn. We can discuss 
why that happened. Whether it was the result of September 11 or it was 
in the mix a year ago, we do not know; but we know it is here. And we 
know when this country faces problems, this is the body that the 
American people look to to find solutions.
  And somehow from time to time we, as Americans, we, as elected people 
here, pull together our collective strength and find solutions to those 
problems. We are human, and solutions many times are not perfect.
  I remember a conversation I had with the gentleman from Missouri (Mr. 
Gephardt). He was concerned when we did the airline bill and we did a 
couple other things so that American workers were taken care of, 
because at that time there were people out of work. But today there is 
a lot more people out of work. And those people out of work are on 
unemployment compensation.
  We want to extend that unemployment compensation. This bill does it. 
It does it to the tune of $30 billion and gives these people a lot of 
hope and a lot of time to get back on their feet and to find that new 
job. The problem is, too, some of those people do not have health care. 
They do not have the COBRAs opportunity. If you have COBRA that means 
you have to go out and pay 102, 103 percent of your premium.
  We tried to find a solution to that problem too. We tried to find it 
together. In finding it together, we said there is a couple of ways to 
do this. But the way you do it quickest is give people that little 
code, that little voucher if you want to say it, I hate to use that 
word, that you can take and say here is my voucher. Here is my number. 
I am certified. Here is a check for 40 percent of my health care to 
your employer or to your insurance company, it depends on what State 
you are in. You know that. And in 38 States for people who are not 
covered by COBRA, are not in one of those big corporations, do not want 
to have one of those Cadillac health care bills, they also have the 
ability to have many COBRAs. Because you can take that there to small 
businesses that are not covered by COBRA and extends that insurance 
coverage.
  We do something else. There is another group of people out there that 
work for companies that do not offer insurance. And they have the 
ability in this bill to take that code number and a check for 40 
percent of their coverage and take it to buy where they buy insurance 
every day, whether it is down at the Main Street insurance office or 
some cooperative, people that they buy and do business with every day.
  But this bill does more than that. It also puts money in people's 
pockets. If we are going to change this economy, if we are going to 
change this system that we have today, we have to get consumer 
confidence back. And we do that.
  We also say every family in this country that works has had some type 
of security, some types of wealth that have given us a safety net, 
whether it is a 401(K) or whether it is a savings plan or it is a 
mutual funds of some kind. And almost every family since September 11 
has lost that wealth or some of that wealth.
  We are saying let us kick that market and let us get it going. Let us 
do some of those things that spur this economy and people's confidence 
of putting money back in the market. Let us bring that wealth back to 
American families, every family that has a pension or a savings account 
or a 401(k) is

[[Page 27510]]

tied to securities. We need to get that done.
  Finally, the engine in this country that creates jobs is the magic of 
people taking capital and creating wealth, taking capital and creating 
jobs, building buildings, buying machinery, investing in ideas, and you 
have to have the capital to do that. And this bill also does that and 
brings that capital into a place where people can invest it and create 
the jobs and restore this country back to where it should be.
  Now, do we do it this way or that way? Is this a perfect way? Well, I 
say it happens to be a centrist way, because folks on both sides on the 
aisle, on both sides of the rotunda have basically come together and 
said this is what we should do, and we should do it. We should do it 
for this Nation. We should do it for our people who are unemployed. We 
should do it for the victims in New York because we addressed that too. 
It is time to get it done.
  We have heard a lot of rhetoric. The hour is late. I know this has 
been a stressful couple of weeks, tempers flair and we get on edge. But 
I think as this Congress we have done a pretty good job over the years 
and over the last year, especially. I thank the Members for their help 
and support when we needed to have that.
  There is one more time that we need your help and support, not just 
us, the American people need it. Here is the solution. Here is the 
ability to do it, and now is the time to do it. I thank Members for 
their attention. I thank Members for their consideration. Let us vote 
this bill and get it done.
  Mr. SANDLIN. Mr. Speaker, I rise to oppose the misdirected economic 
stimulus plan, H.R. 3529, Economic Security and Recovery Act of 2001 
because the bill fails to balance worker assistance provisions and tax 
cuts while wrecking years of Federal fiscal discipline. The economy is 
stagnating and people with a tenuous grip on the economic ladder fear 
rising unemployment rates and health costs will cause further pain. I 
am disappointed that Congress could not come to an agreement on an 
economic stimulus package and I fault those who cling to rigid 
ideological positions as a justification for blocking compromise and 
comity. The plan we will consider today does not do enough to focus on 
the hundreds of thousands of recently unemployed Americans and enacts 
risky corporate tax cuts and rebates that would further weaken our 
fiscal health.
  Squandering an opportunity to secure health care coverage for the 
unemployed and tax reductions to encourage business growth sends the 
message to American people that Congress is not serious about economic 
recovery. Mr. Speaker, the Congress acted in a bipartisan manner to 
give the President the tools necessary to fight the war on terrorism. 
Democrats and Republicans compromised to pass legislation in the best 
interest of the country. I believe that many Democrats and Republicans 
were willing to compromise on an economic stimulus package but, 
unfortunately, ideology trumped pragmatism and common sense.
  Last spring, I voted for the $1.3 trillion tax cut advocated by 
President Bush. At the time, our budget surplus projections looked 
strong for years to come. Unlike the present legislation, that tax cut 
contained relief for working American families and allowed most 
Americans to share in the expanding economy. I have great reservations 
that the $250 billion total cost of the bill over 10 years will further 
exacerbate our fiscal picture and balloon our Federal deficit.
  In light of the September 11 tragedy, the priority of Congress and 
our country must be securing the safety of Americans from further 
terrorist attack and rooting out terrorist evil around the globe. We 
are making progress on bringing to justice those responsible for the 
terrorist attacks and our efforts will forestall future attacks. I 
believe, however, that more can be done to safeguard the American 
people and strengthen Homeland Defense. As a Member of the Blue Dog 
Coalition--a group of fiscally moderate Democrats--we proposed, as part 
of an economic stimulus plan, a homeland security component. This 
fiscally responsible initiative addresses the fundamental questions of 
strengthening our domestic security through targeted initiatives. The 
security package could also complement legislation aimed at stimulating 
the economy in the short term by providing relief for those who lost 
their jobs as a result of September 11. The proper course of action 
must focus on short-term assistance and avoid long-term business tax 
cuts that will skew our budget picture and endanger the Social Security 
trust fund.
  I believe that the components of a balanced and fiscally responsible 
stimulus plan exist and a compromise can be reached. H.R. 3529, 
however, fails both of these criteria by enacting long-term corporate 
tax reductions and rebates with dubious short-term economic benefit 
that will lead to a return of Federal budget deficits. America needs a 
shot in the arm, not a misdirected tax bill in disguise as economic 
stimulus.
  Mr. UDALL of New Mexico. Mr. Speaker, I rise today to voice my strong 
opposition to this legislation being brought forth under the guise of a 
stimulus for a sluggish economy.
  Once again, just like H.R. 3090, this sham of a stimulus bill is 
geared toward providing tax breaks to the wealthiest individuals and 
corporations in our country. Extending for an additional 5 years a tax 
break for multinational financial corporations? Cutting the 27 percent 
income tax rate to 25 percent? How many of the men and women who have 
lost their jobs because of the economic slowdown are going to benefit 
from these provisions?
  Instead of discussing ways to make sure that these individuals are 
able to afford health insurance for themselves and their families, we 
are talking, once again, about retroactive corporate tax cuts. We are 
talking about a tax cut that leaves out 75 percent of all Americans 
because they don't have high enough income to be in the 27 percent tax 
bracket.
  It was recently announced by the National Bureau of Economic Research 
that the recession began in March, yet since that time, the House of 
Representatives has not passed any legislation or committed one dime 
for worker relief.
  I urge my colleagues to oppose this shameful legislation that 
benefits only the wealthiest corporations and individuals in this great 
country; a country, Mr. Speaker, that was built on the hard-working 
shoulders of the types of men and women who are excluded from this very 
legislation. Oppose this bill.
  Mr. MOORE. Mr. Speaker, I rise in opposition to H.R. 3529, the 
Economic Security and Worker Assistance Act of 2001.
  In October, when this House debated and voted on its first stimulus 
package, I voted against both the majority proposal and the minority's 
substitute. At that time, I voiced my concern those two competing 
proposals had one deficiency in common: they both failed to effectively 
balance our Nation's priorities and needs.
  In October, our Nation was at war and I argued that never, in the 
history of this country, during a time of war, have we cut taxes or 
spent our precious resources on items unrelated to achieving our 
wartime objectives. I also argued that we had critical needs both 
domestically and globally to defeat terrorism, to protect the safety 
and security of the American people, and to assist the hundreds of 
thousands of Americans who lost their jobs as a result of the events of 
September 11.
  In October, the President called on this Congress to help our Nation 
recover from the September 11 terrorist attacks. He called on us to 
secure our airlines, to strengthen law enforcement, to give him the 
tools he needs to win the war on terrorism, and to assist those 
Americans affected by the economic consequences of the terrorist 
attacks. This Congress heard the call of the President and responded in 
a bipartisan fashion to each and every one of these needs, except for 
one--we have failed to provide for those who lost their job through no 
fault of their own.
  Mr. Speaker, since October this Congress has accomplished a lot and 
much has changed. We have secured our airlines. We have strengthened 
law enforcement and we are winning the war on terrorism. We should 
applaud the bipartisan efforts that made these accomplishments 
possible.
  Since October, however, we have witnessed other changes that should 
demonstrate to each and every one of us that there is much more to 
accomplish. We experienced first-hand the continued threat of terrorism 
in the form of anthrax and recognized our deficiencies in providing for 
our homeland security needs. We learned that the Federal Government ran 
a unified deficit of $63 billion in the first two months of this fiscal 
year. We heard from the Director of the Office of Management and Budget 
that we will face deficit spending for the remainder of the President's 
term. And, most chillingly, since October over 700,000 Americans have 
lost their jobs.
  Mr. Speaker, while much has changed since October, much remains the 
same. Our Nation is still at war, our States and municipalities are 
still at risk, and our displaced workers are still in need of 
assistance.
  This Congress' response is also the same: we are once again debating 
a bill to reduce revenues without offsets while in a time of war; we 
are debating a bill that does nothing to shore up homeland defense; we 
are debating a bill that fails to effectively respond to the

[[Page 27511]]

needs of our displaced workers; and I will continue to oppose 
legislation that fails our economy, that fails our cities and States, 
and that fails our workers.
  On December 10, I received a letter from the President calling on 
Congress to send him legislation to expand unemployment and health 
insurance benefits by the end of the year, ``regardless of the success 
or failure of any other element of the economic stimulus measures now 
pending.''
  In response to the President's call, I introduced H.R. 3471, the 
Worker Opportunity and Relief Compensation (WORC) Act, which would meet 
the pressing needs of our Nation's unemployed. Among other items, this 
bill would expand access to unemployment and extend these benefits for 
13 weeks. This bill would also provide assistance for individuals to 
help cover the cost of COBRA health insurance premiums.
  I urge my colleagues today to vote against this legislation and 
support the President and me in passing a stand-alone bill that will 
help our Nation's workers before this Congress adjourns for the year.
  Ms. WATERS. Mr. Speaker, I rise in opposition to the Republican so-
called economic stimulus plan and in support of the Democratic 
substitute. I am committed to the goals of improving the economy in 
general. I am specifically committed to providing relief to the working 
men and women of America and those who have recently lost their jobs. 
Many of these individuals did not fully realize the benefits of the 
recent economic expansion and are now being hit the hardest by this 
current downturn. I believe that it is crucial that their needs must be 
the top priority in any economic stimulus package, and any authorized 
spending should be in a form that can get it into communities as 
quickly as possible.
  I believe that true economic stimulus will be achieved by investing 
in certain existing economic development programs whose benefits far 
exceed their cost to the government. These programs invest Federal 
dollars in communities, resulting in job creation and economic growth. 
My proposal, which was adopted by the Democratic Caucus, increases 
funding to the Community Development Financial Institutions Fund, 
section 108 loan guarantees, Empowerment Zones/Enterprise Communities, 
and Community Development Block Grants.
  These proposals are based on provisions of my bill, H.R. 3033, the 
Job Creation and Economic Revitalization Act of 2001, which provides 
additional funding for current programs that invest in traditionally 
overlooked communities, creating jobs and building the economy. The 
funds allocated to these programs represent a small fraction of the 
total benefits to communities. For example, over a 2-year period, the 
CDFI awarded $114 million to organizations who, in turn, made $3.5 
billion in community development loans and investments.
  Similarly, the section 108 loan program is a very low subsidy 
program--$15 million in appropriated funds this year will yield $609 
million in loans.
  I am deeply disappointed that this economic stimulus package was not 
the product of bipartisan negotiations. This bill represents a failure 
to put aside petty partisan politics for the greater good. I strongly 
urge my colleagues to oppose this legislation and support the 
Democratic substitute.
  Mr. BECERRA. Mr. Speaker, it's deja vu all over again. Nearly 2 
months ago, the House narrowly approved a partisan, budget busting 
economic stimulus package laden with tax cuts for corporations and the 
affluent that failed to meet the dramatic needs of those suffering the 
worst effects of the current economic downturn.
  Now, here we are again, for a second-go-round with largely the same 
package of misguided tax cuts and insufficient unemployment and health 
care assistance for recently laid-off workers. On all counts--tax 
relief, emergency unemployment benefits, and health care coverage--this 
bill is inadequate and should be defeated.
  The Democratic leadership of the House and Senate have time and time 
again made good-faith, fiscally responsible offers on the tax, 
unemployment, and health care provisions in this bill. But, in each and 
every case, the White House and the Republican congressional leadership 
have resisted these attempts to reach a middle-ground and instead have 
insisted on the inclusion of their partisan proposals.
  I am extremely disappointed that my colleagues across the aisle are 
bringing up this legislation today. It is clear to me, and clear to so 
many of our constituents who desperately need the help promised to them 
by the President and Congress earlier this fall, that this bill will 
never become law in its present form. We should not be wasting either 
the time or the effort on this wholly political enterprise.
  House and Senate leaders, Republicans and Democrats alike, should 
return to the negotiating table and craft a balanced and responsible 
bill, one that stimulates the economy and deals with the immediate 
economic and healthcare needs of my constituents in Los Angeles, the 
citizens of California, and all those suffering throughout the Nation--
without threatening the Social Security and Medicare surpluses, without 
jeopardizing our ability to meet our homeland and national security 
needs, and without endangering our long-term economic recovery.
  While most others may have given up hope that such a consensus, 
bipartisan agreement can be reached, I continue to believe that it is 
possible. I say this because broad support exists for a significant 
number of provisions that could be the basis of such a bipartisan 
agreement. For example, both Republicans and Democrats have included in 
their stimulus packages language that provides for bonus depreciation, 
more generous small business expensing, extended carryback of business 
losses, and extension of several expiring tax benefits. Beyond these 
tax items, there are several others that have bipartisan support and 
would contribute to an economic turnaround, but, regrettably, were 
never considered for inclusion in the bill before us today.
  For instance, I believe the House should have considered a proposal 
to allow a life insurance company that merges with a nonlife insurance 
company to file a consolidated tax return. Congress long ago recognized 
that while an affiliated group of corporations consists of multiple 
legal entities, it is, in economic reality, a single business 
enterprise and should be permitted to file a single consolidated tax 
return so that the income and losses of the entire economic unit may be 
considered as a whole for tax purposes. However, groups that include 
life insurance companies--indeed, only such affiliated groups--are 
unable to take advantage of this common sense tax policy and cannot 
fully consolidate their income in a single tax return.
  These limitations not only add enormous and unjustifiable complexity 
to the accounting requirements of these companies, but they also hinder 
their ability to compete with other corporate financial services 
groups. Even more frustrating, these restrictions will disrupt the 
economic recovery of an industry so dramatically impacted by the 
terrorist attacks of September 11 since most corporate groups with life 
insurance affiliates will be unable to offset their losses against 
total net income from the current year or carry the losses back to 
prior years. I hold out hope that we will be able to address these 
limitations before this Congress adjourns. The time for leveling the 
playing field for life insurers is long overdue.
  In addition, the problem of runaway movie and television productions 
continues to threaten the well being of many sectors of the American 
economy. When moviemakers come to town, hotels are filled, restaurants 
and caterers gain new business, air and ground transportation provides 
and travel agents experience increased demand for their services. It's 
no wonder that several foreign governments have adopted tax and other 
incentives to attract motion picture and television production 
projects--and the jobs and spending that come with them. Now, more than 
ever we must counteract these off-shore incentives. The same businesses 
most affected by runaway production have also been those most 
dramatically impacted by the aftermath of the terrorist attacks on 
September 11.
  I cannot overemphasize that this is not just about Hollywood or the 
State of California. Runaway film and television production hurts 
states and cities across the country--from Illinois to Arkansas, and 
North Carolina to Washington. We must stop the hemorrhaging of American 
jobs and businesses to foreign shores. Unfortunately, legislation to 
keep movie and television production in the United States and generate 
jobs and revenue in communities throughout the country by providing 
wage-based tax credits for productions of films, television or cable 
programming was not considered as a component of the economic stimulus 
package. Again, I am hopeful that Congress will consider this proposal 
of such importance to so many Americans in the very near future.
  Finally, three pillars--the bull market, unparalleled consumer 
confidence, and a robust housing market--supported the historic 
economic growth of the last decade. Over the course of the past year, 
however, we have seen dramatic declines in both the stock market and in 
consumer confidence. Of the three, only the housing market has remained 
unbowed and continues to support a teetering economy. With this in 
mind, I believe it would have been very constructive to include 
proposals to ensure the strength and vitality of this sector. We could 
have stimulated the economy by putting the dream of homeownership 
within reach of more and more Americans

[[Page 27512]]

simply by expanding the existing tax credit for first-time homebuyers. 
For little cost and tremendous and proven return, we could have updated 
the low-income housing tax credit to encourage additional private 
sector development of valuable housing stock. These, too, are issues 
Congress and the President should address next year.
  Mr. Speaker, in closing, I must reiterate my profound disappointment 
that we have spent so many hours tonight debating for the second time 
an economic stimulus package that should not have been considered by 
this House the first time around. Time is short, I know, but there is 
enough for the bipartisan congressional leadership to go back to the 
negotiating table and craft a bipartisan, fiscally responsible economic 
stimulus and worker assistance bill that truly lives up to its name. We 
need a bill that will give families, workers, businesses, and the whole 
economy a shot in the arm--and we shouldn't go home until we do.
  Mr. LANGEVIN. Mr. Speaker, I rise in strong opposition to this 
partisan stimulus package, which offers little assistance to those most 
vulnerable in the current economic climate.
  Any economic stimulus package must include continued health coverage 
and unemployment benefits for workers who have lost their jobs. 
Unfortunately, this measure includes cosmetic changes from previous 
proposals, and relies on large, permanent multi-year tax cuts for 
business and higher-income taxpayers, while providing relatively few 
benefits for the unemployed.
  More than 2 million Americans have already lost their jobs this year, 
with over 700,000 layoffs since September 11th. Our national 
Unemployment Rate for November has jumped to 5.7%, the highest level in 
6 years. In Rhode Inland, unemployment has risen to 4.1%. Clearly, 
America's workers need our help now.
  For this reason, I support the Democratic substitute that contains 
substantial unemployment benefits and health coverage for dislocated 
workers while stimulating the economy with temporary business and 
individual tax cuts. Unlike the underlying bill, the substitute pays 
for itself by delaying the top income tax rate cut, which was approved 
earlier this year and benefits only the nation's wealthiest Americans.
  I urge my colleagues to support the Democratic substitute and to 
reject this ineffective economic stimulus package, which fails to 
provide the relief and stimulus that America's workers desperately 
need.
  Ms. KILPATRICK. Mr. Speaker, the bill we consider today is a 
misnomer. It is not as it purports itself to be . . . an ``economic 
stumulus'' bill. Rather, it is a corporate windfall tax break bill. The 
bill will do little to turnaround the economy and to assist those 
working Americans who, through no fault of their own, have lost their 
jobs. The bill is almost a clone of the tax cut bill we passed in 
October. I voted against the first bill, and I intend to vote against 
this one.
  Sixty-three percent of the $250 billion in tax breaks contained in 
this bill go to corporations. Some of the tax loopholes proposed in 
this bill will allow corporations to shelter interest income from 
offshore accounts at a cost of $3 billion over three years. The bill 
cuts the corporate alternative minimum tax by about two-thirds and pays 
out rebates over a stretched out period of time. The alternative 
minimum tax was enacted to ensure that America's largest corporations 
would pay a minimum amount of tax, just as average taxpayers do. The 
majority on the Ways and Means Committee obviously think otherwise, and 
it is proposing to virtually eliminate all future minimum corporate tax 
liability. That means we will return to the days when many corporate 
entities, who earn millions and billions in profits, will incur a tax 
liability lower than the average individual wage earner.
  The bill will also accelerate the reduction of the 27 percent income 
tax rate to 25 percent. The main features of this tax bill are easy to 
figure. For the most part, this is an instant replay of the corporate 
tax cut bill this House passed in October by the resounding margin of 
two votes. The majority party in this House is bent on shifting the tax 
burden away from corporations and individuals of privileged means-
income sources that can afford to pay more in taxes--to the average, 
lunch bucket taxpayer. That doesn't do much for the cause of tax equity 
nor for the cause of stimulating the economy.
  Now this bill is not completely bad. It has some good features that I 
support. For example, the bill extends unemployment compensation 
benefits by 13 weeks. As Martha Stewart says: ``That's a good thing.'' 
I also understand that the bill contains tax relief provisions for 
those victims who perished in the September 11 terrorist attacks, the 
anthrax attacks and the 1995 Oklahoma City bombing and to businesses in 
New York City adversely affected by the terrorist attacks. That, too, 
is a provision I support. But my support for the bill ends there.
  I have consistently voted against industry-specific bailout packages 
such as the Airline Assistance and the terrorism insurance bills. I did 
so because this House and the majority leadership of this House were 
willing to provide assistance to corporate America who suffered from 
the September 11 tragedy while it ignored victims of those attacks who 
became jobless in the wake of the economic downturn that ensued. The 
Leadership gave us assurances that a worker relief package would be 
crafted during the week of September 24. That week came and went with 
no worker relief package. More weeks passed without any worker relief 
package.
  It has been almost three months since we received those assurances 
that the Leadership brings up an economic stimulus package which 
contains some benefits for the jobless, but falls well short of being 
regarded as a ``worker relief'' package. The package of benefits 
contained in this measure is too little and very late.
  We are being forced to vote on a bill that no one has read or 
studied. What we know of the bill's contents comes from the press 
releases and comments from Chairman Thomas's office. The Members of the 
other side of the aisle refer to this measure as a compromise. If this 
bill represents a compromise, it is a compromise only among those who 
serve in the majority.
  The Members who crafted this bill are not sincere in their intention 
to assist the victims of the current economic downturn. They argue that 
the tax cuts proposed in this bill will help keep those currently 
employed on the job. To their credit, there is some merit to that 
argument. But when it comes to providing the jobless income assistance 
and affordable health insurance benefits to help them through these 
tough economic times, they fall short of the mark.
  The priorities of the majority are clearly defined. Bail out the 
airline industry. Bail out the commercial insurance industry. But 
forget and neglect those working families who have been displaced by 
the imperfections of a business cycle that went into a tailspin 
following the September 11th attack on America.
  Mr. KIND. Mr. Speaker, I rise today in opposition to the bill, the 
second economic stimulus bill to be considered this year. While it is 
necessary to provide an economic stimulus bill to be considered this 
year. While it is necessary to provide an economic stimulus package to 
jump start our currently sagging economy, I do not believe this is the 
time for Congress to use the economic slump and the war against 
terrorism as an excuse to revisit a previous tax agenda in a budget-
busting frenzy. I am disheartened that the House Leadership has, again 
this year, chosen to give big corporations a tax break without 
seriously considering relief for the American workers who need 
immediate help.
  The nation's unemployment rate jumped to 5.7 percent last month, the 
highest level in more than six years. Nearly a half million people 
joined the ranks of the unemployed in November, bringing the total of 
8.2 million. The rapidly increasing unemployment rate is an unfortunate 
trend. The rise in the number of unemployed has not, however, 
influenced the House Leadership to bring to the floor a bill providing 
substantial worker relief. Rather, they have brought an economic 
stimulus bill to the floor nearly identical to the one passed in 
October, without appreciating the suffering working families and their 
need for short-term assistance. They, after all, are the ones who need 
the money and will spend it thereby stimulating the economy by 
generating demand. It is critical that an economic stimulus package 
help those families who have lost their jobs.
  Furthermore, the bill will cost nearly $250 billion over five years. 
I cannot, in good conscience, support this reckless piece of 
legislation that will put our country back into deficit spending just 
to ensure that the Leadership secures its priority tax cuts. These tax 
cuts will not have the desired effect of boosting our economy; rather, 
they will threaten the fiscal discipline that prompted much of the 
1990's economic boom. Instead of finding reasonable offsets to pay for 
the stimulus bill, it will be paid by taking funds out of the Social 
Security and Medicare surplus, which nearly everyone here in Congress 
agreed not to touch. In addition, a return to deficit spending will 
increase long-term interest rates, and will slow down any foreseeable 
economic recovery.
  This is not the time to pursue our individual agendas, it is the time 
to pass a fiscally responsible short-term package that pushes our 
economy forward and provides relief for families in need. I urge my 
colleagues to oppose this bill. This rush to cut corporate taxes to

[[Page 27513]]

stimulate economic recovery is at best a questionable economic 
prescription and at worst one that could do far more harm than good.
  Mr. BENTSEN. Mr. Speaker, for far too many Americans, this economic 
stimulus package is a ``day late and a dollar short.'' For months, my 
constituents have shared their concerns about the state of our economy. 
They knew we were in a recession even before September 11th and the 
official economic benchmarks reflected as much. The stock market was 
sagging, corporate investment was declining and consumer confidence was 
down. The September 11th attacks on New York and Washington sent 
economic shockwaves throughout the nation and the reverberations are 
still being felt in my State, especially for those Texans whose 
livelihoods depended on the aviation and hospitality industries. In 
Houston, the sudden collapse of the Enron Corporation has dimmed the 
Holiday spirits of the over 4,500 Enron employees who received word 
last week that Enron was terminating their employment.
  Mr. Speaker, Americans have been courageous during this uncertain 
time and, all they asked of us, is to do what we can to ensure that the 
period of unemployment for effected workers is brief and that their 
families are provided with the income support and health care they need 
during this difficult time. Regrettably, the Republican Leadership has 
kept us here at this late hour for a bill that misses the mark on both 
counts. In its current form, there is little chance that H.R. 3529 will 
be able to stimulate the economy or meet the emergency income and 
health care needs of the recently-unemployed.
  Mr. Speaker, H.R. 3529 is the Republican Leadership's second stimulus 
bill in as many months. While this measure is an improvement over its 
predecessor which offered a broad menu of tax cuts, including a repeal 
the corporate alternative minimum income tax (AMT) and a substantial 
cut to capital gains taxes, and did not extend unemployment benefits, 
it overshoots our short term economic needs for long-term, long-
promised corporate tax cuts. Although this bill is supposed to be for 
short term economic stimulus, it would cost approximately $75 billion 
in fiscal year 2003 and $55 billion in fiscal year 2004, years when the 
economy is expected to be in recovery and further stimulus is not 
expected to be needed. Mr. Speaker, let's not forget that during that 
same period, the federal unified budget is slated to be in deficit. 
This $250 billion package is offered with no offsets, which exacerbates 
our budgetary condition, not to mention, undermines our commitment, to 
pay down the national debt. The fact that the Treasury Department told 
us that the nation will need to increase its debt limit to $6.7 
trillion is not incidental.
  Though I believe that most of the tax provisions in this will do 
little to stimulate our economy, there are a few features which I 
believe have merit. Specifically, the $300 supplemental tax rebate for 
individuals ($600 for couples) who received only a partial tax rebate 
or no rebate under last spring's tax cut and the provision reducing the 
recovery period for leasehold improvements, from 39 years to 15 years, 
stand out as provisions that have a reasonable likelihood of having a 
stimulative impact.
  Mr. Speaker, last Spring, back when we were ``awash in money'' and 
had off-budget surpluses for ``as far as the eye could see,'' we were 
told that the President's $1.35 trillion tax cut would provide stimulus 
to prevent this country from going into a recession. Now that the 
surpluses have turned to deficits, we are being asked to pass another 
tax bill, which, according to the Joint Committee on Tax, will cost 
$250 billion over ten years, adding $150 billion to the national debt.
  I am disappointed that this measure fails to take any specific steps 
to improve Unemployment Insurance (UI) coverage for low wage workers, 
many of whom entered the workforce through welfare reform in the last 
1990s. This population is half as likely to receive unemployment 
benefits as compared with higher-wage workers. Additionally, H.R. 3529 
misses an enormous opportunity to spur consumer spending by failing to 
increase UI benefits for families who are sure to spend the money 
quickly. I would note that I am pleased that the drafters of H.R. 3529 
have seen fit to include provisions calling for $9.2 billion in Reed 
Act distributions to the States. Knowing that the State of Texas' needs 
its Reed Act distribution, approximately $644 million, to meet its 
present commitments, I spearheaded a bipartisan effort with my 
colleague, Rep. Pete Sessions, to urge negotiators to include this 
important provision.
  Finally, Mr. Speaker, H.R. 3529's healthcare provisions are truly 
lacking. The Republican Leadership proposes to create a new program 
through a temporary 60% refundable tax credit for use in purchasing 
either COBRA or individual market health insurance policies. The 
Treasury Department will have to design and create this program, 
denying assistance for months. Mr. Speaker, in the absence of an 
employer healthcare subsidy of, on average, 73%, towards the health 
care premiums of its employees' families, how will the vast majority of 
the newly unemployed pay for the COBRA premiums that average $7,000 
annually for family coverage? Realistically, how much can this tax 
credit help?
  In conclusion, Mr. Speaker, as a senior member of the House budget 
Committee, I was heartened by the unanimity of opinion among House and 
Senate Budget leaders, on a bipartisan basis, as well as the President, 
that any economic stimulus package must be temporary, and designed to 
create an immediate, short-term impact, without jeopardizing our long-
term economic security. As I said before, Mr. Speaker, H.R. 3529 misses 
the mark on every count.
  Mr. CRANE. Mr. Speaker, I am pleased that every version of stimulus 
legislation--whether originating in the Administration, either body of 
Congress, Republican or Democrat--has included a provision to allow 
companies which have incurred losses this year to carry back those 
losses to offset income taxed more than two years ago. This is a very 
good concept and would actually provide money to these companies and 
help stimulate the economy. Taxpayers should be taxed on net income, 
not on some higher amount. If an accounting period longer than one year 
more appropriately reflects economic reality, we should not be hesitant 
to reflect that reality in our income tax laws.
  Unfortunately, the legislation before us does not remove the barriers 
denying some groups of corporations, which include life insurance 
companies, to net all their losses against the income they earned this 
year when they compute their federal income tax liability. I understand 
the constraints we were under in drafting the bill, but many of these 
corporate groups have incurred unexpectedly large losses this year and 
would be greatly helped if they were allowed to be taxed on net income, 
rather than some higher amount.
  Along with twenty-five colleagues on the Committee on Ways and Means, 
I introduced legislation earlier this year to amend the consolidated 
return provisions of the Internal Revenue Code. The bill, H.R. 909, 
repeals three separate limitations on the ability to net all losses 
against income within an affiliated group of corporations if one or 
more of the group members is a life insurance company. We have received 
no objections to the bill on tax policy or other grounds, and two of 
the three provisions were included in the Joint Committee staff 
recommendations of changes that would significantly reduce the 
complexity of the tax laws.
  But, more importantly, it is simply wrong to impose income tax on 
more than net income. Not only is it bad tax policy, but it has a major 
economic impact when events such as those of September 11th occur. I 
would hope that we will be able to enact legislation early next year to 
accomplish this. These restrictions should have been repealed long ago. 
In today's economic environment, we should delay no longer.
  Mrs. CAPITO. Mr. Speaker, I rise in strong support of H.R. 3529, the 
Economic Growth and Security Act.
  As we all know, in late November, the National Bureau of Economic 
Research reported that the United States was in an economic recession. 
This news only confirmed what many of us already feared--that the 
American economy is slumping and thousands of American workers are 
losing their jobs.
  Their intuition was not off the mark. As of late November, 
unemployment is on the rise and is at its highest level in six years.
  My Congressional District in West Virginia has been especially hit 
hard by the economic downturn. In recent weeks, several manufacturing 
plants in West Virginia have announced plans to lay off workers because 
of the unfavorable economic climate.
  Clearly, Congress must pass an economic stimulus package that boosts 
the ailing economy, preserves and creates new jobs and aids America's 
workers and families who are the unfortunate victims of this recession.
  This bill accomplishes all of these goals, as it is a positive step 
towards economic recovery.
  With provisions for improved health care and unemployment benefits, 
this stimulus plan will address the needs of the hard-working men and 
women of America. At the same time, the plan will secure our long-term 
economic health by stimulating job creation and economic growth.
  Mr. Speaker, over three months have passed since the tragic events of 
September 11. In October, the House passed a sound economic security 
plan. Legitimate differences

[[Page 27514]]

have prevented our ability to send a final to the President. This past 
weekend, the President said that if we do not pass an economic security 
package, an additional 300,000 American jobs could be lost. This is 
unacceptable.
  Today, we return to the floor with a new bill that reflects the 
spirit of true bipartisanship and compromise. We must send this 
stimulus package to the President's desk before concluding our work 
this session.
  Mr. CHAMBLISS. Mr. Speaker, people across America, across Georgia are 
losing their jobs in very alarming numbers. This is a very critical 
time for our economy; it is very fragile. It is time this Congress act 
to help the people of this country.
  The terrorists who killed thousands of innocent people would like 
nothing better than also to destroy the American economy. Small 
businesses and individuals in Georgia, as well as the rest of the 
country are facing difficult financial situations. The actual loss of 
jobs or the threat of a loss of jobs is hitting all of us: our 
families, our neighbors, and our friends. It is time for Congress to 
respond.
  We need an economic stimulus package that is going to lower the tax 
burden that is impeding our economic growth and create the incentives 
to bring people back to work. The people who are losing their jobs in 
Georgia do not want partisan bickering from their representatives up 
here in Washington--they want results back home.
  We need to put people back to work and get our economy back on its 
feet. Families are hurting, unemployment is rising, and people need 
help. The American people deserve action on an economic stimulus 
package now. It is time to put partisanship aside and work together to 
turn our economy around.
  It has been almost two months since my colleagues and I passed the 
Economic Security and Recovery Act. The House of Representatives worked 
as quickly as possible to provide our constituents with the complete, 
comprehensive, and broad-based economic assistance. Since then, the 
bill has languished; even though stimulating the economy remains one of 
the highest priorities for Americans, second only to our Nation's fight 
against terrorism.
  This economic package is a major step to regaining a healthy Georgia 
economy. Each of the components will help stimulate different areas of 
the economy and promote economic growth and jobs. Our economy has 
weathered turbulence in the past during times of war and peace times, 
but a sound, reasoned economic growth package, such as the one we 
debate today, will significantly help to put America on the right track 
back to prosperity.
  Mr. EVANS. Mr. Speaker, once again the Republicans have presented an 
economic stimulus bill that falls short in aiding those most affected 
by the recession and continues to reward the wealthy and traditional 
Republican party donors. Under a ``compromise'' plan, Republicans offer 
a bounty of corporate tax giveaways at the behest of layed-off workers 
and their families who are left out in the cold during this Christmas 
season.
  The Republican economic stimulus continues the long-standing 
Republican tradition of corporate giveaways that does nothing for the 
constituents of Western and Central Illinois. Republicans continue to 
insist on eliminating the corporate alternative minimum tax, which 
would allow thousands of profitable corporate giants to go untaxed. 
Republicans also continue to accelerate the Bush tax cut, which has 
erased the budget surplus and reversed four years of budget surpluses. 
Economists universally agree that these types of tax cuts will do 
nothing in the short term to stimulate the economy or aid those most 
affected by the economic downturn.
  Americans who have lost their jobs in this economic downturn need 
immediate help to ensure that they do not also lose their health 
insurance. But, the Republican's health tax credit proposal falls 
dramatically short by only providing a partial tax credit to purchase 
COBRA or private health insurance. By relying on tax credits, 
Republicans expect recently layed-off workers to come up with hundreds 
of dollars for overpriced health insurance, while waiting months for 
government reimbursement of a partial tax credit.
  My congressional district has witnessed thousands of layoffs and 
cutbacks. I am uncompromising on the issue of helping ordinary 
Americans and therefore support a compassionate and fiscally 
responsible Democratic economic stimulus plan that provides immediate 
assistance to those most affected by the recession. The Democratic plan 
expands COBRA and provides assistance in purchasing COBRA coverage. 
Moreover, by providing coverage through COBRA, we can guarantee 
affordable coverage even for workers with preexisting conditions and 
make a promise that will not have to wait until April 15th to be 
realized. The Democratic plan also increases unemployment benefits and 
ensures recently unemployed low income workers receive fair 
unemployment benefits.
  According to the non-partisan Congressional Budget Office, the 
Democratic plan would reach almost three times as many displaced 
workers as the Republican plan. Overall, the Republican stimulus plan 
would hurt the economy by growing the budget deficit by over $200 
billion dollars, including the necessary debt maintenance.
  Mr. WATTS of Oklahoma. Mr. Speaker, Christmas is coming and Americans 
are hurting. The economy is in a recession and employees are losing 
their jobs.
  Markets need a boost so retirement security can once again be secure. 
John and Sally Doe back home in the heartland need our help.
  The House of Representatives passed a good economic security bill in 
October. It's now December 19th--and the Senate has yet to pass a 
similar bill to help get our economy back on track. The argument coming 
from the other body and the other side of the aisle is centered upon 
more benefits for the unemployed. So, here we are today--with a new 
bill to give more benefits to the unemployed. We have addressed our 
critics' concerns and included their suggestions in the legislation 
before us. If that isn't bipartisanship at its best, I don't know what 
is.
  This bill helps laid-off workers by providing a generous tax credit 
for Americans who have lost their jobs so they may buy health 
insurance. It extends unemployment benefits by thirteen weeks. It gives 
small businesses help so they may create more jobs. And we will give 
tax rebate checks to lower-income Americans and reduce the income tax 
for middle-class Americans. There are initiatives that achieve 
important goals; helping those who need immediate assistance, while 
creating new jobs and giving a boost to the economy.
  The president told the country this past weekend: if Congress doesn't 
pass an economic security package, 300,000 jobs could be lost. Doing 
nothing is the same as aiding and abetting a sinking ship. We need to 
step up to the plate and help get our economy back on track.
  Mr. Speaker, this bill is not a Republican proposal, nor is it a 
Democrat proposal. It is a fair and balanced mix of ideas from both 
parties and both chambers.
  Our constituents back home want relief. They want help. They need 
jobs. They need us to do something to address the situation we are in. 
We did not create the problem--but we certainly have the tools to fix 
it.
  So, Mr. Speaker, I ask my colleagues to do the right thing and vote 
for this bill. It is not the be-all or end-all, but it is a solid 
package to help folks who are suffering through hard times while 
looking ahead to the future. If we do nothing, the American people 
lose. If we pass the economic security bill, we will offer hope for our 
neighbors looking to have decent health care and good jobs to provide 
for their families.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in strong opposition to the 
stimulus bill being brought today by the Republican leadership.
  As I have come to the floor on previous occasions to say, we must 
take care of the people of this country who have lost jobs and health 
coverage because of September 11th, before we do anything else. Not 
only is it the right thing to do for them and for our country, but also 
it is one of the best stimuli we could put in place to begin to get our 
economy back on track.
  We have provided help for Airlines, we have provided help for 
insurance companies, we have allowed our own cost-of-living increase to 
go into effect, and now what our leaders would have us do is to provide 
ill-advised and really unnecessary tax cuts to the largest of 
corporations, and let hundreds of thousands of working people go 
without.
  Some say there is not enough money to allow the temporary one-year 
extension of the Unemployment Program and an extra twenty-six weeks of 
unemployment benefits that the Democrats are asking for. My solution is 
a simple one! Eliminate or at least delay the tax cut until we know the 
money will be there to fund it, and do not repeal the alternative 
minimum tax for corporations, save one year's relief, at most.
  I commend my colleagues Charles Rangel, John Dingle, and Dick 
Gephardt, as well as those in the other body who worked hard to reach a 
good compromise that helps the most people. They did the very best they 
could. And I applaud them for not giving in or giving up on the people 
who are depending on them for relief that they will not get otherwise.
  I urge my colleagues on this side of the aisle to hold fast and vote 
``no'' on this bill, and I also invite and urge my other colleagues to 
do what is right for this country, and do the same.

[[Page 27515]]

  The SPEAKER pro tempore (Mr. Thornberry). All time for debate has 
expired.
  Pursuant to House Resolution 320, the bill is considered as read for 
amendment and the previous question is ordered.
  The question is on engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                motion to recommit offered by mr. rangel

  Mr. RANGEL. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. RANGEL. I am, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:
  Mr. Rangel moves to recommit the bill H.R. 3529 to the Committee on 
Ways and Means with instructions that the Committee report the same 
back to the House forthwith with the following amendment.

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Fiscal 
     Stimulus and Worker Relief Act of 2001''.
       (b) References to Internal Revenue Code of 1986.--Except as 
     otherwise expressly provided, whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of the Internal Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title, etc.

                        TITLE I--TAX PROVISIONS

                    Subtitle A--Supplemental Rebate

Sec. 101. Supplemental rebate.

            Subtitle B--Depreciation Benefits and Expensing

Sec. 111. Special depreciation allowance for certain property.


Sec. 112. Temporary increase in expensing under section 179.

         Subtitle C--Extensions of Certain Expiring Provisions

Sec. 121. Allowance of nonrefundable personal credits against regular 
              and minimum tax liability.
Sec. 122. Credit for qualified electric vehicles.
Sec. 123. Credit for electricity produced from renewable resources.
Sec. 124. Work Opportunity Credit.
Sec. 125. Welfare-to-Work credit.
Sec. 126. Deduction for clean-fuel vehicles and certain refueling 
              property.
Sec. 127. Taxable income limit on percentage depletion for oil and 
              natural gas produced from marginal properties.
Sec. 128. Qualified zone academy bonds.
Sec. 129. Cover over of tax on distilled spirits.
Sec. 130. Parity in the application of certain limits to mental health 
              benefits.
Sec. 131. Delay in effective date of requirement for approved diesel or 
              kerosene terminals.
Sec. 132. Subpart F exemption for active financing.
Sec. 133. 1-year extension of supplemental grant program under the TANF 
              program.
Sec. 134. 1-year extension of contingency fund under the TANF program.

                      Subtitle D--Other Provisions

Sec. 141. Alternative minimum tax relief with respect to incentive 
              stock options exercised during 2000 or 2001.
Sec. 142. Carryback of certain net operating losses allowed for 5 
              years.
Sec. 143. Temporary waiver of 90 percent AMT limitations.
Sec. 144. Expansion of incentives for public schools.

                        TITLE II--WORKER RELIEF

            Subtitle A--Temporary Unemployment Compensation

Sec. 201. Short title.
Sec. 202. Federal-State agreements.
Sec. 203. Temporary Supplemental Unemployment Compensation Account.
Sec. 204. Payments to States having agreements under this subtitle.
Sec. 205. Financing provisions.
Sec. 206. Fraud and overpayments.
Sec. 207. Definitions.
Sec. 208. Applicability.
Sec. 209. Special Reed Act transfer in Fiscal Year 2002.

     Subtitle B--PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE

Sec. 211. Premium assistance for COBRA continuation coverage.

   Subtitle C--Additional Assistance for Temporary Health Insurance 
                                Coverage

Sec. 221. Optional temporary medicaid coverage for certain uninsured 
              employees.
Sec. 222. Optional temporary coverage for unsubsidized portion of COBRA 
              continuation premiums.

 Subtitle D--Temporary Increases of Medicaid FMAP For Fiscal Year 2002

Sec. 231. Temporary increases of medicaid FMAP for fiscal year 2002.

             TITLE III--TAX RELIEF FOR VICTIMS OF TERRORISM

     Subtitle A--Relief Provisions For Victims of Terrorist Attacks

Sec. 301. Income and employment taxes of victims of terrorist attacks.
Sec. 302. Estate tax reduction.
Sec. 303. Payments by charitable organizations treated as exempt 
              payments.
Sec. 304. Exclusion of certain cancellations of indebtedness.
Sec. 305. Treatment of certain structured settlement payments and 
              disability trusts.
Sec. 306. No impact on social security trust fund.

Subtitle B--General Relief for Victims of Disasters and Terroristic or 
                            Military Actions

Sec. 311. Exclusion for disaster relief payments.
Sec. 312. Authority to postpone certain deadlines and required actions.
Sec. 313. Internal Revenue Service disaster response team.
Sec. 314. Application of certain provisions to terroristic or military 
              actions.
Sec. 315. Clarification of due date for airline excise tax deposits.
Sec. 316. Coordination with Air Transportation Safety and System 
              Stabilization Act.

  Subtitle C--Disclosure of Tax Information in Terrorism and National 
                        Security Investigations

Sec. 321. Disclosure of tax information in terrorism and national 
              security investigations.

               TITLE IV--NEW YORK RECOVERY FROM TERRORISM

Sec. 401. Expansion of work opportunity tax credit targeted categories 
              to include certain employees in New York City.
Sec. 402. Tax-exempt private activity bonds for rebuilding portion of 
              New York City damaged in the September 11, 2001, 
              terrorist attack.
Sec. 403. Additional advance refunding permitted of certain bonds.
Sec. 404. Gain or loss from property damaged or destroyed in New York 
              Recovery Zone.
Sec. 405. Credit for individuals residing in Lower Manhattan.

TITLE V--FREEZE OF TOP INDIVIDUAL INCOME TAX RATE AND DOMESTIC SECURITY 
                               TRUST FUND

Sec. 501. Freeze of top individual income tax rate and Domestic 
              Security Trust Fund.

                        TITLE I--TAX PROVISIONS

                    Subtitle A--Supplemental Rebate

     SEC. 101. SUPPLEMENTAL REBATE.

       (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 Rebate.--
       ``(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--
       ``(A) filed a return of tax imposed by subtitle A for such 
     taxable year, or
       ``(B) filed a return of income tax with the government of 
     American Samoa, Guam, the Commonwealth of the Northern 
     Mariana Islands, the Commonwealth of Puerto Rico, or the 
     Virgin Islands of the United States,
     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 amount of any advance refund amount paid to the 
     taxpayer 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.
       ``(5) Special rule for certain nonresidents.--The 
     determination under subsection (c)(2) as to whether an 
     individual who filed a return of tax described in paragraph 
     (1)(B) is a nonresident alien individual

[[Page 27516]]

     shall, under rules prescribed by the Secretary, be made by 
     reference to the possession or Commonwealth with which the 
     return was filed and not the United States.''.
       (b) Technical Correction.--
       (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).''.
       (c) Conforming Amendments.--
       (1) Paragraph (1) of section 6428(d), as amended by 
     subsection (b), is amended by striking ``subsection (e)'' and 
     inserting ``subsections (e) and (f)''.
       (2) Paragraph (2) of section 6428(d), as amended by 
     subsection (b), is amended by striking ``subsection (e)'' and 
     inserting ``subsection (e) or (f)''.
       (3) Paragraph (3) of section 6428(e) is amended by striking 
     ``December 31, 2001'' and inserting ``the date of the 
     enactment of the Fiscal Stimulus and Worker Relief Act of 
     2001''.
       (d) Reporting Requirement.--For purposes of determining the 
     individuals who are eligible for the supplemental rebate 
     under section 6428(f) of the Internal Revenue Code of 1986, 
     the governments of American Samoa, Guam, the Commonwealth of 
     the Northern Mariana Islands, the Commonwealth of Puerto 
     Rico, and the Virgin Islands of the United States shall 
     provide, at such time and in such manner as provided by the 
     Secretary of the Treasury, the names, addresses, and taxpayer 
     identifying numbers (within the meaning of section 6109 of 
     the Internal Revenue Code of 1986) of residents who filed 
     returns of income tax with such governments for 2000.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Technicals.--The amendments made by subsection (b) 
     shall take effect as if included in the amendment made by 
     section 101(b)(1) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001.

            Subtitle B--Depreciation Benefits and Expensing

     SEC. 111. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN 
                   PROPERTY.

       (a) In General.--Section 168 (relating to accelerated cost 
     recovery system) is amended by adding at the end the 
     following new subsection:
       ``(k) Special Allowance for Certain Property Acquired After 
     September 10, 2001, and Before January 1, 2003.--
       ``(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 an 
     applicable recovery period of 20 years or less or which is 
     water utility property,
       ``(II) which is computer software (as defined in section 
     167(f)(1)(B)) for which a deduction is allowable under 
     section 167(a) without regard to this subsection,
       ``(III) which is qualified leasehold improvement property, 
     or
       ``(IV) which is eligible for depreciation under section 
     167(g),
       ``(ii) the original use of which commences with the 
     taxpayer after September 10, 2001, and
       ``(iii) which is--

       ``(I) acquired by the taxpayer during the 1-year period 
     beginning on September 11, 2001, and ending on September 10, 
     2002, and placed in service during such 1-year period, or
       ``(II) constructed, reconstructed, or erected by or for the 
     taxpayer on or after the first day of such 1-year period, but 
     only to the extent of the basis thereof attributable to the 
     construction, reconstruction, or erection during such 1-year 
     period.

       ``(B) Exceptions.--
       ``(i) Alternative depreciation property.--The term 
     `qualified property' shall not include any property to which 
     the alternative depreciation system under subsection (g) 
     applies, determined--

       ``(I) without regard to paragraph (7) of subsection (g) 
     (relating to election to have system apply), and
       ``(II) after application of section 280F(b) (relating to 
     listed property with limited business use).

       ``(ii) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(C) 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 clause (ii).
       ``(D) Coordination with section 280f.--For purposes of 
     section 280F--
       ``(i) Automobiles.--In the case of a passenger automobile 
     (as defined in section 280F(d)(5)) which is qualified 
     property, the Secretary shall increase the limitation under 
     section 280F(a)(1)(A)(i) by $1,600.
       ``(ii) Listed property.--The deduction allowable under 
     paragraph (1) shall be taken into account in computing any 
     recapture amount under section 280F(b)(2).
       ``(3) Qualified leasehold improvement property.--For 
     purposes of this subsection--
       ``(A) In general.--The term `qualified leasehold 
     improvement property' means any improvement to an interior 
     portion of a building which is nonresidential real property 
     if--
       ``(i) such improvement is made under or pursuant to a lease 
     (as defined in subsection (h)(7))--

       ``(I) by the lessee (or any sublessee) of such portion, or
       ``(II) by the lessor of such portion,

       ``(ii) such portion is to be occupied exclusively by the 
     lessee (or any sublessee) of such portion, and
       ``(iii) such improvement is placed in service more than 3 
     years after the date the building was first placed in 
     service.
       ``(B) Certain improvements not included.--Such term shall 
     not include any improvement for which the expenditure is 
     attributable to--
       ``(i) the enlargement of the building,
       ``(ii) any elevator or escalator,
       ``(iii) any structural component benefiting a common area, 
     and
       ``(iv) the internal structural framework of the building.
       ``(C) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Binding commitment to lease treated as lease.--A 
     binding commitment to enter into a lease shall be treated as 
     a lease, and the parties to such commitment shall be treated 
     as lessor and lessee, respectively.
       ``(ii) Related persons.--A lease between related persons 
     shall not be considered a lease. For purposes of the 
     preceding sentence, the term `related persons' means--

       ``(I) members of an affiliated group (as defined in section 
     1504), and
       ``(II) persons having a relationship described in 
     subsection (b) of section 267; except that, for purposes of 
     this clause, the phrase `80 percent or more' shall be 
     substituted for the phrase `more than 50 percent' each place 
     it appears in such subsection.

       ``(D) Improvements made by lessor.--In the case of an 
     improvement made by the person who was the lessor of such 
     improvement when such improvement was placed in service, such 
     improvement shall be qualified leasehold improvement property 
     (if at all) only so long as such improvement is held by such 
     person.''.
       (b) Allowance Against Alternative Minimum Tax.--
       (1) In general.--Section 56(a)(1)(A) (relating to 
     depreciation adjustment for alternative minimum tax) is 
     amended by adding at the end the following new clause:
       ``(iii) Additional allowance for certain property acquired 
     after september 10, 2001, and before january 1, 2003.--The 
     deduction under section 168(k) shall be allowed.''.

[[Page 27517]]

       (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. 112. 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.....................................................$50,000 
      2003 or thereafter..................................... 25,000.''
       (b) Temporary Increase in Amount of Property Triggering 
     Phaseout of Maximum Benefit.--Paragraph (2) of section 179(b) 
     of such Code is amended by inserting before the period 
     ``($400,000 in the case of taxable years beginning during 
     2002)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

         Subtitle C--Extensions of Certain Expiring Provisions

     SEC. 121. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS AGAINST 
                   REGULAR AND MINIMUM TAX LIABILITY.

       (a) In General.--Paragraph (2) of section 26(a) is 
     amended--
       (1) by striking ``rule for 2000 and 2001.--'' and inserting 
     ``rule for 2000, 2001, and 2002.--'', and
       (2) by striking ``during 2000 or 2001,'' and inserting 
     ``during 2000, 2001, or 2002,''.
       (b) Conforming Amendments.--
       (1) Section 904(h) is amended by striking ``during 2000 or 
     2001'' and inserting ``during 2000, 2001, or 2002''.
       (2) The amendments made by sections 201(b), 202(f), and 
     618(f) of the Economic Growth and Tax Relief Reconciliation 
     Act of 2001 shall not apply to taxable years beginning during 
     2002.
       (c) Technical Correction.--Section 24(d)(1)(B) is amended 
     by striking ``amount of credit allowed by this section'' and 
     inserting ``aggregate amount of credits allowed by this 
     subpart.''.
       (d) Effective Dates.--
       (1) The amendments made by subsections (a) and (b) shall 
     apply to taxable years beginning after December 31, 2001.
       (2) The amendment made by subsection (c) shall apply to 
     taxable years beginning after December 31, 2000.

     SEC. 122. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

       (a) In General.--Section 30 is amended--
       (1) in subsection (b)(2)--
       (A) by striking ``December 31, 2001,'' and inserting 
     ``December 31, 2002,'', and
       (B) in subparagraphs (A), (B), and (C), by striking 
     ``2002'', ``2003'', and ``2004'', respectively, and inserting 
     ``2003'', ``2004'', and ``2005'', respectively, and
       (2) in subsection (e), by striking ``December 31, 2004'' 
     and inserting ``December 31, 2005''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 123. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE 
                   RESOURCES.

       (a) In General.--Subparagraphs (A), (B), and (C) of section 
     45(c)(3) are each amended by striking ``2002'' and inserting 
     ``2003''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 124. WORK OPPORTUNITY CREDIT.

       (a) In General.--Subparagraph (B) of section 51(c)(4) is 
     amended by striking ``2001'' and inserting ``2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals who begin work for the employer 
     after December 31, 2001.

     SEC. 125. WELFARE-TO-WORK CREDIT.

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

     SEC. 126. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN 
                   REFUELING PROPERTY.

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

     SEC. 127. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 
                   OIL AND NATURAL GAS PRODUCED FROM MARGINAL 
                   PROPERTIES.

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

     SEC. 128. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``2000, and 2001'' and inserting ``2000, 
     2001, and 2002''.
       (b) Extension of carryover of unused limitation from 
     1998.--Paragraph (4) of section 1397E(e) is amended by 
     striking ``3 years for carryforwards from 1998 or 1999'' and 
     inserting ``4 years for carryforwards from 1998 and 3 years 
     for carryforwards from 1999''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

     SEC. 129. COVER OVER OF TAX ON DISTILLED SPIRITS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``2002'' and inserting ``2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 130. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       (a) In General.--Subsection (f) of section 9812 is amended 
     by striking ``2001'' and inserting ``2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to plan years beginning after December 31, 2001.

     SEC. 131. DELAY IN EFFECTIVE DATE OF REQUIREMENT FOR APPROVED 
                   DIESEL OR KEROSENE TERMINALS.

       Paragraph (2) of section 1032(f) of the Taxpayer Relief Act 
     of 1997 (Public Law 105-34) is amended by striking ``January 
     1, 2002'' and inserting ``January 1, 2003''.

     SEC. 132. SUBPART F EXEMPTION FOR ACTIVE FINANCING.

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

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

       ``(ii) Ruling request.--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, 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. 133. 1-YEAR EXTENSION OF SUPPLEMENTAL GRANT PROGRAM 
                   UNDER THE TANF PROGRAM.

       Paragraph (3) of section 403(a) of the Social Security Act 
     (42 U.S.C. 603(a)(3)) is amended by striking ``and 2001'' 
     each place it appears and inserting ``2001, and 2002''.

     SEC. 134. 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''.

     SEC. 135. 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) section 168(j) is amended by 
     striking ``December 31, 2003'' and inserting ``December 31, 
     2004''.

                      Subtitle D--Other Provisions

     SEC. 141. ALTERNATIVE MINIMUM TAX RELIEF WITH RESPECT TO 
                   INCENTIVE STOCK OPTIONS EXERCISED DURING 2000 
                   OR 2001.

       In the case of an incentive stock option (as defined in 
     section 422 of the Internal Revenue Code of 1986) exercised 
     during calendar year 2000 or 2001, the amount taken into 
     account under section 56(b)(3) of such Code by reason of such 
     exercise shall not exceed the amount that would have been 
     taken into account if, on the date of such exercise, the fair 
     market value of the stock acquired pursuant to such option 
     had been--
       (1) its fair market value as of--
       (A) April 15, 2001, in the case of options exercised during 
     2000, and
       (B) December 31, 2001, in the case of options exercised 
     during 2001, or
       (2) if such stock is sold or exchanged on or before the 
     applicable date under paragraph (1), the amount realized on 
     such sale or exchange.

[[Page 27518]]



     SEC. 142. 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 in 2001, 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 subsection (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.--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 
     in 2001, or
       ``(II) alternative minimum taxable income determined 
     without regard to such deduction reduced by the amount 
     determined under clause (i), and''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to net operating losses for taxable years ending 
     in 2001.

     SEC. 143. TEMPORARY WAIVER OF 90 PERCENT AMT LIMITATIONS.

       Subparagraph (A) of section 56(b)(1) of the Internal 
     Revenue Code of 1986 and paragraph (2) of section 59(a) of 
     such Code shall not apply in determining alternative minimum 
     tax liability for taxable years beginning in 2002.

     SEC. 144. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

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

         ``Subchapter Y--Public School Modernization Provisions

``Sec. 1400K. Credit to holders of qualified public school 
              modernization bonds.
``Sec. 1400L. Qualified school construction bonds.
``Sec. 1400M. Qualified zone academy bonds.

     ``SEC. 1400K. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL 
                   MODERNIZATION BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a qualified public school modernization bond on a 
     credit allowance date of such bond which occurs during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter for such taxable year an amount 
     equal to the sum of the credits determined under subsection 
     (b) with respect to credit allowance dates during such year 
     on which the taxpayer holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified public school modernization bond is 25 
     percent of the annual credit determined with respect to such 
     bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified public school modernization bond is 
     the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (1), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of issuance of the issue) on outstanding 
     long-term corporate debt obligations (determined under 
     regulations prescribed by the Secretary).
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Qualified Public School Modernization Bond; Credit 
     Allowance Date.--For purposes of this section--
       ``(1) Qualified public school modernization bond.--The term 
     `qualified public school modernization bond' means--
       ``(A) a qualified zone academy bond, and
       ``(B) a qualified school construction bond.
       ``(2) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Local educational agency.--The term `local 
     educational agency' has the meaning given to such term by 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965. Such term includes the local educational agency that 
     serves the District of Columbia but does not include any 
     other State agency.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Public school facility.--The term `public school 
     facility' shall not include--
       ``(A) any stadium or other facility primarily used for 
     athletic contests or exhibitions or other events for which 
     admission is charged to the general public, or
       ``(B) any facility which is not owned by a State or local 
     government or any agency or instrumentality of a State or 
     local government.
       ``(f) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(g) Recapture of Portion of Credit Where Cessation of 
     Compliance.--
       ``(1) In general.--If any bond which when issued purported 
     to be a qualified public school modernization bond ceases to 
     be a qualified public school modernization bond, the issuer 
     shall pay to the United States (at the time required by the 
     Secretary) an amount equal to the sum of--
       ``(A) the aggregate of the credits allowable under this 
     section with respect to such bond (determined without regard 
     to subsection (c)) for taxable years ending during the 
     calendar year in which such cessation occurs and the 2 
     preceding calendar years, and
       ``(B) interest at the underpayment rate under section 6621 
     on the amount determined under subparagraph (A) for each 
     calendar year for the period beginning on the first day of 
     such calendar year.
       ``(2) Failure to pay.--If the issuer fails to timely pay 
     the amount required by paragraph (1) with respect to such 
     bond, the tax imposed by this chapter on each holder of any 
     such bond which is part of such issue shall be increased (for 
     the taxable year of the holder in which such cessation 
     occurs) by the aggregate decrease in the credits allowed 
     under this section to such holder for taxable years beginning 
     in such 3 calendar years which would have resulted solely 
     from denying any credit under this section with respect to 
     such issue for such taxable years.
       ``(3) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (2) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     paragraph (2) shall not be treated as a tax imposed by this 
     chapter for purposes of determining --
       ``(i) the amount of any credit allowable under this part, 
     or
       ``(ii) the amount of the tax imposed by section 55.
       ``(h) Bonds Held by Regulated Investment Companies.--If any 
     qualified public school modernization bond is held by a 
     regulated investment company, the credit determined under 
     subsection (a) shall be allowed

[[Page 27519]]

     to shareholders of such company under procedures prescribed 
     by the Secretary.
       ``(i) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified public school 
     modernization bond and the entitlement to the credit under 
     this section with respect to such bond. In case of any such 
     separation, the credit under this section shall be allowed to 
     the person who on the credit allowance date holds the 
     instrument evidencing the entitlement to the credit and not 
     to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified public school modernization bond as if 
     it were a stripped bond and to the credit under this section 
     as if it were a stripped coupon.
       ``(j) Treatment for Estimated Tax Purposes.--Solely for 
     purposes of sections 6654 and 6655, the credit allowed by 
     this section to a taxpayer by reason of holding a qualified 
     public school modernization bonds on a credit allowance date 
     shall be treated as if it were a payment of estimated tax 
     made by the taxpayer on such date.
       ``(k) Credit May Be Transferred.--Nothing in any law or 
     rule of law shall be construed to limit the transferability 
     of the credit allowed by this section through sale and 
     repurchase agreements.
       ``(k) Reporting.--Issuers of qualified public school 
     modernization bonds shall submit reports similar to the 
     reports required under section 149(e).
       ``(l) Penalty on Contractors Failing To Pay Prevailing 
     Wage.--
       ``(1) In general.--If the Secretary of Labor certifies to 
     the Secretary that any contractor on any project funded by 
     any qualified public school modernization bond has failed, 
     during any portion of such contractor's taxable year, to pay 
     prevailing wages as would be required under section 439 of 
     the General Education Provisions Act if such funding were an 
     applicable program under such section, the tax imposed by 
     chapter 1 on such contractor for such taxable year shall be 
     increased by 100 percent of the amount involved in such 
     failure. The preceding sentence shall not apply to the extent 
     the Secretary of Labor determines that such failure is due to 
     reasonable cause and not willful neglect.
       ``(2) Amount involved.--For purposes of paragraph (1), the 
     amount involved with respect to any failure is the excess of 
     the amount of wages such contractor would be so required to 
     pay under such section over the amount of wages paid.
       ``(3) No credits against tax.--The tax imposed by this 
     section shall not be treated as a tax imposed by this chapter 
     for purposes of determining--
       ``(A) the amount of any credit allowable under this 
     chapter, or
       ``(B) the amount of the minimum tax imposed by section 55.
       ``(m) Termination.--This section shall not apply to any 
     bond issued after September 30, 2006.

     ``SEC. 1400L. QUALIFIED SCHOOL CONSTRUCTION BONDS.

       ``(a) Qualified School Construction Bond.--For purposes of 
     this subchapter, the term `qualified school construction 
     bond' means any bond issued as part of an issue if--
       ``(1) 95 percent or more of the proceeds of such issue are 
     to be used for the construction, rehabilitation, or repair of 
     a public school facility or for the acquisition of land on 
     which such a facility is to be constructed with part of the 
     proceeds of such issue,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such school is located,
       ``(3) the issuer designates such bond for purposes of this 
     section, and
       ``(4) the term of each bond which is part of such issue 
     does not exceed 15 years.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) by 
     any issuer shall not exceed the sum of--
       ``(1) the limitation amount allocated under subsection (d) 
     for such calendar year to such issuer, and
       ``(2) if such issuer is a large local educational agency 
     (as defined in subsection (e)(4)) or is issuing on behalf of 
     such an agency, the limitation amount allocated under 
     subsection (e) for such calendar year to such agency.
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified school construction bond 
     limitation for each calendar year. Such limitation is--
       ``(1) $11,000,000,000 for 2002, and
       ``(2) except as provided in subsection (f), zero after 
     2002.
       ``(d) 60 Percent of Limitation Allocated Among States.--
       ``(1) In general.--60 percent of the limitation applicable 
     under subsection (c) for any calendar year shall be allocated 
     by the Secretary among the States in proportion to the 
     respective numbers of children in each State who have 
     attained age 5 but not age 18 for the most recent fiscal year 
     ending before such calendar year. The limitation amount 
     allocated to a State under the preceding sentence shall be 
     allocated by the State to issuers within such State.
       ``(2) Minimum allocations to states.--
       ``(A) In general.--The Secretary shall adjust the 
     allocations under this subsection for any calendar year for 
     each State to the extent necessary to ensure that the sum 
     of--
       ``(i) the amount allocated to such State under this 
     subsection for such year, and
       ``(ii) the aggregate amounts allocated under subsection (e) 
     to large local educational agencies in such State for such 
     year,
     is not less than an amount equal to such State's minimum 
     percentage of the amount to be allocated under paragraph (1) 
     for the calendar year.
       ``(B) Minimum percentage.--A State's minimum percentage for 
     any calendar year is the minimum percentage described in 
     section 1124(d) of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6334(d)) for such State for the most 
     recent fiscal year ending before such calendar year.
       ``(3) Allocations to certain possessions.--The amount to be 
     allocated under paragraph (1) to any possession of the United 
     States other than Puerto Rico shall be the amount which would 
     have been allocated if all allocations under paragraph (1) 
     were made on the basis of respective populations of 
     individuals below the poverty line (as defined by the Office 
     of Management and Budget). In making other allocations, the 
     amount to be allocated under paragraph (1) shall be reduced 
     by the aggregate amount allocated under this paragraph to 
     possessions of the United States.
       ``(4) Allocations for indian schools.--In addition to the 
     amounts otherwise allocated under this subsection, 
     $200,000,000 for calendar year 2002, and $200,000,000 for 
     calendar year 2003, shall be allocated by the Secretary of 
     the Interior for purposes of the construction, 
     rehabilitation, and repair of schools funded by the Bureau of 
     Indian Affairs. In the case of amounts allocated under the 
     preceding sentence, Indian tribal governments (as defined in 
     section 7871) shall be treated as qualified issuers for 
     purposes of this subchapter.
       ``(e) 40 Percent of Limitation Allocated Among Largest 
     School Districts.--
       ``(1) In general.--40 percent of the limitation applicable 
     under subsection (c) for any calendar year shall be allocated 
     under paragraph (2) by the Secretary among local educational 
     agencies which are large local educational agencies for such 
     year.
       ``(2) Allocation formula.--The amount to be allocated under 
     paragraph (1) for any calendar year shall be allocated among 
     large local educational agencies in proportion to the 
     respective amounts each such agency received for Basic Grants 
     under subpart 2 of part A of title I of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for 
     the most recent fiscal year ending before such calendar year.
       ``(3) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local educational 
     agency for any calendar year may be reallocated by such 
     agency to the State in which such agency is located for such 
     calendar year. Any amount reallocated to a State under the 
     preceding sentence may be allocated as provided in subsection 
     (d)(1).
       ``(4) Large local educational agency.--For purposes of this 
     section, the term `large local educational agency' means, 
     with respect to a calendar year, any local educational agency 
     if such agency is--
       ``(A) among the 100 local educational agencies with the 
     largest numbers of children aged 5 through 17 from families 
     living below the poverty level, as determined by the 
     Secretary using the most recent data available from the 
     Department of Commerce that are satisfactory to the 
     Secretary, or
       ``(B) 1 of not more than 25 local educational agencies 
     (other than those described in subparagraph (A)) that the 
     Secretary of Education determines (based on the most recent 
     data available satisfactory to the Secretary) are in 
     particular need of assistance, based on a low level of 
     resources for school construction, a high level of enrollment 
     growth, or such other factors as the Secretary deems 
     appropriate.
       ``(f) Carryover of Unused Limitation.--If for any calendar 
     year--
       ``(1) the amount allocated under subsection (d) to any 
     State, exceeds
       ``(2) the amount of bonds issued during such year which are 
     designated under subsection (a) pursuant to such allocation,
     the limitation amount under such subsection for such State 
     for the following calendar year shall be increased by the 
     amount of such excess. A similar rule shall apply to the 
     amounts allocated under subsection (d)(4) or (e).
       ``(g) Special Rules Relating to Arbitrage.--
       ``(1) In general.--A bond shall not be treated as failing 
     to meet the requirement of subsection (a)(1) solely by reason 
     of the fact that the proceeds of the issue of which such bond 
     is a part are invested for a temporary period (but not more 
     than 36 months) until such proceeds are needed for the 
     purpose for which such issue was issued.
       ``(2) Binding commitment requirement.--Paragraph (1) shall 
     apply to an issue only if,

[[Page 27520]]

     as of the date of issuance, there is a reasonable expectation 
     that--
       ``(A) at least 10 percent of the proceeds of the issue will 
     be spent within the 6-month period beginning on such date for 
     the purpose for which such issue was issued, and
       ``(B) the remaining proceeds of the issue will be spent 
     with due diligence for such purpose.
       ``(3) Earnings on proceeds.--Any earnings on proceeds 
     during the temporary period shall be treated as proceeds of 
     the issue for purposes of applying subsection (a)(1) and 
     paragraph (1) of this subsection.

     ``SEC. 1400M. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bond.--For purposes of this 
     subchapter--
       ``(1) In general.--The term `qualified zone academy bond' 
     means any bond issued as part of an issue if--
       ``(A) 95 percent or more of the proceeds of such issue are 
     to be used for a qualified purpose with respect to a 
     qualified zone academy established by a local educational 
     agency,
       ``(B) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located,
       ``(C) the issuer--
       ``(i) designates such bond for purposes of this section,
       ``(ii) certifies that it has written assurances that the 
     private business contribution requirement of paragraph (2) 
     will be met with respect to such academy, and
       ``(iii) certifies that it has the written approval of the 
     local educational agency for such bond issuance, and
       ``(D) the term of each bond which is part of such issue 
     does not exceed 15 years.
     Rules similar to the rules of section 1400L(g) shall apply 
     for purposes of paragraph (1).
       ``(2) Private business contribution requirement.--
       ``(A) In general.--For purposes of paragraph (1), the 
     private business contribution requirement of this paragraph 
     is met with respect to any issue if the local educational 
     agency that established the qualified zone academy has 
     written commitments from private entities to make qualified 
     contributions having a present value (as of the date of 
     issuance of the issue) of not less than 10 percent of the 
     proceeds of the issue.
       ``(B) Qualified contributions.--For purposes of 
     subparagraph (A), the term `qualified contribution' means any 
     contribution (of a type and quality acceptable to the local 
     educational agency) of--
       ``(i) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),
       ``(ii) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(iii) services of employees as volunteer mentors,
       ``(iv) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(v) any other property or service specified by the local 
     educational agency.
       ``(3) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of a local educational agency to provide 
     education or training below the postsecondary level if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with business to enhance the academic 
     curriculum, increase graduation and employment rates, and 
     better prepare students for the rigors of college and the 
     increasingly complex workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the local 
     educational agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the local educational 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(4) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) constructing, rehabilitating, or repairing the public 
     school facility in which the academy is established,
       ``(B) acquiring the land on which such facility is to be 
     constructed with part of the proceeds of such issue,
       ``(C) providing equipment for use at such academy,
       ``(D) developing course materials for education to be 
     provided at such academy, and
       ``(E) training teachers and other school personnel in such 
     academy.
       ``(b) Limitations on Amount of Bonds Designated.--
       ``(1) In general.--There is a national zone academy bond 
     limitation for each calendar year. Such limitation is--
       ``(A) $400,000,000 for 1998,
       ``(B) $400,000,000 for 1999,
       ``(C) $400,000,000 for 2000,
       ``(D) $400,000,000 for 2001,
       ``(E) $1,400,000,000 for 2002, and
       ``(F) except as provided in paragraph (3), zero after 2002.
       ``(2) Allocation of limitation.--
       ``(A) Allocation among states.--
       ``(i) 1998, 1999, 2000, and 2001 limitations.--The national 
     zone academy bond limitations for calendar years 1998, 1999, 
     2000, and 2001 shall be allocated by the Secretary among the 
     States on the basis of their respective populations of 
     individuals below the poverty line (as defined by the Office 
     of Management and Budget).
       ``(ii) Limitation after 2001.--The national zone academy 
     bond limitation for any calendar year after 2001 shall be 
     allocated by the Secretary among the States in proportion to 
     the respective amounts each such State received for Basic 
     Grants under subpart 2 of part A of title I of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) 
     for the most recent fiscal year ending before such calendar 
     year.
       ``(B) Allocation to local educational agencies.--The 
     limitation amount allocated to a State under subparagraph (A) 
     shall be allocated by the State to qualified zone academies 
     within such State.
       ``(C) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     subparagraph (B) for such calendar year.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the limitation amount under this subsection for any 
     State, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (a) (or the corresponding 
     provisions of prior law) with respect to qualified zone 
     academies within such State,
     the limitation amount under this subsection for such State 
     for the following calendar year shall be increased by the 
     amount of such excess.''
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(8) Reporting of credit on qualified public school 
     modernization bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 1400K(f) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 
     1400K(d)(2)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''
       (c) Conforming Amendments.--
       (1) Subchapter U of chapter 1 is amended by striking part 
     IV, by redesignating part V as part IV, and by redesignating 
     section 1397F as section 1397E.
       (2) The table of subchapters for chapter 1 is amended by 
     adding at the end the following new item:

``Subchapter Y. Public school modernization provisions.''
       (3) The table of parts of subchapter U of chapter 1 is 
     amended by striking the last 2 items and inserting the 
     following item:

``Part IV. Regulations.''
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to obligations issued after December 31, 2001.
       (2) Repeal of restriction on zone academy bond holders.--In 
     the case of bonds to which section 1397E of the Internal 
     Revenue Code of 1986 (as in effect before the date of the 
     enactment of this Act) applies, the limitation of such 
     section to eligible taxpayers (as defined in subsection 
     (d)(6) of such section) shall not apply after the date of the 
     enactment of this Act.

                        TITLE II--WORKER RELIEF

            Subtitle A--Temporary Unemployment Compensation

     SEC. 201. SHORT TITLE.

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

     SEC. 202. FEDERAL-STATE AGREEMENTS.

       (a) In General.--Any State which desires to do so may enter 
     into and participate in an agreement under this subtitle with 
     the Secretary of Labor (hereinafter in this subtitle referred 
     to as the ``Secretary''). Any State which is a party to an 
     agreement under this subtitle may, upon providing 30 days' 
     written notice to the Secretary, terminate such agreement.

[[Page 27521]]

       (b) Provisions of Agreement.--
       (1) In general.--Any agreement under subsection (a) shall 
     provide that the State agency of the State will make--
       (A) payments of regular compensation to individuals in 
     amounts and to the extent that they would be determined if 
     the State law were applied with the modifications described 
     in paragraph (2), and
       (B) payments of temporary supplemental unemployment 
     compensation to individuals who--
       (i) have exhausted all rights to regular compensation under 
     the State law,
       (ii) do not, with respect to a week, have any rights to 
     compensation (excluding extended compensation) under the 
     State law of any other State (whether one that has entered 
     into an agreement under this subtitle or otherwise) nor 
     compensation under any other Federal law (other than under 
     the Federal-State Extended Unemployment Compensation Act of 
     1970), and are not paid or entitled to be paid any additional 
     compensation under any State or Federal law, and
       (iii) are not receiving compensation with respect to such 
     week under the unemployment compensation law of Canada.
       (2) Modifications described.--The modifications described 
     in this paragraph are as follows:
       (A) An individual shall be eligible for regular 
     compensation if the individual would be so eligible, 
     determined by applying--
       (i) the base period that would otherwise apply under the 
     State law if this subtitle had not been enacted, or
       (ii) a base period ending at the close of the calendar 
     quarter most recently completed before the date of the 
     individual's application for benefits,
     whichever results in the greater amount.
       (B) An individual shall not be denied regular compensation 
     under the State law's provisions relating to availability for 
     work, active search for work, or refusal to accept work, 
     solely by virtue of the fact that such individual is seeking, 
     or available for, only part-time (and not full-time) work.
       (C)(i) Subject to clause (ii), the amount of regular 
     compensation (including dependents' allowances) payable for 
     any week shall be equal to the amount determined under the 
     State law (before the application of this subparagraph), plus 
     an additional--
       (I) 25 percent, or
       (II) $65,
     whichever is greater.
       (ii) In no event may the total amount determined under 
     clause (i) with respect to any individual exceed the average 
     weekly insured wages of that individual in that calendar 
     quarter of the base period in which such individual's insured 
     wages were the highest (or one such quarter if his wages were 
     the same for more than one such quarter).
       (c) Nonreduction Rule.--Under the agreement, subsection 
     (b)(2)(C) shall not apply (or shall cease to apply) with 
     respect to a State upon a determination by the Secretary that 
     the method governing the computation of regular compensation 
     under the State law of that State has been modified in a way 
     such that--
       (1) the average weekly amount of regular compensation which 
     will be payable during the period of the agreement 
     (determined disregarding the modifications described in 
     subsection (b)(2)) will be less than
       (2) the average weekly amount of regular compensation which 
     would otherwise have been payable during such period under 
     the State law, as in effect on September 11, 2001.
       (d) Coordination Rules.--
       (1) Regular compensation payable under a federal law.--The 
     modifications described in subsection (b)(2) shall also apply 
     in determining the amount of benefits payable under any 
     Federal law to the extent that those benefits are determined 
     by reference to regular compensation payable under the State 
     law of the State involved.
       (2) TSUC to serve as second-tier benefits.--Notwithstanding 
     any other provision of law, extended benefits shall not be 
     payable to any individual for any week for which temporary 
     supplemental unemployment compensation is payable to such 
     individual.
       (e) Exhaustion of Benefits.--For purposes of subsection 
     (b)(1)(B)(i), an individual shall be considered to have 
     exhausted such individual's rights to regular compensation 
     under a State law when--
       (1) no payments of regular compensation can be made under 
     such law because such individual has received all regular 
     compensation available to such individual based on employment 
     or wages during such individual's base period, or
       (2) such individual's rights to such compensation have been 
     terminated by reason of the expiration of the benefit year 
     with respect to which such rights existed.
       (f) Weekly Benefit Amount, Terms and Conditions, etc. 
     Relating to TSUC.--For purposes of any agreement under this 
     subtitle--
       (1) the amount of temporary supplemental 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 supplemental unemployment 
     compensation and the payment thereof, except where 
     inconsistent with the provisions of this subtitle or with the 
     regulations or operating instructions of the Secretary 
     promulgated to carry out this subtitle, and
       (3) the maximum amount of temporary supplemental 
     unemployment compensation payable to any individual for whom 
     a temporary supplemental unemployment compensation account is 
     established under section 203 shall not exceed the amount 
     established in such account for such individual.

     SEC. 203. TEMPORARY SUPPLEMENTAL UNEMPLOYMENT COMPENSATION 
                   ACCOUNT.

       (a) In General.--Any agreement under this subtitle shall 
     provide that the State will establish, for each eligible 
     individual who files an application for temporary 
     supplemental unemployment compensation, a temporary 
     supplemental unemployment compensation account.
       (b) Amount in Account.--
       (1) In general.--The amount established in an account under 
     subsection (a) shall be equal to the product obtained by 
     multiplying an individual's weekly benefit amount by the 
     applicable factor under paragraph (3).
       (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 a week of total unemployment in such 
     individual's benefit year.
       (3) Applicable factor.--
       (A) General rule.--The applicable factor under this 
     paragraph is 13, unless the individual's benefit year begins 
     or ends during a period of high unemployment within such 
     individual's State, in which case the applicable factor is 
     26.
       (B) Period of high unemployment.--For purposes of this 
     paragraph, a period of high unemployment within a State shall 
     begin and end, if at all, in a way (to be set forth in the 
     State's agreement under this subtitle) similar to the way in 
     which an extended benefit period would under section 203 of 
     the Federal-State Extended Unemployment Compensation Act of 
     1970, subject to the following:
       (i) To determine if there is a State ``on'' or ``off'' 
     indicator, apply section 203(f) of such Act, but--

       (I) substitute ``5 percent'' for ``6.5 percent'' in 
     paragraph (1)(A)(i) thereof, and
       (II) disregard paragraph (1)(A)(ii) thereof and the last 
     sentence of paragraph (1) thereof.

       (ii) To determine the beginning and ending dates of a 
     period of high unemployment within a State, apply section 
     203(a) and (b) of such Act, except that--

       (I) in applying such section 203(a), deem paragraphs (1) 
     and (2) thereof to be amended by striking ``the third week 
     after'', and
       (II) in applying such section 203(b), deem paragraph (1)(A) 
     thereof amended by striking ``thirteen'' and inserting 
     ``twenty-six'' and paragraph (1)(B) thereof amended by 
     striking ``fourteenth'' and inserting ``twenty-seventh''.

       (4) Rule of construction.--For purposes of any computation 
     under paragraph (1) (and any determination of amount under 
     section 202(f)(1)), the modification described in section 
     202(b)(2)(C) (relating to increased benefits) shall be deemed 
     to have been in effect with respect to the entirety of the 
     benefit year involved.
       (c) Eligibility Period.--An individual whose applicable 
     factor under subsection (b)(3) is 26 shall be eligible for 
     temporary supplemental unemployment compensation for each 
     week of total unemployment in his benefit year which begins 
     in the State's period of high unemployment and, if his 
     benefit year ends within such period, any such weeks 
     thereafter which begin in such period of high unemployment, 
     not to exceed a total of 26 weeks.

     SEC. 204. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS 
                   SUBTITLE.

       (a) General Rule.--There shall be paid to each State which 
     has entered into an agreement under this subtitle an amount 
     equal to--
       (1) 100 percent of any regular compensation made payable to 
     individuals by such State by virtue of the modifications 
     which are described in section 202(b)(2) and deemed to be in 
     effect with respect to such State pursuant to section 
     202(b)(1)(A),
       (2) 100 percent of any regular compensation--
       (A) which is paid to individuals by such State by reason of 
     the fact that its State law contains provisions comparable to 
     the modifications described in section 202(b)(2)(A)-(B), but 
     only
       (B) to the extent that those amounts would, if such amounts 
     were instead payable by virtue of the State law's being 
     deemed to be so modified pursuant to section 202(b)(1)(A), 
     have been reimbursable under paragraph (1), and
       (3) 100 percent of the temporary supplemental unemployment 
     compensation paid to individuals by the State pursuant to 
     such agreement.

[[Page 27522]]

       (b) Determination of Amount.--Sums under subsection (a) 
     payable to any State by reason of such State having an 
     agreement under this subtitle 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 subtitle 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, etc.--There is hereby 
     appropriated out of the employment security administration 
     account of the Unemployment Trust Fund (as established by 
     section 901(a) of the Social Security Act) $500,000,000 to 
     reimburse States for the costs of the administration of 
     agreements under this subtitle (including any improvements in 
     technology in connection therewith) and to provide 
     reemployment services to unemployment compensation claimants 
     in States having agreements under this subtitle. Each State's 
     share of the amount appropriated by the preceding sentence 
     shall be determined by the Secretary according to the factors 
     described in section 302(a) of the Social Security Act and 
     certified by the Secretary to the Secretary of the Treasury.

     SEC. 205. FINANCING PROVISIONS.

       (a) In General.--Funds in the extended unemployment 
     compensation account (as established by section 905(a) of the 
     Social Security Act), and the Federal unemployment account 
     (as established by section 904(g) of the Social Security 
     Act), of the Unemployment Trust Fund shall be used, in 
     accordance with subsection (b), for the making of payments 
     (described in section 204(a)) to States having agreements 
     entered into under this subtitle.
       (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 204(a) which are payable 
     to such State under this subtitle. 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 (or, to the extent 
     that there are insufficient funds in that account, from the 
     Federal unemployment account) to the account of such State in 
     the Unemployment Trust Fund.

     SEC. 206. 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 regular 
     compensation or temporary supplemental unemployment 
     compensation under this subtitle to which he was not 
     entitled, such individual--
       (1) shall be ineligible for any further benefits under this 
     subtitle 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 regular compensation or temporary supplemental 
     unemployment compensation under this subtitle to which they 
     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 supplemental unemployment 
     compensation payable to such individual under this subtitle 
     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 regular 
     compensation or temporary supplemental 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. 207. DEFINITIONS.

       For purposes of this subtitle:
       (1) In general.--The terms ``compensation'', ``regular 
     compensation'', ``extended compensation'', ``additional 
     compensation'', ``benefit year'', ``base period'', ``State'', 
     ``State agency'', ``State law'', and ``week'' have the 
     respective meanings given such terms under section 205 of the 
     Federal-State Extended Unemployment Compensation Act of 1970, 
     subject to paragraph (2).
       (2) State law and regular compensation.--In the case of a 
     State entering into an agreement under this subtitle--
       (A) ``State law'' shall be considered to refer to the State 
     law of such State, applied in conformance with the 
     modifications described in section 202(b)(2), subject to 
     section 202(c), and
       (B) ``regular compensation'' shall be considered to refer 
     to such compensation, determined under its State law (applied 
     in the manner described in subparagraph (A)),
     except as otherwise provided or where the context clearly 
     indicates otherwise.

     SEC. 208. APPLICABILITY.

       (a) In General.--An agreement entered into under this 
     subtitle 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.
       (b) Specific Rules.--Under such an agreement--
       (1) the modification described in section 202(b)(2)(A) 
     (relating to alternative base periods) shall not apply except 
     in the case of initial claims filed after September 11, 2001,
       (2) the modifications described in section 202(b)(2)(B)-(C) 
     (relating to part-time employment and increased benefits, 
     respectively) shall apply to weeks of unemployment (described 
     in subsection (a)), irrespective of the date on which an 
     individual's claim for benefits is filed, and
       (3) the payments described in section 202(b)(1)(B) 
     (relating to temporary supplemental unemployment 
     compensation) shall not apply except in the case of 
     individuals exhausting their rights to regular compensation 
     (as described in clause (i) thereof) after September 11, 
     2001.

     SEC. 209. SPECIAL REED ACT TRANSFER IN FISCAL YEAR 2002.

       (a) In General.--Section 903 of the Social Security Act is 
     amended by adding at the end the following:

                 ``Special Transfer in Fiscal Year 2002

       ``(d)(1) In the case of each State which enters into an 
     agreement under the Temporary Unemployment Compensation Act 
     of 2001, the Secretary of the Treasury shall transfer from 
     the Federal unemployment account to the account of such State 
     in the Unemployment Trust Fund the amount determined with 
     respect to such State under paragraph (2).
       ``(2) The amount to be transferred under this subsection to 
     a State account shall be equal to the amount which the 
     Secretary of Labor estimates would otherwise be transferred 
     under this section to such State account as of the beginning 
     of fiscal year 2003 (determined disregarding this subsection 
     and sections 202-208 of the Temporary Unemployment 
     Compensation Act of 2001, and assuming that the conditions 
     triggering the application of subsection (b) do not apply).
       ``(3) A transfer under this subsection to a State account 
     shall be made as soon as practicable once such State has 
     entered into an agreement referred to in paragraph (1).
       ``(4) Amounts transferred to a State account under this 
     subsection shall not be subject to the last sentence of 
     subsection (c)(2).''
       (b) 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)(3)'' 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)(3))'' 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)''.
       (c) Technical Amendment.--Section 903(c) of the Social 
     Security Act is amended by striking ``subsections (a) and 
     (b)'' each place it appears and inserting ``subsections (a), 
     (b), and (d)''.
       (d) 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 27523]]



     Subtitle B--PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE

     SEC. 211. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE.

       (a) Establishment.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Labor, shall establish a 
     program under which premium assistance for COBRA continuation 
     coverage shall be provided for qualified individuals under 
     this section.
       (2) Qualified individuals.--For purposes of this section, a 
     qualified individual is an individual who--
       (A) establishes that the individual--
       (i) on or after July 1, 2001, and before the end of the 1-
     year period beginning on the date of the enactment of this 
     Act, became entitled to elect COBRA continuation coverage; 
     and
       (ii) has elected such coverage; and
       (B) enrolls in the premium assistance program under this 
     section by not later than the end of such 1-year period.
       (b) Limitation of Period of Premium Assistance.--Premium 
     assistance provided under this subsection shall end with 
     respect to an individual on the earlier of--
       (1) the date the individual is no longer covered under 
     COBRA continuation coverage; or
       (2) 12 months after the date the individual is first 
     enrolled in the premium assistance program established under 
     this section.
       (c) Payment, and Crediting of Assistance.--
       (1) Amount of assistance.--Premium assistance provided 
     under this section shall be equal to 75 percent of the amount 
     of the premium required for the COBRA continuation coverage.
       (2) Provision of assistance.--Premium assistance provided 
     under this section shall be provided through the 
     establishment of direct payment arrangements with the 
     administrator of the group health plan (or other entity) that 
     provides or administers the COBRA continuation coverage. It 
     shall be a fiduciary duty of such administrator (or other 
     entity) to enter into such arrangements under this section.
       (3) Premiums payable by qualified individual reduced by 
     amount of assistance.--Premium assistance provided under this 
     section shall be credited by such administrator (or other 
     entity) against the premium otherwise owed by the individual 
     involved for such coverage.
       (d) Change in COBRA Notice.--
       (1) General notice.--
       (A) In general.--In the case of notices provided under 
     section 4980B(f)(6) of the Internal Revenue Code of 1986 with 
     respect to individuals who, on or after July 1, 2001, and 
     before the end of the 1-year period beginning on the date of 
     the enactment of this Act, become entitled to elect COBRA 
     continuation coverage, such notices shall include an 
     additional notification to the recipient of the availability 
     of premium assistance for such coverage under this section.
       (B) Alternative notice.--In the case of COBRA continuation 
     coverage to which the notice provision under section 
     4980B(f)(6) of the Internal Revenue Code of 1986 does not 
     apply, the Secretary of the Treasury shall, in coordination 
     with administrators of the group health plans (or other 
     entities) that provide or administer the COBRA continuation 
     coverage involved, assure provision of such notice.
       (C) Form.--The requirement of the additional notification 
     under this paragraph may be met by amendment of existing 
     notice forms or by inclusion of a separate document with the 
     notice otherwise required.
       (2) Specific requirements.--Each additional notification 
     under paragraph (1) shall include--
       (A) the forms necessary for establishing eligibility under 
     subsection (a)(2)(A) and enrollment under subsection 
     (a)(2)(B) in connection with the coverage with respect to 
     each covered employee or other qualified beneficiary;
       (B) the name, address, and telephone number necessary to 
     contact the plan administrator and any other person 
     maintaining relevant information in connection with the 
     premium assistance; and
       (C) the following statement displayed in a prominent 
     manner:
       ``You may be eligible to receive assistance with payment of 
     75 percent of your COBRA continuation coverage premiums for a 
     duration of not to exceed 12 months.''.
       (3) Notice relating to retroactive coverage.--In the case 
     of such notices previously transmitted before the date of the 
     enactment of this Act in the case of an individual described 
     in paragraph (1) who has elected (or is still eligible to 
     elect) COBRA continuation coverage as of the date of the 
     enactment of this Act, the administrator of the group health 
     plan (or other entity) involved or the Secretary of the 
     Treasury (in the case described in the paragraph (1)(B)) 
     shall provide (within 60 days after the date of the enactment 
     of this Act) for the additional notification required to be 
     provided under paragraph (1).
       (4) Model notices.--The Secretary shall prescribe models 
     for the additional notification required under this 
     subsection.
       (f) Obligation of Funds.--This section constitutes budget 
     authority in advance of appropriations Acts and represents 
     the obligation of the Federal Government to provide for the 
     payment of premium assistance under this section.
       (g) Prompt Issuance of Guidance.--The Secretary of the 
     Treasury, in consultation with the Secretary of Labor, shall 
     issue guidance under this section not later than 30 days 
     after the date of the enactment of this Act.
       (h) Definitions.--In this section:
       (1) Administrator.--The term ``administrator'' has the 
     meaning given such term in section 3(16) of the Employee 
     Retirement Income Security Act of 1974.
       (2) COBRA continuation coverage.--The term ``COBRA 
     continuation coverage'' means continuation coverage provided 
     pursuant to title XXII of the Public Health Service Act, 
     section 4980B of the Internal Revenue Code of 1986 (other 
     than subsection (f)(1) of such section insofar as it relates 
     to pediatric vaccines), part 6 of of title I of the Employee 
     Retirement Income Security Act of 1974 (other than under 
     section 609), section 8905a of title 5, United States Code, 
     or under a State program that provides continuation coverage 
     comparable to such continuation coverage.
       (3) Group health plan.--The term ``group health plan'' has 
     the meaning given such term in section 9832(a) of the 
     Internal Revenue Code of 1986.
       (4) State.--The term ``State'' includes the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and the Commonwealth of the 
     Northern Mariana Islands.

   Subtitle C--Additional Assistance for Temporary Health Insurance 
                                Coverage

     SEC. 221. OPTIONAL TEMPORARY MEDICAID COVERAGE FOR CERTAIN 
                   UNINSURED EMPLOYEES.

       (a) In General.--Notwithstanding any other provision of 
     law, with respect to any month before the ending month, a 
     State may elect to provide, under its medicaid program under 
     title XIX of the Social Security Act, medical assistance in 
     the case of an individual--
       (1)(A) who has become totally or partially separated from 
     employment on or after July 1, 2001, and before the end of 
     such ending month; or
       (B) whose hours of employment have been reduced on or after 
     July 1, 2001, and before the end of such ending month;
       (2) who is not eligible for COBRA continuation coverage; 
     and
       (3) who is uninsured.
       (b) Limitation of Period of Coverage.--Assistance under 
     this section shall end with respect to an individual on the 
     earlier of--
       (1) the date the individual is no longer uninsured; or
       (2) 12 months after the date the individual is first 
     determined to be eligible for medical assistance under this 
     section.
       (c) Special Rules.--In the case of medical assistance 
     provided under this section--
       (1) the Federal medical assistance percentage under section 
     1905(b) of the Social Security Act shall be the enhanced FMAP 
     (as defined in section 2105(b) of such Act);
       (2) a State may elect to apply alternative income, asset, 
     and resource limitations and the provisions of section 
     1916(g) of such Act, except that in no case shall a State 
     cover individuals with higher family income without covering 
     individuals with a lower family income;
       (3) such medical assistance shall not be provided for 
     periods before the date the individual becomes uninsured;
       (4) a State may elect to make eligible for such assistance 
     a spouse or children of an individual eligible for medical 
     assistance under paragraph (1), if such spouse or children 
     are uninsured;
       (5) individuals eligible for medical assistance under this 
     section shall be deemed to be described in the list of 
     individuals described in the matter preceding paragraph (1) 
     of section 1905(a) of such Act;
       (6) a State may elect to provide such medical assistance 
     without regard to any limitation under sections 401(a), 
     402(b), 403, and 421 of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (8 U.S.C. 1611(a), 
     1612(b), 1613, and 1631) and no debt shall accrue under an 
     affidavit of support against any sponsor of an individual who 
     is an alien who is provided such assistance, and the cost of 
     such assistance shall not be considered as an unreimbursed 
     cost; and
       (7) the Secretary of Health and Human Services shall not 
     count, for purposes of section 1108(f) of the Social Security 
     Act, such amount of payments under this section as bears a 
     reasonable relationship to the average national proportion of 
     payments made under this section for the 50 States and the 
     District of Columbia to the payments otherwise made under 
     title XIX for such States and District.
       (d) Definitions.--For purposes of this subtitle:
       (1) Uninsured.--The term ``uninsured'' means, with respect 
     to an individual, that the individual is not covered under--
       (A) a group health plan (as defined in section 2791(a) of 
     the Public Health Service Act),

[[Page 27524]]

       (B) health insurance coverage (as defined in section 
     2791(b)(1) of the Public Health Service Act), or
       (C) a program under title XVIII, XIX, or XXI of the Social 
     Security Act, other than under such title XIX pursuant to 
     this section.
     For purposes of this paragraph, such coverage under 
     subparagraph (A) or (B) shall not include coverage consisting 
     solely of coverage of excepted benefits (as defined in 
     section 2791(c) of the Public Health Service Act).
       (2) COBRA continuation coverage.--The term ``COBRA 
     continuation coverage'' means coverage under a group health 
     plan provided by an employer pursuant to title XXII of the 
     Public Health Service Act, section 4980B of the Internal 
     Revenue Code of 1986, part 6 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974, or section 
     8905a of title 5, United States Code.
       (3) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act.
       (4) Ending month.--The term ``ending month'' means the last 
     month that begins before the date that is 1 year after the 
     date of the enactment of this Act.
       (e) Effective Date.--This section shall take effect upon 
     its enactment, whether or not regulations implementing this 
     section are issued.
       (f) Limitation on Election.--A State may not elect to 
     provide coverage under this section unless the State elects 
     to provide coverage under section 222.

     SEC. 222. OPTIONAL TEMPORARY COVERAGE FOR UNSUBSIDIZED 
                   PORTION OF COBRA CONTINUATION PREMIUMS.

       (a) In General.--Notwithstanding any other provision of 
     law, with respect to COBRA continuation coverage provided for 
     any month through the ending month, a State may elect to 
     provide payment of the unsubsidized portion of the premium 
     for COBRA continuation coverage in the case of any 
     individual--
       (1)(A) who has become totally or partially separated from 
     employment on or after July 1, 2001, and before the end of 
     the ending month; or
       (B) whose hours of employment have been reduced on or after 
     July 1, 2001, and before the end of such ending month; and
       (2) who is eligible for, and has elected coverage under, 
     COBRA continuation coverage.
       (b) Limitation of Period of Coverage.--Premium assistance 
     under this section shall end with respect to an individual on 
     the earlier of--
       (1) the date the individual is no longer covered under 
     COBRA continuation coverage; or
       (2) 12 months after the date the individual is first 
     determined to be eligible for premium assistance under this 
     section.
       (c) Financial Payment to States.--A State providing premium 
     assistance under this section shall be entitled to payment 
     under section 1903(a) of the Social Security Act with respect 
     to such assistance (and administrative expenses relating to 
     such assistance) in the same manner as such State is entitled 
     to payment with respect to medical assistance (and such 
     administrative expenses) under such section, except that, for 
     purposes of this subsection, any reference to the Federal 
     medical assistance percentage shall be deemed a reference to 
     the enhanced FMAP (as defined in section 2105(b) of such 
     Act). The provisions of subsections (c)(6) and (c)(7) of 
     section 221 shall apply with respect to this section in the 
     same manner as it applies under such section.
       (d) Unsubsidized Portion of Premium for COBRA Continuation 
     Coverage.--For purposes of this section, the term 
     `unsubsidized portion of premium for COBRA continuation 
     coverage' means that portion of the premium for COBRA 
     continuation coverage for which there is no financial 
     assistance available under 211.
       (e) Effective Date.--This section shall take effect upon 
     its enactment, whether or not regulations implementing this 
     section are issued.
       (f) Limitation on Election.--A State may not elect to 
     provide coverage under this section unless the State elects 
     to provide coverage under section 221.

 Subtitle D--Temporary Increases of Medicaid FMAP For Fiscal Year 2002

     SEC. 231. TEMPORARY INCREASES OF MEDICAID FMAP FOR FISCAL 
                   YEAR 2002.

       (a) Permitting Maintenance of Fiscal Year 2001 FMAP.--
     Notwithstanding any other provision of law, but subject to 
     subsection (d), if the FMAP determined without regard to this 
     section for a State for fiscal year 2002 is less than the 
     FMAP as so determined for fiscal year 2001, the FMAP for the 
     State for fiscal year 2001 shall be substituted for the 
     State's FMAP for fiscal year 2002, before the application of 
     this section.
       (b) General 1.5 Percentage Point Increase.--Notwithstanding 
     any other provision of law, but subject to subsections (d) 
     and (e), for each State for each calendar quarter in fiscal 
     year 2002, the FMAP (taking into account the application of 
     subsection (a)) shall be increased by 1.5 percentage points.
       (c) Further Increase for States with High Unemployment 
     Rates.--
       (1) In general.--Notwithstanding any other provision of 
     law, but subject to subsections (d) and (e), if a State is a 
     high unemployment State for a calendar quarter in fiscal year 
     2002, then the FMAP for that State for that calendar quarter 
     and for any subsequent calendar quarter in such fiscal year 
     regardless of whether the State continues to be high 
     unemployment State for that subsequent calendar quarter shall 
     be increased (after the application of subsections (a) and 
     (b)) by 1.5 percentage points.
       (2) High unemployment state.--For purposes of this 
     subsection, a State is a high unemployment State for a 
     calendar quarter if, for any 3 consecutive month period 
     beginning on or after June 2001 and ending with the second 
     month before the beginning of the calendar quarter, the State 
     has an average seasonally adjusted unemployment rate that 
     exceeds the average weighted unemployment rate during such 
     period. Such unemployment rates for such months shall be 
     determined based on publications of the Bureau of Labor 
     Statistics of the Department of Labor.
       (3) Average weighted unemployment rate defined.--For 
     purposes of paragraph (2), the ``average weighted 
     unemployment rate'' for a period is--
       (A) the sum of the seasonally adjusted number of unemployed 
     civilians in each State and the District of Columbia for the 
     period, divided by
       (B) the sum of the civilian labor force in each State and 
     the District of Columbia for the period.
       (d) Scope of Application.--The increases in the FMAP for a 
     State under this section shall apply only for purposes of 
     title XIX of the Social Security Act and shall not apply with 
     respect to--
       (1) disproportionate share hospital payments described in 
     section 1923 of such Act; and
       (2) payments under titles IV and XXI of such Act.
       (e) State Eligibility.--A State is eligible for an increase 
     in its FMAP under subsection (b) or (c) or an increase in a 
     cap amount under subsection (f) only if the eligibility under 
     its State plan under title XIX of the Social Security Act 
     (including any waiver under such title or under section 1115 
     of such Act) is no more restrictive than the eligibility 
     under such plan (or waiver) as in effect on October 1, 2001.
       (f) One-Year Increase in Cap on Medicaid Payments to 
     Territories.--Notwithstanding any other provision of law, but 
     subject to section (e), with respect to fiscal year 2002, the 
     amounts otherwise determined for Puerto Rico, the Virgin 
     Islands, Guam, the Northern Mariana Islands, and American 
     Samoa under subsections (f) and (g)(2) of section 1108 of the 
     Social Security Act (42 U.S.C 1308) shall each be increased 
     by 9 percent of such amounts.
       (g) Definitions.--For purposes of this section:
       (1) FMAP.--The term ``FMAP'' means the Federal medical 
     assistance percentage, as defined in section 1905(b) of the 
     Social Security Act (42 U.S.C. 1396d(b)).
       (2) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act.

                   Subtitle E--Other Medicaid Changes

     SEC. 241. PERMANENT APPLICATION OF BBA MEDICAID DSH 
                   TRANSITION PAYMENT RULE TO PUBLIC HOSPITALS IN 
                   ALL STATES.

       (a) In General.--Section 701(c) of the Medicare, Medicaid, 
     and SCHIP Benefits Improvement and Protection Act of 2000 
     (114 Stat. 2763A-571) (as enacted into law by section 1(a)(6) 
     of Public Law 106-554) is amended--
       (1) in paragraph (1), by striking ``During the period 
     described in paragraph (3), with respect to a State,'' and 
     inserting ``Beginning, with respect to a State, on the first 
     day of the first State fiscal year that begins after 
     September 30, 2002,'';
       (2) by striking paragraph (3); and
       (3) by redesignating paragraph (4) as paragraph (3).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the enactment of section 
     701(c) of the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (114 Stat. 2763A-571) 
     (as enacted into law by section 1(a)(6) of Public Law 106-
     554).

     SEC. 242. SUPPLEMENTAL PAYMENT PLANS.

       (a) In General.--With respect to a State described in 
     subsection (b), the aggregate upper payment limits applied 
     under sections 447.272, 447.304, and 447.321 of title 42, 
     Code of Federal Regulations (and any other applicable section 
     of part 447 of title 42, Code of Federal Regulations) shall 
     be no less than those limits specified in the final rule 
     issued January 12, 2001, pursuant to section 705(a) of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000 (114 Stat. 2763A-575) (as enacted into 
     law by section 1(a)(6) of Public Law 106-554).
       (b) State Described.--A State described in this subsection 
     is a State that had a State medicaid plan payment provision 
     or methodology (including a payment provision or methodology 
     approved under a waiver of the State medicaid plan) which--
       (1) provided for payments (other than those payments 
     required under section 1902(a)(13)(A)(iv) of the Social 
     Security Act (42 U.S.C. 1396a(a)(13)(A)(iv)) to hospitals for 
     services provided to recipients of medical assistance under 
     the State medicaid plan that

[[Page 27525]]

     are supplemental to payments otherwise payable to the 
     hospitals for such services; and
       (2) was approved, had been deemed approved, or was in 
     effect on or before October 1, 1992.
       (c) Applicability.--The provisions of this section shall 
     continue to apply to a State described in subsection (b) 
     regardless of any subsequent amendments or modifications to 
     the payment provision or methodology described in that 
     subsection.

     SEC. 243. DELAY IN MEDICAID UPL CHANGES FOR NON-STATE 
                   GOVERNMENT-OWNED OR OPERATED HOSPITALS.

       (a) Moratorium on UPL Changes.--Any change in the upper 
     limits on payment under title XIX of the Social Security Act 
     for services of non-State government-owned or operated 
     hospitals that are specified in sections 447.272 and 447.321 
     of title 42, Code of Federal Regulations as such sections 
     were in effect on March 13, 2001, whether based on the 
     proposed rule published on November 23, 2001, or otherwise --
       (1) may not be published in final form before January 1, 
     2003; and
       (2) may not apply for any period beginning before January 
     1, 2003.
       (b) Mitigation Plan.--The Secretary of Health and Human 
     Services shall submit to the Congress, at least 3 months 
     before publishing a final regulation described in subsection 
     (a), a report that contains a plan for mitigating the loss of 
     funding to non-State government-owned or operated hospitals 
     as a result of such regulation. Such report shall also 
     include such recommendations for legislative action as the 
     Secretary deems appropriates.

             TITLE III--TAX RELIEF FOR VICTIMS OF TERRORISM

     Subtitle A--Relief Provisions For Victims of Terrorist Attacks

     SEC. 301. INCOME AND EMPLOYMENT TAXES OF VICTIMS OF TERRORIST 
                   ATTACKS.

       (a) In General.--Section 692 (relating to income taxes of 
     members of Armed Forces on death) is amended by adding at the 
     end the following new subsection:
       ``(d) Individuals Dying as a Result of Certain Terrorist 
     Attacks.--
       ``(1) In general.--In the case of any individual who dies 
     as a result of wounds or injury incurred as a result of the 
     terrorist attacks against the United States on April 19, 
     1995, or September 11, 2001, or who dies as a result of 
     illness incurred as a result of a terrorist attack involving 
     anthrax occurring on or after September 11, 2001, and before 
     January 1, 2002, any tax imposed by this subtitle shall not 
     apply--
       ``(A) with respect to the taxable year in which falls the 
     date of such individual's death, and
       ``(B) with respect to any prior taxable year in the period 
     beginning with the last taxable year ending before the 
     taxable year in which the wounds, injury, or illness were 
     incurred.
       ``(2) Exceptions.--
       ``(A) Taxation of certain benefits.--Subject to such rules 
     as the Secretary may prescribe, paragraph (1) shall not apply 
     to the amount of any tax imposed by this subtitle which would 
     be computed by only taking into account the items of income, 
     gain, or other amounts attributable to--
       ``(i) amounts payable in the taxable year by reason of the 
     death of an individual described in paragraph (1) which would 
     have been payable in such taxable year if the death had 
     occurred by reason of an event other than an event described 
     in paragraph (1), or
       ``(ii) amounts payable in the taxable year which would not 
     have been payable in such taxable year but for an action 
     taken after the date of the applicable terrorist attack.
       ``(B) No relief for perpetrators.--Paragraph (1) shall not 
     apply with respect to any individual identified by the 
     Attorney General to have been a participant or conspirator in 
     any event described in paragraph (1), or a representative of 
     such individual.''.
       (b) Refund of Other Taxes Paid.--Section 692, as amended by 
     subsection (a), is amended by adding at the end the following 
     new subsection:
       ``(e) Refund of Other Taxes Paid.--In determining the 
     amount of tax under this section to be credited or refunded 
     as an overpayment with respect to any individual for any 
     period, such amount shall be increased by an amount equal to 
     the amount of taxes imposed and collected under chapter 21 
     and sections 3201(a), 3211(a)(1), and 3221(a) with respect to 
     such individual for such period.''.
       (c) Conforming Amendments.--
       (1) Section 5(b)(1) is amended by inserting ``and victims 
     of certain terrorist attacks'' before ``on death''.
       (2) Section 6013(f)(2)(B) is amended by inserting ``and 
     victims of certain terrorist attacks'' before ``on death''.
       (d) Clerical Amendments.--
       (1) The heading of section 692 is amended to read as 
     follows:

     ``SEC. 692. INCOME AND EMPLOYMENT TAXES OF MEMBERS OF ARMED 
                   FORCES AND VICTIMS OF CERTAIN TERRORIST ATTACKS 
                   ON DEATH.''.

       (2) The item relating to section 692 in the table of 
     sections for part II of subchapter J of chapter 1 is amended 
     to read as follows:

``Sec. 692. Income and employment taxes of members of Armed Forces and 
              victims of certain terrorist attacks on death.''.
       (e) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 302. ESTATE TAX REDUCTION.

       (a) In General.--Section 2201 is amended to read as 
     follows:

     ``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE 
                   ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN 
                   TERRORIST ATTACKS.

       ``(a) In General.--Unless the executor elects not to have 
     this section apply, in applying section 2001 to the estate of 
     a qualified decedent, the rate schedule set forth in 
     subsection (c) shall be deemed to be the rate schedule set 
     forth in section 2001(c).
       ``(b) Qualified Decedent.--For purposes of this section, 
     the term `qualified decedent' means--
       ``(1) any citizen or resident of the United States dying 
     while in active service of the Armed Forces of the United 
     States, if such decedent--
       ``(A) was killed in action while serving in a combat zone, 
     as determined under section 112(c), or
       ``(B) died as a result of wounds, disease, or injury 
     suffered while serving in a combat zone (as determined under 
     section 112(c)), and while in the line of duty, by reason of 
     a hazard to which such decedent was subjected as an incident 
     of such service, or
       ``(2) any individual who died as a result of wounds or 
     injury incurred as a result of the terrorist attacks against 
     the United States on April 19, 1995, or September 11, 2001, 
     or who died as a result of illness incurred as a result of a 
     terrorist attack involving anthrax occurring on or after 
     September 11, 2001, and before January 1, 2002.
     Paragraph (2) shall not apply with respect to any individual 
     identified by the Attorney General to have been a participant 
     or conspirator in any such terrorist attack, or a 
     representative of such individual.
       ``(c) Rate Schedule.--

``If the amount with respect to which the tentative tax to be computed 
The tentative tax is:
1 percent of the amount by which such amount exceeds $100,000..........
$500 plus 2 percent of the excess over $150,000........................
$1,500 plus 3 percent of the excess over $200,000......................
$4,500 plus 4 percent of the excess over $300,000......................
$12,500 plus 5 percent of the excess over $500,000.....................
$22,500 plus 6 percent of the excess over $700,000.....................
$34,500 plus 7 percent of the excess over $900,000.....................
$48,500 plus 8 percent of the excess over $1,100,000...................
$88,500 plus 9 percent of the excess over $1,600,000...................
$133,500 plus 10 percent of the excess over $2,100,000.................
$183,500 plus 11 percent of the excess over $2,600,000.................
$238,500 plus 12 percent of the excess over $3,100,000.................
$298,500 plus 13 percent of the excess over $3,600,000.................
$363,500 plus 14 percent of the excess over $4,100,000.................
$503,500 plus 15 percent of the excess over $5,100,000.................
$653,500 plus 16 percent of the excess over $6,100,000.................
$813,500 plus 17 percent of the excess over $7,100,000.................
$983,500 plus 18 percent of the excess over $8,100,000.................
$1,163,500 plus 19 percent of the excess over $9,100,000...............
$1,353,500 plus 20 percent of the excess over $10,100,000..............
       ``(d) Determination of Unified Credit.--In the case of an 
     estate to which this section applies, subsection (a) shall 
     not apply in determining the credit under section 2010.''.
       (b) Conforming Amendments.--
       (1) Section 2011 is amended by striking subsection (d) and 
     by redesignating subsections (e), (f), and (g) as subsections 
     (d), (e), and (f), respectively.
       (2) Section 2053(d)(3)(B) is amended by striking ``section 
     2011(e)'' and inserting ``section 2011(d)''.
       (3) Paragraph (9) of section 532(c) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 is repealed.

[[Page 27526]]

       (c) Clerical Amendment.--The item relating to section 2201 
     in the table of sections for subchapter C of chapter 11 is 
     amended to read as follows:

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces 
              and deaths of victims of certain terrorist attacks.''.
       (d) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to estates of decedents--
       (A) dying on or after September 11, 2001, and
       (B) in the case of individuals dying as a result of the 
     April 19, 1995, terrorist attack, dying on or after April 19, 
     1995.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 303. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS 
                   EXEMPT PAYMENTS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) payments made by an organization described in section 
     501(c)(3) of such Code by reason of the death, injury, 
     wounding, or illness of an individual incurred as the result 
     of the terrorist attacks against the United States on 
     September 11, 2001, or a terrorist attack involving anthrax 
     occurring on or after September 11, 2001, and before January 
     1, 2002, shall be treated as related to the purpose or 
     function constituting the basis for such organization's 
     exemption under section 501 of such Code if such payments are 
     made using an objective formula which is consistently 
     applied, and
       (2) in the case of a private foundation (as defined in 
     section 509 of such Code), any payment described in paragraph 
     (1) shall not be treated as made to a disqualified person for 
     purposes of section 4941 of such Code.
       (b) Effective Date.--This section shall apply to payments 
     made on or after September 11, 2001.

     SEC. 304. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) gross income shall not include any amount which (but 
     for this section) would be includible in gross income by 
     reason of the discharge (in whole or in part) of indebtedness 
     of any taxpayer if the discharge is by reason of the death of 
     an individual incurred as the result of the terrorist attacks 
     against the United States on September 11, 2001, or a 
     terrorist attack involving anthrax occurring on or after 
     September 11, 2001, and before January 1, 2002, and
       (2) return requirements under section 6050P of such Code 
     shall not apply to any discharge described in paragraph (1).
       (b) Effective Date.--This section shall apply to discharges 
     made on or after September 11, 2001, and before January 1, 
     2002.

     SEC. 305. TREATMENT OF CERTAIN STRUCTURED SETTLEMENT PAYMENTS 
                   AND DISABILITY TRUSTS.

       (a) Imposition of Excise Tax on Persons Who Acquire Certain 
     Structured Settlement Payments in Factoring Transactions.--
       (1) In general.--Subtitle E is amended by adding at the end 
     the following new chapter:

       ``CHAPTER 55--STRUCTURED SETTLEMENT FACTORING TRANSACTIONS

``Sec. 5891. Structured settlement factoring transactions for certain 
              victims of terrorism.

     ``SEC. 5891. STRUCTURED SETTLEMENT FACTORING TRANSACTIONS FOR 
                   CERTAIN VICTIMS OF TERRORISM.

       ``(a) Imposition of Tax.--There is hereby imposed on any 
     person who acquires directly or indirectly structured 
     settlement payment rights in a structured settlement 
     factoring transaction a tax equal to 40 percent of the 
     factoring discount as determined under subsection (c)(4) with 
     respect to such factoring transaction.
       ``(b) Exception for Certain Approved Transactions.--
       ``(1) In general.--The tax under subsection (a) shall not 
     apply in the case of a structured settlement factoring 
     transaction in which the transfer of structured settlement 
     payment rights is approved in advance in a qualified order.
       ``(2) Qualified order.--For purposes of this section, the 
     term `qualified order' means a final order, judgment, or 
     decree which--
       ``(A) finds that the transfer described in paragraph (1)--
       ``(i) does not contravene any Federal or State statute or 
     the order of any court or responsible administrative 
     authority, and
       ``(ii) is in the best interest of the payee, taking into 
     account the welfare and support of the payee's dependents, 
     and
       ``(B) is issued--
       ``(i) under the authority of an applicable State statute by 
     an applicable State court, or
       ``(ii) by the responsible administrative authority (if any) 
     which has exclusive jurisdiction over the underlying action 
     or proceeding which was resolved by means of the structured 
     settlement.
       ``(3) Applicable state statute.--For purposes of this 
     section, the term `applicable State statute' means a statute 
     providing for the entry of an order, judgment, or decree 
     described in paragraph (2)(A) which is enacted by--
       ``(A) the State in which the payee of the structured 
     settlement is domiciled, or
       ``(B) if there is no statute described in subparagraph (A), 
     the State in which either the party to the structured 
     settlement (including an assignee under a qualified 
     assignment under section 130) or the person issuing the 
     funding asset for the structured settlement is domiciled or 
     has its principal place of business.
       ``(4) Applicable state court.--For purposes of this 
     section--
       ``(A) In general.--The term `applicable State court' means, 
     with respect to any applicable State statute, a court of the 
     State which enacted such statute.
       ``(B) Special rule.--In the case of an applicable State 
     statute described in paragraph (3)(B), such term also 
     includes a court of the State in which the payee of the 
     structured settlement is domiciled.
       ``(5) Qualified order dispositive.--A qualified order shall 
     be treated as dispositive for purposes of the exception under 
     this subsection.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Structured settlement.--The term `structured 
     settlement' means an arrangement--
       ``(A) which is established by--
       ``(i) suit or agreement for the periodic payment of damages 
     excludable from the gross income of the recipient under 
     section 104(a)(2), or
       ``(ii) agreement for the periodic payment of compensation 
     under any workers' compensation law excludable from the gross 
     income of the recipient under section 104(a)(1), and
       ``(B) under which the periodic payments are--
       ``(i) of the character described in subparagraphs (A) and 
     (B) of section 130(c)(2), and
       ``(ii) payable by a person who is a party to the suit or 
     agreement or to the workers' compensation claim or by a 
     person who has assumed the liability for such periodic 
     payments under a qualified assignment in accordance with 
     section 130.
       ``(2) Structured settlement payment rights.--The term 
     `structured settlement payment rights' means rights to 
     receive payments under a structured settlement relating to 
     claims for death, wounding, injury, or illness as a result of 
     the terrorist attacks against the United States on September 
     11, 2001, or a terrorist attack involving anthrax occurring 
     on or after September 11, 2001, and before January 1, 2002.
       ``(3) Structured settlement factoring transaction.--
       ``(A) In general.--The term `structured settlement 
     factoring transaction' means a transfer of structured 
     settlement payment rights (including portions of structured 
     settlement payments) made for consideration by means of sale, 
     assignment, pledge, or other form of encumbrance or 
     alienation for consideration.
       ``(B) Exception.--Such term shall not include--
       ``(i) the creation or perfection of a security interest in 
     structured settlement payment rights under a blanket security 
     agreement entered into with an insured depository institution 
     in the absence of any action to redirect the structured 
     settlement payments to such institution (or agent or 
     successor thereof) or otherwise to enforce such blanket 
     security interest as against the structured settlement 
     payment rights, or
       ``(ii) a subsequent transfer of structured settlement 
     payment rights acquired in a structured settlement factoring 
     transaction.
       ``(4) Factoring discount.--The term `factoring discount' 
     means an amount equal to the excess of--
       ``(A) the aggregate undiscounted amount of structured 
     settlement payments being acquired in the structured 
     settlement factoring transaction, over
       ``(B) the total amount actually paid by the acquirer to the 
     person from whom such structured settlement payments are 
     acquired.
       ``(5) Responsible administrative authority.--The term 
     `responsible administrative authority' means the 
     administrative authority which had jurisdiction over the 
     underlying action or proceeding which was resolved by means 
     of the structured settlement.
       ``(6) State.--The term `State' includes the Commonwealth of 
     Puerto Rico and any possession of the United States.
       ``(d) Coordination With Other Provisions.--
       ``(1) In general.--If the applicable requirements of 
     sections 72, 104(a)(1), 104(a)(2), 130, and 461(h) were 
     satisfied at the time the structured settlement involving 
     structured settlement payment rights was entered into, the 
     subsequent occurrence of a structured settlement factoring 
     transaction shall not affect the application of the 
     provisions of such sections to the parties to the structured 
     settlement (including an assignee under a qualified 
     assignment under section 130) in any taxable year.

[[Page 27527]]

       ``(2) No withholding of tax.--The provisions of section 
     3405 regarding withholding of tax shall not apply to the 
     person making the payments in the event of a structured 
     settlement factoring transaction.
       ``(3) No inference.--No inference shall be drawn from the 
     application of this subsection to only those payment rights 
     described in subsection (c)(2).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     E is amended by adding at the end the following new item:

``Chapter 55. Structured settlement factoring transactions.''.
       (3) Effective dates.--
       (A) In general.--The amendments made by this subsection 
     (other than the provisions of section 5891(d) of the Internal 
     Revenue Code of 1986, as added by this subsection) shall 
     apply to structured settlement factoring transactions (as 
     defined in section 5891(c) of such Code (as so added)) 
     entered into on or after the 30th day following the date of 
     the enactment of this Act.
       (B) Clarification of existing law.--Section 5891(d) of such 
     Code (as so added) shall apply to structured settlement 
     factoring transactions (as defined in section 5891(c) of such 
     Code (as so added)) entered into on or after such 30th day.
       (C) Transition rule.--In the case of a structured 
     settlement factoring transaction entered into during the 
     period beginning on the 30th day following the date of the 
     enactment of this Act and ending on July 1, 2002, no tax 
     shall be imposed under section 5891(a) of such Code if--
       (i) the structured settlement payee is domiciled in a State 
     (or possession of the United States) which has not enacted a 
     statute providing that the structured settlement factoring 
     transaction is ineffective unless the transaction has been 
     approved by an order, judgment, or decree of a court (or 
     where applicable, a responsible administrative authority) 
     which finds that such transaction--

       (I) does not contravene any Federal or State statute or the 
     order of any court (or responsible administrative authority), 
     and
       (II) is in the best interest of the structured settlement 
     payee or is appropriate in light of a hardship faced by the 
     payee, and

       (ii) the person acquiring the structured settlement payment 
     rights discloses to the structured settlement payee in 
     advance of the structured settlement factoring transaction 
     the amounts and due dates of the payments to be transferred, 
     the aggregate amount to be transferred, the consideration to 
     be received by the structured settlement payee for the 
     transferred payments, the discounted present value of the 
     transferred payments (including the present value as 
     determined in the manner described in section 7520 of such 
     Code), and the expenses required under the terms of the 
     structured settlement factoring transaction to be paid by the 
     structured settlement payee or deducted from the proceeds of 
     such transaction.
       (b) Personal Exemption Deduction for Certain Disability 
     Trusts.--
       (1) In general.--Section 642(b) (relating to deduction for 
     personal exemption) is amended--
       (A) by striking ``An estate'' and inserting:
       ``(1) In general.--An estate'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Full personal exemption amount for certain disability 
     trusts.--Paragraph (1) shall not apply, and the deduction 
     under section 151 shall apply, to any disability trust 
     described in subsection (c)(2)(B)(iv), (d)(4)(A), or 
     (d)(4)(C) of section 1917 of the Social Security Act (42 
     U.S.C. 1396p) for a beneficiary disabled as the result of a 
     wounding, injury, or illness as a result of the terrorist 
     attacks against the United States on April 19, 1995, or 
     September 11, 2001, or a terrorist attack involving anthrax 
     occurring on or after September 11, 2001, and before January 
     1, 2002.''.
       (2) Effective date; waiver of limitations.--
       (A) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (B) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     subsection is prevented at any time before the close of the 
     1-year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 306. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

       (a) In General.--Nothing in this title (or an amendment 
     made by this title) 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.

Subtitle B--General Relief for Victims of Disasters and Terroristic or 
                            Military Actions

     SEC. 311. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 139 as section 140 and 
     inserting after section 138 the following new section:

     ``SEC. 139. DISASTER RELIEF PAYMENTS.

       ``(a) General Rule.--Gross income shall not include--
       ``(1) any amount received as payment under section 406 of 
     the Air Transportation Safety and System Stabilization Act, 
     or
       ``(2) any amount received by an individual as a qualified 
     disaster relief payment.
       ``(b) Qualified Disaster Relief Payment Defined.--For 
     purposes of this section, the term `qualified disaster relief 
     payment' means any amount paid to or for the benefit of an 
     individual--
       ``(1) to reimburse or pay reasonable and necessary 
     personal, family, living, or funeral expenses incurred as a 
     result of a qualified disaster,
       ``(2) to reimburse or pay reasonable and necessary expenses 
     incurred for the repair or rehabilitation of a personal 
     residence or repair or replacement of its contents to the 
     extent that the need for such repair, rehabilitation, or 
     replacement is attributable to a qualified disaster,
       ``(3) by a person engaged in the furnishing or sale of 
     transportation as a common carrier by reason of the death or 
     personal physical injuries incurred as a result of a 
     qualified disaster, or
       ``(4) if such amount is paid by a Federal, State, or local 
     government, or agency or instrumentality thereof, in 
     connection with a qualified disaster in order to promote the 
     general welfare,
     but only to the extent any expense compensated by such 
     payment is not otherwise compensated for by insurance or 
     otherwise.
       ``(c) Qualified Disaster Defined.--For purposes of this 
     section, the term `qualified disaster' means--
       ``(1) a disaster which results from a terroristic or 
     military action (as defined in section 692(c)(2)),
       ``(2) a Presidentially declared disaster (as defined in 
     section 1033(h)(3)),
       ``(3) a disaster which results from an accident involving a 
     common carrier, or from any other event, which is determined 
     by the Secretary to be of a catastrophic nature, or
       ``(4) with respect to amounts described in subsection 
     (b)(4), a disaster which is determined by an applicable 
     Federal, State, or local authority (as determined by the 
     Secretary) to warrant assistance from the Federal, State, or 
     local government or agency or instrumentality thereof.
       ``(d) Coordination With Employment Taxes.--For purposes of 
     chapter 2 and subtitle C, a qualified disaster relief payment 
     shall not be treated as net earnings from self-employment, 
     wages, or compensation subject to tax.
       ``(e) No Relief for Certain Individuals.--Subsection (a) 
     shall not apply with respect to any individual identified by 
     the Attorney General to have been a participant or 
     conspirator in a terroristic action (as so defined), or a 
     representative of such individual.''.
       (b) Conforming Amendments.--The table of sections for part 
     III of subchapter B of chapter 1 is amended by striking the 
     item relating to section 139 and inserting the following new 
     items:

``Sec. 139. Disaster relief payments.
``Sec. 140. Cross references to other Acts.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 312. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND 
                   REQUIRED ACTIONS.

       (a) Expansion of Authority Relating to Disasters and 
     Terroristic or Military Actions.--Section 7508A is amended to 
     read as follows:

     ``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY 
                   REASON OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``(a) In General.--In the case of a taxpayer determined by 
     the Secretary to be affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3)) or a terroristic 
     or military action (as defined in section 692(c)(2)), the 
     Secretary may specify a period of up to one year that may be 
     disregarded in determining, under the internal revenue laws, 
     in respect of any tax liability of such taxpayer--
       ``(1) whether any of the acts described in paragraph (1) of 
     section 7508(a) were performed within the time prescribed 
     therefor (determined without regard to extension under any 
     other provision of this subtitle for periods after the date 
     (determined by the Secretary) of such disaster or action),

[[Page 27528]]

       ``(2) the amount of any interest, penalty, additional 
     amount, or addition to the tax for periods after such date, 
     and
       ``(3) the amount of any credit or refund.
       ``(b) Special Rules Regarding Pensions, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a disaster or action 
     described in subsection (a), the Secretary may specify a 
     period of up to one year which may be disregarded in 
     determining the date by which any action is required or 
     permitted to be completed under this title. No plan shall be 
     treated as failing to be operated in accordance with the 
     terms of the plan solely as the result of disregarding any 
     period by reason of the preceding sentence.
       ``(c) Special Rules for Overpayments.--The rules of section 
     7508(b) shall apply for purposes of this section.''.
       (b) Clarification of Scope of Acts Secretary May 
     Postpone.--Section 7508(a)(1)(K) (relating to time to be 
     disregarded) is amended by striking ``in regulations 
     prescribed under this section''.
       (c) Conforming Amendments to ERISA.--
       (1) Part 5 of subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1131 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON 
                   OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``In the case of a pension or other employee benefit plan, 
     or any sponsor, administrator, participant, beneficiary, or 
     other person with respect to such plan, affected by a 
     Presidentially declared disaster (as defined in section 
     1033(h)(3) of the Internal Revenue Code of 1986) or a 
     terroristic or military action (as defined in section 
     692(c)(2) of such Code), the Secretary may, notwithstanding 
     any other provision of law, prescribe, by notice or 
     otherwise, a period of up to one year which may be 
     disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (2) Section 4002 of Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1302) is amended by adding at the end the 
     following new subsection:
       ``(i) Special Rules Regarding Disasters, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3) of the Internal 
     Revenue Code of 1986) or a terroristic or military action (as 
     defined in section 692(c)(2) of such Code), the corporation 
     may, notwithstanding any other provision of law, prescribe, 
     by notice or otherwise, a period of up to one year which may 
     be disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (d) Additional Conforming Amendments.--
       (1) Section 6404 is amended--
       (A) by striking subsection (h),
       (B) by redesignating subsection (i) as subsection (h), and
       (C) by adding at the end the following new subsection:
       ``(i) Cross Reference.--

  ``For authority of the Secretary to abate certain amounts by reason 
of Presidentially declared disaster or terroristic or military action, 
see section 7508A.''.
       (2) Section 6081(c) is amended to read as follows:
       ``(c) Cross References.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.
       (3) Section 6161(d) is amended by adding at the end the 
     following new paragraph:
       ``(3) Postponement of certain acts.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.
       (d) Clerical Amendments.--
       (1) The item relating to section 7508A in the table of 
     sections for chapter 77 is amended to read as follows:

``Sec. 7508A. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.
       (2) The table of contents for the Employee Retirement 
     Income Security Act of 1974 is amended by inserting after the 
     item relating to section 517 the following new item:

``Sec. 518. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to disasters and terroristic or military actions 
     occurring on or after September 11, 2001, with respect to any 
     action of the Secretary of the Treasury, the Secretary of 
     Labor, or the Pension Benefit Guaranty Corporation occurring 
     on or after the date of the enactment of this Act.

     SEC. 313. INTERNAL REVENUE SERVICE DISASTER RESPONSE TEAM.

       (a) In General.--Section 7508A, as amended by section 
     202(a), is amended by adding at the end the following new 
     subsection:
       ``(d) Duties of Disaster Response Team.--The Secretary 
     shall establish as a permanent office in the national office 
     of the Internal Revenue Service a disaster response team 
     which, in coordination with the Federal Emergency Management 
     Agency, shall assist taxpayers in clarifying and resolving 
     Federal tax matters associated with or resulting from any 
     Presidentially declared disaster (as defined in section 
     1033(h)(3)) or a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 314. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR 
                   MILITARY ACTIONS.

       (a) Exclusion for Death Benefits.--Section 101 (relating to 
     certain death benefits) is amended by adding at the end the 
     following new subsection:
       ``(i) Certain Employee Death Benefits Payable by Reason of 
     Death From Terroristic or Military Actions.--
       ``(1) In general.--Gross income does not include amounts 
     which are received (whether in a single sum or otherwise) if 
     such amounts are paid by an employer by reason of the death 
     of an employee incurred as a result of a terroristic or 
     military action (as defined in section 692(c)(2)).
       ``(2) No relief for certain individuals.--Paragraph (1) 
     shall not apply with respect to any individual identified by 
     the Attorney General to have been a participant or 
     conspirator in a terroristic action (as so defined), or a 
     representative of such individual.
       ``(3) Treatment of self-employed individuals.--For purposes 
     of this subsection, the term `employee' includes a self-
     employed person (as described in section 401(c)(1)).''.
       (b) Disability Income.--Section 104(a)(5) (relating to 
     compensation for injuries or sickness) is amended by striking 
     ``a violent attack'' and all that follows through the period 
     and inserting ``a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (c) Exemption From Income Tax for Certain Military or 
     Civilian Employees.--Section 692(c) is amended--
       (1) by striking ``outside the United States'' in paragraph 
     (1), and
       (2) by striking ``Sustained Overseas'' in the heading.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 315. CLARIFICATION OF DUE DATE FOR AIRLINE EXCISE TAX 
                   DEPOSITS.

       (a) In General.--Paragraph (3) of section 301(a) of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42) is amended to read as follows:
       ``(3) Airline-related deposit.--For purposes of this 
     subsection, the term `airline-related deposit' means any 
     deposit of taxes imposed by subchapter C of chapter 33 of 
     such Code (relating to transportation by air).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 301 of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42).

     SEC. 316. COORDINATION WITH AIR TRANSPORTATION SAFETY AND 
                   SYSTEM STABILIZATION ACT.

       No reduction in Federal tax liability by reason of any 
     provision of, or amendment made by, this Act shall be 
     considered as being received from a collateral source for 
     purposes of section 402(4) of the Air Transportation Safety 
     and System Stabilization Act (Public Law 107-42).

  Subtitle C--Disclosure of Tax Information in Terrorism and National 
                        Security Investigations

     SEC. 321. DISCLOSURE OF TAX INFORMATION IN TERRORISM AND 
                   NATIONAL SECURITY INVESTIGATIONS.

       (a) Disclosure Without a Request of Information Relating to 
     Terrorist Activities, Etc.--Paragraph (3) of section 6103(i) 
     (relating to disclosure of return information to apprise 
     appropriate officials of criminal activities or emergency 
     circumstances) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Terrorist activities, etc.--
       ``(i) In general.--Except as provided in paragraph (6), the 
     Secretary may disclose in writing return information (other 
     than taxpayer return information) that may be related to a 
     terrorist incident, threat, or activity to the extent 
     necessary to apprise the head of the appropriate Federal law 
     enforcement agency responsible for investigating or 
     responding to such terrorist incident, threat, or activity. 
     The head of the agency may disclose such return information 
     to officers and employees of such agency to the extent 
     necessary to investigate or respond to such terrorist 
     incident, threat, or activity.

[[Page 27529]]

       ``(ii) Disclosure to the department of justice.--Returns 
     and taxpayer return information may also be disclosed to the 
     Attorney General under clause (i) to the extent necessary 
     for, and solely for use in preparing, an application under 
     paragraph (7)(D).
       ``(iii) Taxpayer identity.--For purposes of this 
     subparagraph, a taxpayer's identity shall not be treated as 
     taxpayer return information.
       ``(iv) Termination.--No disclosure may be made under this 
     subparagraph after December 31, 2003.''.
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities, Etc.--Subsection (i) of section 6103 
     (relating to disclosure to Federal officers or employees for 
     administration of Federal laws not relating to tax 
     administration) is amended by redesignating paragraph (7) as 
     paragraph (8) and by inserting after paragraph (6) the 
     following new paragraph:
       ``(7) Disclosure upon request of information relating to 
     terrorist activities, etc.--
       ``(A) Disclosure to law enforcement agencies.--
       ``(i) In general.--Except as provided in paragraph (6), 
     upon receipt by the Secretary of a written request which 
     meets the requirements of clause (iii), the Secretary may 
     disclose return information (other than taxpayer return 
     information) to officers and employees of any Federal law 
     enforcement agency who are personally and directly engaged in 
     the response to or investigation of any terrorist incident, 
     threat, or activity.
       ``(ii) Disclosure to state and local law enforcement 
     agencies.--The head of any Federal law enforcement agency may 
     disclose return information obtained under clause (i) to 
     officers and employees of any State or local law enforcement 
     agency but only if such agency is part of a team with the 
     Federal law enforcement agency in such response or 
     investigation and such information is disclosed only to 
     officers and employees who are personally and directly 
     engaged in such response or investigation.
       ``(iii) Requirements.--A request meets the requirements of 
     this clause if--

       ``(I) the request is made by the head of any Federal law 
     enforcement agency (or his delegate) involved in the response 
     to or investigation of any terrorist incident, threat, or 
     activity, and
       ``(II) the request sets forth the specific reason or 
     reasons why such disclosure may be relevant to a terrorist 
     incident, threat, or activity.

       ``(iv) Limitation on use of information.--Information 
     disclosed under this subparagraph shall be solely for the use 
     of the officers and employees to whom such information is 
     disclosed in such response or investigation.
       ``(B) Disclosure to intelligence agencies.--
       ``(i) In general.--Except as provided in paragraph (6), 
     upon receipt by the Secretary of a written request which 
     meets the requirements of clause (ii), the Secretary may 
     disclose return information (other than taxpayer return 
     information) to those officers and employees of the 
     Department of Justice, the Department of the Treasury, and 
     other Federal intelligence agencies who are personally and 
     directly engaged in the collection or analysis of 
     intelligence and counterintelligence information or 
     investigation concerning any terrorist incident, threat, or 
     activity. For purposes of the preceding sentence, the 
     information disclosed under the preceding sentence shall be 
     solely for the use of such officers and employees in such 
     investigation, collection, or analysis.
       ``(ii) Requirements.--A request meets the requirements of 
     this subparagraph if the request--

       ``(I) is made by an individual described in clause (iii), 
     and
       ``(II) sets forth the specific reason or reasons why such 
     disclosure may be relevant to a terrorist incident, threat, 
     or activity.

       ``(iii) Requesting individuals.--An individual described in 
     this subparagraph is an individual--

       ``(I) who is an officer or employee of the Department of 
     Justice or the Department of the Treasury who is appointed by 
     the President with the advice and consent of the Senate or 
     who is the Director of the United States Secret Service, and
       ``(II) who is responsible for the collection and analysis 
     of intelligence and counterintelligence information 
     concerning any terrorist incident, threat, or activity.

       ``(iv) Taxpayer identity.--For purposes of this 
     subparagraph, a taxpayer's identity shall not be treated as 
     taxpayer return information.
       ``(C) Disclosure under ex parte orders.--
       ``(i) In general.--Except as provided in paragraph (6), any 
     return or return information with respect to any specified 
     taxable period or periods shall, pursuant to and upon the 
     grant of an ex parte order by a Federal district court judge 
     or magistrate under clause (ii), be open (but only to the 
     extent necessary as provided in such order) to inspection by, 
     or disclosure to, officers and employees of any Federal law 
     enforcement agency or Federal intelligence agency who are 
     personally and directly engaged in any investigation, 
     response to, or analysis of intelligence and 
     counterintelligence information concerning any terrorist 
     incident, threat, or activity. Return or return information 
     opened pursuant to the preceding sentence shall be solely for 
     the use of such officers and employees in the investigation, 
     response, or analysis, and in any judicial, administrative, 
     or grand jury proceedings, pertaining to such terrorist 
     incident, threat, or activity.
       ``(ii) Application for order.--The Attorney General, the 
     Deputy Attorney General, the Associate Attorney General, any 
     Assistant Attorney General, or any United States attorney may 
     authorize an application to a Federal district court judge or 
     magistrate for the order referred to in clause (i). Upon such 
     application, such judge or magistrate may grant such order if 
     he determines on the basis of the facts submitted by the 
     applicant that--

       ``(I) there is reasonable cause to believe, based upon 
     information believed to be reliable, that the return or 
     return information may be relevant to a matter relating to 
     such terrorist incident, threat, or activity, and
       ``(II) the return or return information is sought 
     exclusively for use in a Federal investigation, analysis, or 
     proceeding concerning any terrorist incident, threat, or 
     activity.

       ``(D) Special rule for ex parte disclosure by the irs.--
       ``(i) In general.--Except as provided in paragraph (6), the 
     Secretary may authorize an application to a Federal district 
     court judge or magistrate for the order referred to in 
     subparagraph (C)(i). Upon such application, such judge or 
     magistrate may grant such order if he determines on the basis 
     of the facts submitted by the applicant that the requirements 
     of subparagraph (C)(ii)(I) are met.
       ``(ii) Limitation on use of information.--Information 
     disclosed under clause (i)--

       ``(I) may be disclosed only to the extent necessary to 
     apprise the head of the appropriate Federal law enforcement 
     agency responsible for investigating or responding to a 
     terrorist incident, threat, or activity, and
       ``(II) shall be solely for use in a Federal investigation, 
     analysis, or proceeding concerning any terrorist incident, 
     threat, or activity.

     The head of such Federal agency may disclose such information 
     to officers and employees of such agency to the extent 
     necessary to investigate or respond to such terrorist 
     incident, threat, or activity.
       ``(E) Termination.--No disclosure may be made under this 
     paragraph after December 31, 2003.''.
       (c) Conforming Amendments.--
       (1) Section 6103(a)(2) is amended by inserting ``any local 
     law enforcement agency receiving information under subsection 
     (i)(7)(A),'' after ``State,''.
       (2) Section 6103(b) is amended by adding at the end the 
     following new paragraph:
       ``(11) Terrorist incident, threat, or activity.--The term 
     `terrorist incident, threat, or activity' means an incident, 
     threat, or activity involving an act of domestic terrorism 
     (as defined in section 2331(5) of title 18, United States 
     Code) or international terrorism (as defined in section 
     2331(1) of such title).''.
       (3) The heading of section 6103(i)(3) is amended by 
     inserting ``or terrorist'' after ``criminal''.
       (4) Paragraph (4) of section 6103(i) is amended--
       (A) in subparagraph (A) by inserting ``or (7)(C)'' after 
     ``paragraph (1)'', and
       (B) in subparagraph (B) by striking ``or (3)(A)'' and 
     inserting ``(3)(A) or (C), or (7)''.
       (5) Paragraph (6) of section 6103(i) is amended--
       (A) by striking ``(3)(A)'' and inserting ``(3)(A) or (C)'', 
     and
       (B) by striking ``or (7)'' and inserting ``(7), or (8)''.
       (6) Section 6103(p)(3) is amended--
       (A) in subparagraph (A) by striking ``(7)(A)(ii)'' and 
     inserting ``(8)(A)(ii)'', and
       (B) in subparagraph (C) by striking ``(i)(3)(B)(i)'' and 
     inserting ``(i)(3)(B)(i) or (7)(A)(ii)''.
       (7) Section 6103(p)(4) is amended--
       (A) in the matter preceding subparagraph (A)--
       (i) by striking ``or (5),'' the first place it appears and 
     inserting ``(5), or (7),'', and
       (ii) by striking ``(i)(3)(B)(i),'' and inserting 
     ``(i)(3)(B)(i) or (7)(A)(ii),'', and
       (B) in subparagraph (F)(ii) by striking ``or (5),'' the 
     first place it appears and inserting ``(5) or (7),''.
       (8) Section 6103(p)(6)(B)(i) is amended by striking 
     ``(i)(7)(A)(ii)'' and inserting ``(i)(8)(A)(ii)''.
       (9) Section 6105(b) is amended--
       (A) by striking ``or'' at the end of paragraph (2),
       (B) by striking ``paragraphs (1) or (2)'' in paragraph (3) 
     and inserting ``paragraph (1), (2), or (3)'',
       (C) by redesignating paragraph (3) as paragraph (4), and
       (D) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) to the disclosure of tax convention information on 
     the same terms as return information may be disclosed under 
     paragraph (3)(C) or (7) of section 6103(i), except that in 
     the case of tax convention information provided by a foreign 
     government, no disclosure

[[Page 27530]]

     may be made under this paragraph without the written consent 
     of the foreign government, or''.
       (10) Section 7213(a)(2) is amended by striking 
     ``(i)(3)(B)(i),'' and inserting ``(i)(3)(B)(i) or 
     (7)(A)(ii),''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to disclosures made on or after the date of the 
     enactment of this Act.

               TITLE IV--NEW YORK RECOVERY FROM TERRORISM

     SEC. 401. EXPANSION OF WORK OPPORTUNITY TAX CREDIT TARGETED 
                   CATEGORIES TO INCLUDE CERTAIN EMPLOYEES IN NEW 
                   YORK CITY.

       (a) In General.--For purposes of section 51 of the Internal 
     Revenue Code of 1986 (relating to work opportunity credit), a 
     New York Recovery Zone business employee shall be treated as 
     a member of a targeted group.
       (b) New York Recovery Zone Business Employee.--For purposes 
     of this section--
       (1) In general.--The term ``New York Recovery Zone business 
     employee'' means, with respect to the period beginning after 
     September 10, 2001, and ending before January 1, 2005, any 
     employee of a New York Recovery Zone business if--
       (A) substantially all the services performed during such 
     period by such employee for such business are performed in a 
     trade or business of such business located in an area 
     described in paragraph (2), and
       (B) with respect to any employee of such business described 
     in paragraph (2)(B), such employee is certified by the New 
     York State Department of Labor as not exceeding, when added 
     to all other employees previously certified with respect to 
     such period as New York Recovery Zone business employees with 
     respect to such business, the number of employees of such 
     business on September 11, 2001, in the New York Recovery 
     Zone.
       (2) New york recovery zone business.--The term ``New York 
     Recovery Zone business'' means any business establishment 
     which is--
       (A) located in the New York Recovery Zone, or
       (B) located in the City of New York, New York, outside the 
     New York Recovery Zone, as the result of the destruction or 
     damage of such establishment by the September 11, 2001, 
     terrorist attack.
       (3) New york recovery zone.--The term ``New York Recovery 
     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.
       (4) Special rules for determining amount of credit.--For 
     purposes of applying subpart E of part IV of subchapter B of 
     chapter 1 of the Internal Revenue Code of 1986 to wages paid 
     or incurred to any New York Recovery Zone business employee--
       (A) section 51(a) of such Code shall be applied by 
     substituting ``qualified wages'' for ``qualified first-year 
     wages'',
       (B) section 51(d)(12)(A)(i) of such Code shall be applied 
     to the certification of individuals employed by a New York 
     Recovery Zone business before April 1, 2002, by substituting 
     ``on or before May 1, 2002'' for ``on or before the day on 
     which such individual begins work for the employer'',
       (C) subsections (c)(4) and (i)(2) of section 51 of such 
     Code shall not apply, and
       (D) in determining qualified wages, the following shall 
     apply in lieu of section 51(b) of such Code:
       (i) Qualified wages.--The term ``qualified wages'' means 
     the wages paid or incurred by the employer for work performed 
     during the period beginning on September 11, 2001, and ending 
     on December 31, 2004, to individuals who are New York 
     Recovery Zone business employees of such employer.
       (ii) Only first $6,000 of wages per taxable year taken into 
     account.--The amount of the qualified wages which may be 
     taken into account with respect to any individual shall not 
     exceed $6,000 per taxable year of the employer.
       (c) 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 recovery zone business 
     employee credit.--
       ``(A) In general.--In the case of the New York Recovery 
     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 
     Recovery Zone business employee credit).

       ``(B) New york recovery zone business employee credit.--For 
     purposes of this subsection, the term `New York Recovery Zone 
     business employee credit' means the portion of work 
     opportunity credit under section 51 determined under section 
     401 of the Fiscal Stimulus and Worker Relief Act of 2001.''.
       (2) Conforming amendment.--Subclause (II) of section 
     38(c)(2)(A)(ii) is amended by inserting ``or the New York 
     Recovery Zone business employee credit'' after ``employment 
     credit''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending after September 11, 2001.

     SEC. 402. TAX-EXEMPT PRIVATE ACTIVITY BONDS FOR REBUILDING 
                   PORTION OF NEW YORK CITY DAMAGED IN THE 
                   SEPTEMBER 11, 2001, TERRORIST ATTACK.

       (a) Treatment as Qualified Bonds.--For purposes of the 
     Internal Revenue Code of 1986, any qualified NYC recovery 
     bond shall be treated as an exempt facility bond under 
     section 141(e) of such Code.
       (b) Qualified NYC Recovery Bond.--For purposes of this 
     section, the term ``qualified NYC recovery bond'' means any 
     bond which--
       (1) is issued by the State of New York or any political 
     subdivision thereof (or any agency, instrumentality or 
     constituted authority on behalf thereof), and
       (2) meets the requirements of subsections (c) through (f).
       (c) Designation Requirements.--A bond meets the 
     requirements of this subsection if it is issued as part of an 
     issue designated as a qualified NYC recovery bond by the 
     Mayor of the City of New York, New York, or an individual 
     specifically appointed to make such designation.
       (d) Issuance and Volume Requirements.--
       (1) In general.--Except as provided in paragraph (3), a 
     bond issued as part of an issue meets the requirements of 
     this subsection if such bond is issued during 2002 (or during 
     the period elected under paragraph (2)) and the aggregate 
     face amount of the bonds issued pursuant to such issue, when 
     added to the aggregate face amount of qualified NYC recovery 
     bonds previously issued, does not exceed $12,500,000,000.
       (2) Elective carryforward of unused limitation.--If the 
     volume cap under paragraph (1) exceeds the aggregate amount 
     of qualified NYC recovery bonds issued during 2002, the 
     issuing authority under subsection (b) may elect to carry 
     forward such excess volume cap for an additional 3-year 
     period under rules similar to the rules of section 146(f) of 
     the Internal Revenue Code of 1986 (other than paragraph (2) 
     thereof).
       (3) Certain current refundings not counted.--For purposes 
     of paragraph (1), there shall not be taken into account any 
     current refunding bond the proceeds of which are used to 
     refund any bond described in paragraph (1) to the extent the 
     face amount of such current refunding bond does not exceed 
     the outstanding face amount of the refunded bond.
       (e) Qualified Project Requirements.--
       (1) In general.--A bond meets the requirements of this 
     subsection if it is issued as part of an issue at least 95 
     percent of the net proceeds of which are to be used for 
     qualified project costs.
       (2) Qualified project costs.--For purposes of this 
     subsection--
       (A) In general.--The term ``qualified project costs'' 
     means--
       (i) with respect to a qualified project described in 
     paragraph (3)(A)(i), the costs of acquisition, construction, 
     reconstruction, and renovation of commercial real property 
     and residential rental real property, including--

       (I) buildings and their structural components,
       (II) fixed tenant improvements, and
       (III) public utility property, and

       (ii) with respect to a qualified project described in 
     paragraph (3)(A)(ii), the costs of acquisition, construction, 
     reconstruction, and renovation of commercial real property, 
     including--

       (I) buildings and their structural components, and
       (II) fixed tenant improvements.

       (B) Limitations.--
       (i) Residential rental real property.--Such term shall not 
     include costs with respect to residential rental real 
     property to the extent such costs for all such property 
     exceed 20 percent of the aggregate face amount of the bonds 
     issued under this section.
       (ii) Retail sales property.--Such term shall not include 
     costs with respect to property used for retail sales of 
     tangible property and functionally related and subordinate 
     property to the extent such costs for all such property 
     exceeds 10 percent of the aggregate face amount of the bonds 
     issued under this section.
       (iii) Movable fixtures and equipment.--Such term shall not 
     include costs with respect to movable fixtures and equipment.
       (3) Qualified projects.--For purposes of this subsection--
       (A) In general.--The term ``qualified project'' means any 
     project--
       (i) located within the New York Recovery Zone, or
       (ii) located within the City of New York, New York, but 
     outside of the New York Recovery Zone, but only if--

       (I) such project consists of at least 100,000 square feet 
     of usable office or other commercial space located in a 
     single building or multiple adjacent buildings, and
       (II) the aggregate face amount of the bonds issued to 
     finance such project, when added to

[[Page 27531]]

     the aggregate face amount of all bonds issued to finance all 
     other projects described in this clause, does not exceed 
     $7,000,000,000.

       (B) New york recovery zone.--The term ``New York Recovery 
     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.
       (f) General Requirements.--A bond meets the requirements of 
     this subsection if it is issued as part of an issue which 
     meets the requirements of part IV of subchapter B of chapter 
     1 of the Internal Revenue Code of 1986 applicable to an 
     exempt facility bond, except as follows:
       (1) Sections 142(d) and 150(b)(2) (relating to qualified 
     residential rental project), and section 146 (relating to 
     volume cap) of such Code shall not apply to bonds issued 
     under this section.
       (2) The application of section 147(c) of such Code 
     (relating to limitation on use for land acquisition) shall be 
     determined by reference to the aggregate authorized face 
     amount of all bonds issued under this section rather than the 
     net proceeds of each issue.
       (3) Section 147(d) of such Code (relating to acquisition of 
     existing property not permitted) shall be applied by 
     substituting ``50 percent'' for ``15 percent'' each place it 
     appears.
       (4) Section 148(f)(4)(C) of such Code (relating to 
     exception from rebate for certain proceeds to be used to 
     finance construction expenditures) shall apply to 
     construction proceeds of bonds issued under this section.
       (5) Rules similar to the rules of section 143(a)(2)(A)(iv) 
     of such Code (relating to use of loan repayments) shall apply 
     to bonds issued under this section.
       (g) Bond Interest not an AMT Preference Item.--For purposes 
     of section 57(a)(5) of the Internal Revenue Code of 1986, a 
     qualified NYC recovery bond shall not be treated as a 
     specified private activity bond.
       (h) Separate Issue Treatment of Portions of an Issue.--This 
     section shall not apply to the portion of the proceeds 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 subsection (a)), 
     if the issuer elects to so treat such portion.
       (i) Net Proceeds.--For purposes of this section, the term 
     ``net proceeds'' has the meaning given such term by section 
     150(a)(3) of the Internal Revenue Code of 1986.
       (j) Interest on Debt Used To Purchase or Carry Qualified 
     NYC Recovery Bonds.--
       (1) In general.--Clause (i) of section 265(b)(3)(B) 
     (defining qualified tax-exempt obligation) is amended by 
     adding at the end the following new flush sentence:
     ``Such term includes a tax-exempt obligation issued pursuant 
     to section 402 of the Fiscal Stimulus and Worker Relief Act 
     of 2001.''
       (2) Refundings.--Subparagraph (D) of section 265(b)(3) is 
     by adding at the end the following new clause:
       ``(iv) Refundings of certain obligations.--In the case of a 
     refunding (or a series of refundings) of a qualified tax-
     exempt obligation that is an obligation issued pursuant to 
     section 402 of the Fiscal Stimulus and Worker Relief Act of 
     2001, the refunding obligation shall be treated as a 
     qualified tax-exempt obligation if the refunding obligation 
     meets the requirements of such section.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending on or after the date of 
     the enactment of this Act.

     SEC. 403. ADDITIONAL ADVANCE REFUNDING PERMITTED OF CERTAIN 
                   BONDS.

       Paragraph (3) of section 149(d) of the Internal Revenue 
     Code of 1986 shall not apply to the first advance refunding 
     after the date of the enactment of this Act of any issue if--
       (1) the original bond was issued by--
       (A) the City of New York,
       (B) the Port Authority of New York and New Jersey,
       (C) the Metropolitan Transit Authority of the City of New 
     York,
       (D) the New York City Municipal Water Authority, or
       (E) any hospital which is located in the City of New York, 
     described in section 501(c)(3) of such Code, and exempt from 
     tax under section 501(a) of such Code,
       (2) no bond (issued as part of the refunding issue) is 
     issued to advance refund a private activity bond (other than 
     a qualified hospital bond which is a qualified 501(c)(3) 
     bond, as such terms are defined in section 145 of such Code), 
     and
       (3) other than the bonds being refunded by such refunding 
     issue, the original bonds and all prior refundings of such 
     bonds have been redeemed as of the date of the enactment of 
     this Act.
     The preceding sentence shall apply only if the refunding 
     bonds meet the requirements of clauses (iii), (iv), and (v) 
     of section 149(d)(3)(A) of such Code.

     SEC. 404. GAIN OR LOSS FROM PROPERTY DAMAGED OR DESTROYED IN 
                   NEW YORK RECOVERY ZONE.

       (a) General Rule.--For purposes of the Internal Revenue 
     Code of 1986, if a taxpayer elects the application of this 
     section with respect to any eligible property, then any gain 
     or loss on the disposition of the property shall be 
     determined without regard to any compensation (by insurance 
     or otherwise) received by the taxpayer for damages sustained 
     to the property as a result of the terrorist attacks 
     occurring on September 11, 2001. Such election shall be made 
     at such time and in such manner as the Secretary of the 
     Treasury may prescribe, and, once made, is irrevocable.
       (b) Limitation Based on Purchase of Replacement Property.--
       (1) In general.--Subsection (a) shall apply to compensation 
     received with respect to eligible property only to the extent 
     of the cost of any qualified replacement property purchased 
     by the taxpayer.
       (2) Allocation.--If the aggregate compensation received by 
     a taxpayer with respect to all eligible property exceeds the 
     aggregate cost of all qualified replacement property 
     purchased by the taxpayer, such cost shall be allocated to 
     such eligible property in accordance with rules prescribed by 
     the Secretary.
       (3) Special rule for consolidated groups.--For purposes of 
     paragraph (1), an affiliated group filing a consolidated 
     return may elect to treat any qualified replacement property 
     purchased by a member of the group as purchased by another 
     member of the group.
       (c) Eligible Property.--For purposes of this section, the 
     term ``eligible property'' means any tangible property--
       (1) which is section 1245 property (as defined in section 
     1245(a)(3) of the Internal Revenue Code of 1986) or qualified 
     leasehold improvement property (as defined in section 
     168(k)(3) of such Code),
       (2) substantially all of the use of which as of September 
     11, 2001, was in a business establishment of the taxpayer 
     located in the New York Recovery Zone, and
       (3) which was damaged or destroyed in the terrorist attacks 
     of September 11, 2001.
       (d) Qualified Replacement Property.--For purposes of this 
     section--
       (1) In general.--The term ``qualified replacement 
     property'' means tangible property--
       (A) which is described in subsection (c)(1),
       (B) which is purchased by the taxpayer on or after 
     September 11, 2001, and placed in service in the City of New 
     York, New York, before January 1, 2007,
       (C) the original use of which in such city begins with the 
     taxpayer, and
       (D) substantially all of the use of which is reasonably 
     expected to be in connection with a business establishment of 
     the taxpayer located in such city.
       (2) Recapture.--The Secretary shall, by regulations, 
     provide for the recapture of any Federal tax benefit provided 
     by this section in cases where a taxpayer ceases to use 
     property as qualified replacement property and such recapture 
     is necessary to prevent the avoidance of the purposes of this 
     section.
       (e) Coordination With Other Provisions of Code.--For 
     purposes of the Internal Revenue Code of 1986--
       (1) Special rule for treatment of unrecognized gain in 
     eligible property.--Sections 1245 and 1250 of such Code shall 
     not apply to any gain on the disposition of eligible property 
     not recognized by reason of this section.
       (2) Loss election not to apply to eligible property.--If a 
     taxpayer elects the application of this section with respect 
     to any eligible property, the taxpayer may not make an 
     election under section 165(i) of such Code with respect to 
     any loss attributable to the property.
       (3) Basis adjustments of qualified replacement property.--
       (A) In general.--The basis of any qualified replacement 
     property shall be reduced by the amount of any compensation 
     disregarded by reason of subsection (a).
       (B) Special rules for recapture.--For purposes of sections 
     1245 and 1250 of such Code, any reduction under subparagraph 
     (A) shall be treated as a deduction allowed for depreciation, 
     except that for purposes of section 1250(b) of such Code, the 
     determination of what would have been the depreciation 
     adjustments under the straight line method shall be made as 
     if there had been no reduction under subparagraph (A).
       (4) Special rules for applying section 1033.--For purposes 
     of applying section 1033 of such Code to converted property 
     which is eligible property with respect to which an election 
     under subsection (a) has been made--
       (A) the amount realized from the eligible property shall 
     not include any compensation received by the taxpayer which 
     is disregarded by reason of subsection (a), and
       (B) any qualified replacement property shall be disregarded 
     in determining whether property was acquired for the purposes 
     of replacing the converted property.
       (f) Other Definitions and Rules.--For purposes of this 
     section--
       (1) New york recovery zone.--The term ``New York Recovery 
     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.
       (2) Time for assessment.--Rules similar to the rules of 
     subparagraphs (C) and (D) of section 1033(a)(2) of such Code 
     shall apply for purposes of this section.

[[Page 27532]]

       (3) Related party limitation.--Section 1033(i) of such Code 
     shall apply for purposes of this section.

     SEC. 405. CREDIT FOR INDIVIDUALS RESIDING IN LOWER MANHATTAN.

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

     ``SEC. 25C. CREDIT FOR RESIDENTS OF LOWER MANHATTAN.

       ``(a) Allowance of Credit.--In the case of an individual 
     who is a qualified resident with respect to the taxable year, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to $5,000.
       ``(b) Limitations.--
       ``(1) Limitation based on adjusted gross income.--
       ``(A) In general.--The amount of the credit allowed under 
     subsection (a) shall be reduced (but not below zero) by $50 
     for each $1,000 (or fraction thereof) by which the taxpayer's 
     modified adjusted gross income exceeds $150,000.
       ``(B) Modified adjusted gross income.--For purposes of 
     subparagraph (A), the term `modified adjusted gross income' 
     means adjusted gross income determined without regard to 
     sections 911, 931, or 933.
       ``(2) Maximum credit per residence and per qualified 
     resident.--
       ``(A) Per residence.--As provided by the Secretary, the 
     credit under subsection (a) shall not be allowed with respect 
     to more than 1 individual with respect to a principal 
     residence for the taxable year.
       ``(B) Per qualified resident.--The aggregate credit allowed 
     under subsection (a) with respect to any individual for all 
     taxable years shall not exceed $5,000 and no such credit 
     shall be allowed for a taxable year if the credit was so 
     allowed for a preceding taxable year.
       ``(c) Qualified Resident.--For purposes of this section--
       ``(1) In general.--The term `qualified resident' means an 
     individual who--
       ``(A) maintains a principal residence--
       ``(i) which is 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, 
     and
       ``(ii) for at least 6 consecutive months during calendar 
     year 2002 or 2003,
       ``(B) makes more than half of the aggregate rental, 
     mortgage, or any similar payment with respect to the 
     residence during the period described in subparagraph 
     (A)(ii), and
       ``(C) is certified under paragraph (5).
       ``(2) Multiple residents agreement.--For purposes of 
     paragraph (1)(B), an individual shall be treated as making 
     more than half of the aggregate rental, mortgage, or similar 
     payments for the period with respect to the residence if--
       ``(A) no one person with respect to the period makes over 
     half of such payments,
       ``(B) over half of such aggregate payments are made by 
     persons each of whom, but for the fact that such person did 
     not make over half of such payments, would have been a 
     qualified resident with respect to the residence,
       ``(C) the taxpayer contributed over 10 percent of such 
     payments, and
       ``(D) each person described in subparagraph (B) (other than 
     the taxpayer) who contributed over 10 percent of such 
     payments files a written declaration (in such manner and form 
     as the Secretary may prescribe) that such person will not 
     claim a credit with respect to such residence.
       ``(3) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121, except that 
     no ownership requirement shall be imposed.
       ``(4) Year credit allowed.--The credit allowed under 
     subsection (a) shall be allowed for the taxable year in which 
     the period described in paragraph (1)(A)(ii) ends.
       ``(5) Certification.--For purposes of paragraph (1)(C), the 
     appropriate State or local authority shall--
       ``(A) certify whether an individual, requesting such 
     certification, meets the requirements of subparagraphs (A) 
     and (B) of paragraph (1),
       ``(B) issue a certification to such individual meeting such 
     requirements which--
       ``(i) contains a written statement showing the name and 
     address of the person making such certification and the phone 
     number of the information contact for such person, and
       ``(ii) is furnished on or before March 1 of the year 
     following the calendar year in which the credit under 
     subsection (a) is allowed, and
       ``(C) not certify more than 32,000 individuals in any 
     calendar year as being qualified residents for purposes of 
     this section.
       ``(d) Verification.--No credit shall be allowed under 
     subsection (a) to a taxpayer unless the taxpayer includes, on 
     the return of tax for the taxable year--
       ``(1) proof of the certification received under subsection 
     (c)(5), and
       ``(2) such other information as the Secretary determines 
     necessary.
       ``(e) Information Reporting.--
       ``(1) In general.--Any State or local authority which 
     issues the certification required under subsection (c)(5) 
     shall make the return described in paragraph (2) (at such 
     time as the Secretary may prescribe) with respect to each 
     individual to whom such certification is provided.
       ``(2) Form and manner of returns.--A return is described in 
     this subsection if such return--
       ``(A) is in such form as the Secretary may prescribe, and
       ``(B) contains--
       ``(i) the name, address, and TIN of the individual to whom 
     such certification is provided, and
       ``(ii) such other information as the Secretary may 
     reasonably prescribe.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 is amended 
     by inserting after the item relating to section 25B the 
     following:

``Sec. 25C. Credit for residents of lower Manhattan.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

TITLE V--FREEZE OF TOP INDIVIDUAL INCOME TAX RATE AND DOMESTIC SECURITY 
                               TRUST FUND

     SEC. 501. FREEZE OF TOP INDIVIDUAL INCOME TAX RATE AND 
                   DOMESTIC SECURITY TRUST FUND.

       (a) Freeze of Top Individual Income Tax Rate.--Paragraph 
     (2) of section 1(i) (relating to reductions in rates after 
     June 30, 2001) is amended--
       (1) by striking ``37.6'' and inserting ``38.6'', and
       (2) by striking ``35.0'' and inserting ``38.6''.
       (b) Domestic Security Trust Fund.--Subchapter A of chapter 
     98 (relating to trust fund code) is amended by adding at the 
     end the following new section:

     ``SEC. 9511. DOMESTIC SECURITY TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Domestic Security Trust Fund', consisting of such amounts as 
     may be transferred or credited to the Trust Fund as provided 
     in this section and section 9602(b).
       ``(b) Transfers to Fund.--There are hereby transferred from 
     the General Fund of the Treasury to the Domestic Security 
     Trust Fund so much of the additional amounts received in the 
     Treasury by reason of the amendment made by section 501(a) of 
     the Fiscal Stimulus and Worker Relief Act of 2001 (relating 
     to freeze in top individual income tax rate) as does not 
     exceed the sum of--
       ``(1) the expenditures authorized to be made out of the 
     funds.
       ``(2) the amount determined by the Secretary to be 
     necessary to pay the interest on any repayable advance made 
     to the Trust Fund.
       ``(c) Expenditures.--Amounts in the Domestic Security Trust 
     Fund shall be available, as provided by appropriation Acts, 
     for purposes of making expenditures for domestic economic 
     development programs for steel industry loan guarantees to 
     the extent such expenditures are hereafter authorized by law.
       ``(d) Repayable Advances.--
       ``(1) In general.--If amounts in the Trust Fund are not 
     sufficient for the purposes of subsection (c), the Secretary 
     shall transfer from the General Fund of the Treasury to the 
     Trust Fund such additional amounts as may be necessary for 
     such purposes. Such amounts shall be transferred as repayable 
     advances.
       ``(2) Repayment of advances.--
       ``(A) In general.--Advances made to the Trust Fund shall be 
     repaid, and interest on such advances shall be paid, to the 
     General Fund of the Treasury when the Secretary determines 
     that moneys are available for such purposes in the Trust 
     Fund.
       ``(B) Rate of interest.--Interest on advances made to the 
     Trust Fund shall be at a rate determined by the Secretary of 
     the Treasury (as of the close of the calendar month preceding 
     the month in which the advance is made) to be equal to the 
     current average market yield on outstanding marketable 
     obligations of the United States with remaining periods to 
     maturity comparable to the anticipated period during which 
     the advance will be outstanding and shall be compounded 
     annually.''.
       (c) Clerical Amendment.--The table of sections for 
     subchapter A of chapter 98 is amended by adding at the end 
     the following new item:

``Sec. 9511. Domestic security trust fund.''.
       (d) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

                TITLE VII--SOCIAL SECURITY HELD HARMLESS

     SEC. 701. 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

[[Page 27533]]

     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. 702. EMERGENCY DESIGNATION.

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

  Mr. RANGEL (during the reading). Mr. Speaker, I ask unanimous consent 
that the motion be considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from New York (Mr. Rangel) is 
recognized for 5 minutes in support of his motion to recommit.
  Mr. RANGEL. Mr. Speaker, I was moved by the remarks of the Speaker. I 
do not think anyone tried harder in this House in working with the 
minority leader, the gentleman from Missouri (Mr. Gephardt) in trying 
to bring a solution to the problem that is before this House.

                              {time}  0315

  I think it is safe to say that the one thing that they tried to do 
was to try to bring some resolve to the question of providing health 
care to people who are unemployed.
  We provided over $70 billion in our substitute for tax incentives, 
corporate and individual taxes; and we did this because we seriously 
believe that we do have to do certain things in order to create 
capital, in order to create investments, in order to allow people to be 
able to invest. But we truly believe that we should have had an 
opportunity to come before you today and say that the people who are 
left out of this bill, or the people who are left to the governors to 
do what they have to do, or the people that may be left up to the 
Secretary of the Treasury, that we just do not have a provision here 
that I can explain or that you can explain to the people who have been 
left out.
  We know tonight that we had a missed opportunity to give and to take 
on this side of the aisle and the other side, on this side of the House 
and the other side. We missed that opportunity because certain people 
were convinced that the present health delivery system does not work 
and they wanted to change it for the future. It is almost unbelievable 
how you would not give us an opportunity to share with you our views. 
But to hold us in such disrespect that we could not bring it up in 
committee; that we did not have a chance to bring it up in conference; 
that we could not bring it up on the floor, and yet, as we conclude, 
you know that this bill is not going anywhere in the Senate.
  As I look and see the distinguished former chairman of the Committee 
on the Budget, or maybe the chairman of the former Committee on the 
Budget, or maybe the chairman that used to be concerned as to what we 
did with the Social Security Trust Fund and the Medicare Trust Fund, 
who said we were not going to invade it, who said we would put it in a 
lockbox, who said so many things, but at the end of the day, this tax 
cut bill is not paid for, as the substitute was and as the motion to 
recommit asks you to do.
  People have screamed that what we are doing is raising taxes. All we 
are saying is that the President did not know when he gave the $1.3 
trillion tax cut that we were going to go into a recession. He did not 
know that we would be at war. And all we are saying is that as we look 
and see and try to bring some balance to the budget, if not now then in 
the future, at least have it using the language of people on the 
Committee on the Budget and have a set-aside. But we do not have even 
that.
  So as we plunge into deficit spending, we do it using the payments 
that people are making for what? For tax cuts? No. To pay for the war? 
No. For health care? No. For unemployment? No. They are using this for 
their Social Security. The payroll tax is what is keeping us going, and 
we are operating on fumes.
  I just want you to know that we want to give to the Speaker the sense 
of bipartisanship that we have given since the war has begun. But 
partnership means two sides. You first have to talk with people. You 
have to get people's views. And somewhere down the line we have to get 
back to the idea that things that are important enough for tax policy 
and trade policy and unemployment policy and health policy to have 
hearings and witnesses and markups, and to bring it to the floor in a 
bipartisan way.
  We do not have to win. We are in the minority. We can count. But we 
demand the respect to be heard, because we do feel a compassionate 
concern not only that business be allowed to prosper so it can create 
the wealth and the jobs, but those people who are not in the system, 
that have been dislocated, they cannot wait until the other body does 
something. They should have been taken care of by this Congress at this 
time.
  I ask you to support the motion to recommit to give us an opportunity 
to come back and to put some meat on the bones. Do not leave it to the 
Secretary of the Treasury to get us out of this. Do not leave it to the 
President. Leave it to the people that have the experience and the 
jurisdiction in our committees to do something about it. I hope you 
will consider that on the motion to recommit.
  Mr. THOMAS. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore (Mr. Thornberry). The gentleman from 
California (Mr. Thomas) is recognized for 5 minutes.
  Mr. THOMAS. Mr. Speaker, I am sure that there was significant labor 
on the part of my friends to put this package together. The package is, 
and all my colleagues should know, to strike all after the enacting 
clause and insert the following. The following is a bill. And if you 
would take the copy that was provided to me, and as you turn through 
the pages you come to a section, and as in the case nowadays, you know 
when you send things over faxes that at the top you have a heading and 
it tells you where it came from? I may not be completely familiar, but 
this says this is from the USWA Legislative Public Affairs. I believe 
that is United Steelworkers of America Legislative Public Affairs. So a 
portion of this bill, obviously, has been generated through the fax 
machine from folks who I do not believe are under the employment of 
Congress.
  However, most of the debate on my friend's side has been focusing on 
page 100 of our bill, and there he refers to the fact that we say that 
this new plan that we want to put into effect of providing health 
insurance to our colleagues is not there in detail; that what it has is 
an enablement to the Secretary of the Treasury to develop the 
regulations necessary to carry out the plan. Now, one of the dirty 
little secrets inside the bill is they do not have a plan either. 
Because currently COBRA is not subsidized, it is paid for by 
individuals out of their pocket. They propose to set up a plan which 
will subsidize COBRA. They are going to have to create a plan, just 
like they accuse us of doing.
  And when you turn to page 44, lo and behold, ``not later than 60 days 
after the date of enactment of this act, the Secretary of the Treasury, 
in consultation with the Secretary of Labor, shall establish a 
program.'' So, in other

[[Page 27534]]

words, both of us have to establish programs. But what we have got is 
one that supports folk on the kind of insurance they have. If it be 
COBRA, fine; if it is something else, fine. What they have is only a 
plan to set up COBRA. And if you get your insurance from somewhere 
else, you are simply left out.
  Now, I will tell my colleagues that I will shorten this and yield 
back the balance of my time, because you only have to refer to one more 
page in this bill. It happens to be on page 96. It says ``title V: 
Freeze of the top individual income tax rate.'' And guess what? They 
believe a stimulus is to deny the most entrepreneurial area of the 
system, in terms of allowing people to keep marginally a little bit 
more of their own wealth. That is what they call stimulus.
  I invite my colleagues to support or reject that kind of a program 
and ask you to vote ``no'' on the motion to recommit.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Thornberry). Without objection, the 
previous question is ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. RANGEL. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of passage.
  The vote was taken by electronic device, and there were--yeas 177, 
nays 238, not voting 20, as follows:

                             [Roll No. 508]

                               YEAS--177

     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clyburn
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dingell
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Filner
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Harman
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Moore
     Moran (VA)
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Rivers
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Slaughter
     Solis
     Spratt
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wynn

                               NAYS--238

     Abercrombie
     Aderholt
     Akin
     Armey
     Bachus
     Ballenger
     Barcia
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Condit
     Cooksey
     Cox
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dooley
     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
     Hart
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hill
     Hobson
     Hoekstra
     Hooley
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Israel
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Kanjorski
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     Kind (WI)
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Mollohan
     Moran (KS)
     Morella
     Murtha
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Roemer
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Sanchez
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Wu
     Young (FL)

                             NOT VOTING--20

     Baker
     Clement
     Cubin
     Dicks
     Fattah
     Ford
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hefley
     Hilleary
     Luther
     Meek (FL)
     Owens
     Oxley
     Stark
     Stearns
     Taylor (MS)
     Wexler
     Young (AK)

                             {time}   0346

  Mr. HOOLEY of Oregon and Messrs. REYNOLDS, RAMSTAD, HILL, GILLMOR and 
ISRAEL changed their vote from ``yea'' to ``nay.''
  Mr. SANDLIN and Mr. RUSH changed their vote from ``nay'' to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Thornberry). The question is on the 
passage of the bill.
  Pursuant to House Resolution 320, the yeas and nays are ordered.
  This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 224, 
nays 193, not voting 18, as follows:

                             [Roll No. 509]

                               YEAS--224

     Aderholt
     Akin
     Armey
     Bachus
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     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
     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

[[Page 27535]]


     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     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
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (FL)

                               NAYS--193

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Filner
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     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)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     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
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                             NOT VOTING--18

     Baker
     Clement
     Cubin
     Dicks
     Fattah
     Ford
     Hall (OH)
     Hastings (FL)
     Hefley
     Luther
     Meek (FL)
     Owens
     Oxley
     Stark
     Stearns
     Taylor (MS)
     Wexler
     Young (AK)

                              {time}  0354

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

                          ____________________