[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Senate]
[Pages 464-486]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2762. Mr. ENZI (for himself, Mr. Cochran, and Mr. Craig) submitted 
an amendment intended to be proposed by him to the bill H.R. 622, to 
amend the Internal Revenue Code of 1986 to expand the adoption credit, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place, insert:

     SECTION 1. REPEAL OF OCCUPATIONAL TAXES RELATING TO DISTILLED 
                   SPIRITS, WINE, AND BEER.

       (a) Repeal of Occupational Taxes.--

[[Page 465]]

       (1) In general.--The following provisions of part II of 
     subchapter A of chapter 51 of the Internal Revenue Code of 
     1986 (relating to occupational taxes) are hereby repealed:
       (A) Subpart A (relating to proprietors of distilled spirits 
     plants, bonded wine cellars, etc.)
       (B) Subpart B (relating to brewer).
       (C) Subpart D (relating to wholesale dealers) (other than 
     sections 5114 and 5116).
       (D) Subpart E (relating to retail dealers) (other than 
     section 5124).
       (E) Subpart G (relating to general provisions) (other than 
     sections 5142, 5143, 5145, and 5146).
       (2) Nonbeverage domestic drawback.--Section 5131 of such 
     Code is amended by striking ``, on payment of a special tax 
     per annum,''.
       (3) Industrial use of distilled spirits.--Section 5276 of 
     such Code is hereby repealed.
       (b) Conforming Amendments.--
       (1)(A) The heading for part II of subchapter A of chapter 
     51 of such Code and the table of subparts for such part are 
     amended to read as follows:

                  ``Part II--Miscellaneous Provisions

``Subpart A. Manufacturers of stills.
``Subpart B. Nonbeverage domestic drawback claimants.
``Subpart C. Recordkeeping by dealers.
``Subpart D. Other provisions.''

       (B) The table of parts for such subchapter A is amended by 
     striking the item relating to part II and inserting the 
     following new item:

``Part II. Miscellaneous provisions.''

       (2) Subpart C of part II of such subchapter (relating to 
     manufacturers of stills) is redesignated as subpart A.
       (3)(A) Subpart F of such part II (relating to nonbeverage 
     domestic drawback claimants) is redesignated as subpart B and 
     sections 5131 through 5134 are redesignated as sections 5111 
     through 5114, respectively.
       (B) The table of sections for such subpart B, as so 
     redesignated, is amended--
       (i) by redesignating the items relating to sections 5131 
     through 5134 as relating to sections 5111 through 5114, 
     respectively, and
       (ii) by striking ``and rate of tax'' in the item relating 
     to section 5111, as so redesignated.
       (C) Section 5111 of such Code, as redesignated by 
     subparagraph (A), is amended--
       (i) by striking ``and rate of tax'' in the section heading.
       (ii) by striking the subsection heading for subsection (a), 
     and
       (iii) by striking subsection (b).
       (4) Part II of subchapter A of chapter 51 of such Code is 
     amended by adding after subpart B, as redesignated by 
     paragraph (3), the following new subpart:

                 ``Subpart C--Recordkeeping by Dealers

``Sec. 5121. Recordkeeping by wholesale dealers.
``Sec. 5122. Recordkeeping by retail dealers.
``Sec. 5123. Preservation and inspection of records, and entry of 
              premises for inspection.''

       (5)(A) Section 5114 of such Code (relating to records) is 
     moved to subpart C of such part II and inserted after the 
     table of sections for such subpart.
       (B) Section 5114 of such Code is amended--
       (i) by striking the section heading and inserting the 
     following new heading:

     ``SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.'',

     and
       (ii) by redesignating subsection (c) as subsection (d) and 
     by inserting after subsection (b) the following new 
     subsection:
       ``(c) Wholesale Dealers.--For purposes of this part--
       ``(1) Wholesale dealer in liquors.--The term ``wholesale 
     dealer in liquors'' means any dealer (other than a wholesale 
     dealer in beer) who sells, or offers for sale, distilled 
     spirits, wines, or beer, to another dealer.
       ``(2) Wholesale dealer in beer.--The term ``wholesale 
     dealer in beer'' means any dealer who sells, or offers for 
     sale, beer, but not distilled spirits or wines, to another 
     dealer.
       ``(3) Dealer.--The term ``dealer'' means any person who 
     sells, or offers for sale, any distilled spirits, wines, or 
     beer.
       ``(4) Presumption in case of sale of 20 wine gallons or 
     more.--The sale, or offer for sale, of distilled spirits, 
     wines, or beer, in quantities of 20 wine gallons or more to 
     the same person at the same time, shall be presumptive 
     evidence that the person making such sale, or offer for sale, 
     is engaged in or carrying on the business of a wholesale 
     dealer in liquors or wholesale dealer in beer, as the case 
     may be. Such presumption may be overcome by evidence 
     satisfactorily showing that such sale, or offer for sale, was 
     made to a person other than a dealer.''
       (C) Paragraph (3) of section 5121(d) of such Code, as so 
     redesignated, is amended by striking ``section 5146'' and 
     inserting ``section 5123''.
       (6)(A) Section 5124 of such Code (relating to records) is 
     moved to subpart C of part II of subchapter A of chapter 51 
     of such Code and inserted after section 5121.
       (B) Section 5124 of such Code is amended--
       (i) by striking the section heading and inserting the 
     following new heading:

     ``SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.'',

       (ii) by striking ``section 5146'' in subsection (c) and 
     inserting ``section 5123'', and
       (iii) by redesignating subsection (c) as subsection (d) and 
     inserting after subsection (b) the following new subsection:
       ``(c) Retail Dealers.--For purposes of this section--
       ``(1) Retail dealer in liquors.--The term ``retail dealer 
     in liquors'' means any dealer (other than a retail dealer in 
     beer) who sells, or offers for sale, distilled spirits, 
     wines, or beer, to any person other than a dealer.
       ``(2) Retail dealer in beer.--The term ``retail dealer in 
     beer'' means any dealer who sells, or offers for sale, beer, 
     but not distilled spirits or wines, to any person other than 
     a dealer.
       ``(3) Dealer.--The term ``dealer'' has the meaning given 
     such term by section 5121(c)(3).''
       (7) Section 5146 of such Code is moved to subpart C of part 
     II of subchapter A of chapter 51 of such Code, inserted after 
     section 5122, and redesignated as section 5123.
       (8) Part II of subchapter A of chapter 51 of such Code is 
     amended by inserting after subpart C the following new 
     subpart:

                     ``Subpart D--Other Provisions

``Sec. 5131. Packaging distilled spirits for industrial uses.
``Sec. 5132. Prohibited purchases by dealers.''

       (9) Section 5116 of such Code is moved to subpart D of part 
     II of subchapter A of chapter 51 of such Code, inserted after 
     the table of sections, redesignated as section 5131, and 
     amended by inserting ``(as defined in section 5121(c))'' 
     after ``dealer'' in subsection (a).
       (10) Subpart D of part II of subchapter A of chapter 51 of 
     such Code is amended by adding at the end thereof the 
     following new section:

     ``SEC. 5132. PROHIBITED PURCHASES BY DEALERS.

       ``(a) In General.--Except as provided in regulations 
     prescribed by the Secretary, it shall be unlawful for a 
     dealer to purchase distilled spirits from any person other 
     than a wholesale dealer in liquors who is required to keep 
     the records prescribed by section 5121.
       ``(b) Penalty and Forfeiture.--
       ``For penalty and forfeiture provisions applicable to 
     violations of subsection (a), see sections 5687 and 7302.''
       (11) Subsection (b) of section 5002 of such Code is 
     amended--
       (A) by striking ``section 5112(a)'' and inserting ``section 
     5121(c)(3)'',
       (B) by striking ``section 5112'' and inserting ``section 
     5121(c).''
       (C) by striking ``section 5122'' and inserting ``section 
     5122(c).''
       (12) Subparagraph (A) of section 5010(c)(2) of such Code is 
     amended by striking ``section 5134'' and inserting ``section 
     5114''.
       (13) Subsection (d) of section 5052 of such Code is amended 
     to read as follows:
       ``(d) Brewer.--For purposes of this chapter, the term 
     ``brewer'' means any person who brews beer or produces beer 
     for sale. Such term shall not include any person who produces 
     only beer exempt from tax under section 5053(e).''
       (14) The text of section 5182 of such Code is amended to 
     read as follows:
       ``For provisions requiring recordkeeping by wholesale 
     liquor dealers, see section 5112, and be retail liquor 
     dealers, see section 5122.''
       (15) Subsection (b) of section 5402 of such Code is amended 
     by striking ``section 5092'' and inserting ``section 
     5052(d)''.
       (16) Section 5671 of such Code is amended by striking ``or 
     5091''.
       (17)(A) Part V of subchapter J of chapter 51 of such Code 
     is hereby repealed.
       (B) The table of parts for such subchapter J is amended by 
     striking the item relating to part V.
       (18)(A) Sections 5142, 5143, and 5145 of such Code are 
     moved to subchapter D of chapter 52 of such Code, inserted 
     after section 5731, redesignated as sections 5732, 5733, and 
     5734, respectively, and amended by striking ``this part'' 
     each place it appears and inserting ``this subchapter''.
       (B) Section 5732 of such Code, as redesignated by 
     subparagraph (A), is amended by striking ``(except the tax 
     imposed by section 5131)'' each place it appears.
       (C) Subsection (c) of section 5733 of such Code, as 
     redesignated by subparagraph (A), is amended by striking 
     paragraph (2) and by redesignating paragraph (3) as paragraph 
     (2).
       (D) The table of sections for subchapter D of chapter 52 of 
     such Code is amended by adding at the end thereof the 
     following:

``Sec. 5732. Payment of tax.
``Sec. 5733. Provisions relating to liability for occupational taxes.
``Sec. 5734. Application of State laws.''

       (E) Section 5731 of such Code is amended by striking 
     subsection (c) and by redesignating subsection (d) as 
     subsection (c).
       (19) Subsection (c) of section 6071 of such Code is amended 
     by striking ``section 5142'' and inserting ``section 5732''.
       (20) Paragraph (1) of section 7652(g) of such Code is 
     amended--
       (A) by striking ``subpart F'' and inserting ``subpart B'', 
     and
       (B) by striking ``section 5131(a)'' and inserting ``section 
     5111(a)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act, 
     but shall not apply to taxes imposed for periods before such 
     date.
                                  ____

  SA 2763. Mr. ENZI (for himself, Mr. Cochran and Mr. Craig) submitted 
an

[[Page 466]]

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

       At the appropriate place, insert:

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

       (a) In General.--Subsection (d) of section 408 of the 
     Internal Revenue Code of 1986 (relating to individual 
     retirement accounts) is amended by adding at the end the 
     following new paragraph:
       ``(8) Distributions for charitable purposes.--
       ``(A) In general.--No amount shall be includible in gross 
     income by reason of a qualified charitable distribution from 
     an individual retirement account to an organization described 
     in section 170(c).
       ``(B) Special rules relating to charitable remainder 
     trusts, pooled income funds, and charitable gift annuities.--
       ``(i) In general.--No amount shall be includible in gross 
     income by reason of a qualified charitable distribution from 
     an individual retirement account--
       ``(I) to a charitable remainder annuity trust or a 
     charitable remainder unitrust (as such terms are defined in 
     section 664(d)),
       ``(II) to a pooled income fund (as defined in section 
     642(c)(5)), or
       ``(III) for the issuance of a charitable gift annuity (as 
     defined in section 501(m)(5)).
     The preceding sentence shall apply only if no person holds an 
     income interest in the amounts in the trust fund, or annuity 
     attributable to such distribution other than one or more of 
     the following: the individual for whose benefit such account 
     is maintained, the spouse of such individual, or any 
     organization described in section 170(c).
       ``(ii) Determination of inclusion of amounts distributed.--
     In determining the amount includible in the gross income of 
     any person by reason of a payment or distribution from a 
     trust referred to in clause (i)(I) or a charitable gift 
     annuity (as so defined), the portion of any qualified 
     charitable distribution to such trust or for such annuity 
     which would (but for this subparagraph) have been includible 
     in gross income--
       ``(I) shall be treated as income described in section 
     664(b)(1), and
       ``(II) shall not be treated as an investment in the 
     contract.
       ``(iii) No inclusion for distribution to pooled income 
     fund.--No amount shall be includible in the gross income of a 
     pooled income fund (as so defined) by reason of a qualified 
     charitable distribution to such fund.
       ``(C) Qualified charitable distribution.--For purposes of 
     this paragraph, the term ``qualified charitable 
     distribution'' means any distribution from an individual 
     retirement account--
       ``(i) which is made on or after the date that the 
     individual for whose benefit the account is maintained has 
     attained age 59\1/2\, and
       ``(ii) which is made directly from the account to--
       ``(I) an organization described in section 170(c), or
       ``(II) a trust, fund, or annuity referred to in 
     subparagraph (B).
       ``(D) Denial of deduction.--The amount allowable as a 
     deduction under section 170 to the taxpayer for the taxable 
     year shall be reduced (but not below zero) by the sum of the 
     amounts of the qualified charitable distributions during such 
     year which would be includible in the gross income of the 
     taxpayer for such year but for this paragraph.''.
       ``(b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                  ____

  SA 2764. Mr. REID (for himself, Mr. Kyl, Mr. Nelson of Florida, Mr. 
Hatch, and Mr. Miller) proposed an amendment to amendment SA 2698 
submitted by Mr. Daschle and intended to be proposed to the bill (H.R. 
622) to amend the Internal Revenue Code of 1986 to expand the adoption 
credit, and for other purposes; as follows:

       At the end, add the following:

            TITLE __--PERSONAL TRAVEL AND BUSINESS EXPENSES

     SEC. __01. PERSONAL TRAVEL CREDIT.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25B the following new section:

     ``SEC. 25C. PERSONAL TRAVEL CREDIT.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the 
     qualified personal travel expenses which are paid or incurred 
     by the taxpayer during the 60-day period beginning on the 
     date of the enactment of this section.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed a taxpayer under 
     subsection (a) for any taxable year shall not exceed $600 
     ($1,200, in the case of a joint return).
       ``(2) Per trip limitation.--The expenses taken into account 
     under subsection (a), with respect to any trip, shall not 
     exceed $200.
       ``(c) Qualified Personal Travel Expenses.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified personal travel 
     expenses' means reasonable expenses in connection with a 
     qualifying personal trip for--
       ``(A) travel by aircraft, rail, watercraft, or commercial 
     motor vehicle, and
       ``(B) lodging while away from home at any commercial 
     lodging facility.
     Such term does not include expenses for meals, entertainment, 
     amusement, or recreation.
       ``(2) Qualifying personal trip.--
       ``(A) In general.--The term `qualifying personal trip' 
     means travel within the United States (including the 
     Commonwealth of Puerto Rico and the possessions of the United 
     States)--
       ``(i) the farthest destination of which is at least 100 
     miles from the taxpayer's residence,
       ``(ii) involves an overnight stay at a commercial lodging 
     facility and
       ``(iii) which is taken on or after the date of the 
     enactment of this section.
       ``(B) Only personal travel included.--Such term shall not 
     include travel if, without regard to this section, any 
     expenses in connection with such travel are deductible in 
     connection with a trade or business or activity for the 
     production of income.
       ``(3) Commercial lodging facility.--The term `commercial 
     lodging facility' includes any hotel, motel, resort, rooming 
     house, watercraft, or campground.
       ``(d) Special Rules.--
       ``(1) 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.
       ``(2) Expenses must be substantiated.--No credit shall be 
     allowed by subsection (a) unless the taxpayer substantiates 
     by adequate records the amount of the expenses described in 
     subsection (c)(1).
       ``(e) Denial of Double Benefit.--No deduction shall be 
     allowed under this chapter for any expense for which credit 
     is allowed under this section.''.
       (b) Conforming Amendments.--
       (1) Section 24(b)(3)(B) of the Internal Revenue Code of 
     1986 is amended by striking ``23 and 25B'' and inserting 
     ``23, 25B, and 25C''.
       (2) Section 25(e)(1)(C) of such Code is amended by 
     inserting ``25C,'' after ``25B,''.
       (3) Section 25B of such Code is amended by striking 
     ``section 23'' and inserting ``sections 23 and 25C''.
       (4) Section 26(a)(1) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25C''.
       (5) Section 1400C(d) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25C''.
       (6) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting before the item relating to section 26 the 
     following new item:

``Sec. 25C. Personal travel credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. __02. TEMPORARY INCREASE IN DEDUCTION FOR BUSINESS MEAL 
                   EXPENSES.

       (a) In General.--Subsection (n) of section 274 of the 
     Internal Revenue Code of 1986 (relating to only 50 percent of 
     meal and entertainment expenses allowed as deduction) is 
     amended by adding at the end the following:
       ``(4) Temporary increase in limitation.--With respect to 
     any expense for food or beverage paid or incurred on or after 
     the date of enactment of this paragraph, and before the date 
     that is 180 days after such date, paragraph (1) shall be 
     applied by substituting `80 percent' for `50 percent'.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. __03. TEMPORARY RESTORATION OF DEDUCTION FOR SPOUSES 
                   ACCOMPANYING TAXPAYER ON BUSINESS TRAVEL.

       (a) In General.--Section 274(m) of the Internal Revenue 
     Code of 1986 (relating to limitations on travel expenses) is 
     amended by adding at the end the following:
       ``(4) Temporary repeal of limitation.--With respect to any 
     travel expense paid or incurred on or after the date of 
     enactment of this paragraph, and before the date that is 180 
     days after such date, paragraph (3) shall not apply.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
                                  ____

  SA 2765. Mr. GREGG submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:


[[Page 467]]

       At the end add the following:

     SEC. __. TEMPORARY REDUCTION IN CAPITAL GAINS RATE.

       (a) Reduction in Maximum Rate.--Section 1(h)(1)(C) 
     (relating to maximum capital gains rate) is amended by 
     inserting ``(15 percent in the case of 2002 and 2003)'' after 
     ``20 percent''.
       (b) Conforming Amendments.--
       (1) Subparagraph (C) of section 55(b)(3) is amended by 
     striking ``20 percent)'' and inserting ``the percentage in 
     effect under section 1(h)(1)(C))''.
       (2) Paragraph (1) of section 1445(e) by striking ``20 
     percent)'' and inserting ``the percentage in effect under 
     section 1(h)(1)(C))''.
       (3)(A) The second sentence of section 7518(g)(6)(A) is 
     amended by striking ``20 percent'' and inserting ``the 
     percentage in effect under section 1(h)(1)(C)''.
       (B) The second sentence of section 607(h)(6)(A) of the 
     Merchant Marine Act, 1936 is amended by striking ``20 
     percent'' and inserting ``the percentage in effect under 
     section 1(h)(1)(C)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales or exchanges made after December 31, 
     2001.
                                  ____

  SA 2766. Mr. REID (for Mr. Durbin (for himself, Mr. Wellstone, Mr. 
Dayton, Ms. Landrieu, and Mrs. Lincoln)) proposed an amendment to 
amendment SA 2698 submitted by Mr. Daschle and intended to be proposed 
to the bill (H.R. 622) to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; as follows:

       Strike title IV and insert the following:

           TITLE IV--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

     SEC. 401. SHORT TITLE.

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

     SEC. 402. 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 31 days' written notice 
     to the Secretary, terminate such agreement.
       (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 temporary enhanced unemployment 
     compensation to individuals; and
       (B) payments of temporary supplemental unemployment 
     compensation to individuals who--
       (i) have--

       (I) exhausted all rights to regular compensation under the 
     State law (or, as the case may be, all rights to temporary 
     enhanced unemployment compensation); or
       (II) received 26 weeks of regular compensation under the 
     State law (or, as the case may be, 26 weeks of temporary 
     enhanced unemployment compensation);

       (ii) do not have any rights to regular compensation under 
     the State law of any other State (or to temporary enhanced 
     unemployment compensation); and
       (iii) are not receiving compensation under the unemployment 
     compensation law of any other country.
       (2) Special rules regarding temporary enhanced unemployment 
     compensation.--
       (A) In general.--Subject to subparagraphs (B) and (C), 
     eligibility for, and the amount of, temporary enhanced 
     unemployment compensation shall be determined in the same 
     manner as eligibility for, and the amount of, regular 
     compensation is determined under the State law.
       (B) Eligibility for teuc.--In the case of an individual who 
     is not eligible for regular compensation under the State law 
     because--
       (i) of the use of a definition of base period that does not 
     count wages earned in the most recently completed calendar 
     quarter, then eligibility for temporary enhanced unemployment 
     compensation under subparagraph (A) shall be determined by 
     applying a base period ending at the close of the calendar 
     quarter most recently completed before the date of the 
     individual's application for benefits, except that this 
     clause shall not apply unless wage data for that quarter has 
     been reported to the State or supplied to the State agency on 
     behalf of the individual; or
       (ii) such individual does not meet requirements relating to 
     availability for work, active search for work, or refusal to 
     accept work, because such individual is seeking, or is 
     available for, only part-time (and not full-time) work, then 
     eligibility for temporary enhanced unemployment compensation 
     under subparagraph (A) shall be determined without regard to 
     the fact that such individual is seeking, or is available 
     for, only part-time (and not full-time) work, except that 
     this clause shall not apply unless--

       (I) the individual's employment on which eligibility for 
     the temporary enhanced unemployment compensation is based was 
     part-time employment; or
       (II) the individual can show good cause for seeking, or 
     being available for, only part-time (and not full-time) work.

       (C) Increased benefits.--
       (i) Individuals eligible for regular compensation.--In the 
     case of an individual who is eligible for regular 
     compensation (including dependents' allowances) under the 
     State law without regard to this paragraph, the amount of 
     temporary enhanced unemployment compensation payable to such 
     individual for any week shall be an amount equal to the 
     greater of--

       (I) 15 percent of the amount of such regular compensation 
     payable to such individual for the week; or
       (II) $25.

       (ii) Individuals not eligible for regular compensation but 
     eligible for teuc by reason of subparagraph (b).--In the case 
     of an individual who is eligible for temporary enhanced 
     unemployment compensation under this paragraph by reason of 
     either clause (i) or (ii) of subparagraph (B), the amount of 
     temporary enhanced unemployment compensation payable to such 
     individual for any week shall be equal to the amount of 
     compensation payable to such individual (as determined under 
     subparagraph (A)) for the week, plus an amount equal to the 
     greater of--

       (I) 15 percent of the amount so determined; or
       (II) $25.

       (iii) Rounding.--For purposes of determining the amount 
     under clause (i)(I) or (ii)(I), such amount shall be rounded 
     to the dollar amount specified under the State law.
       (c) Nonreduction Rule.--Under an agreement entered into 
     under this title, 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 the average 
     weekly amount of regular compensation which will be payable 
     during the period of the agreement (determined disregarding 
     any temporary enhanced unemployment compensation) will be 
     less than 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.--
     Rules similar to the rules under subsection (b)(2) shall 
     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) Temporary supplemental unemployment compensation to 
     serve as second-tier benefits.--Notwithstanding any other 
     provision of law, neither regular compensation, temporary 
     enhanced unemployment compensation, extended compensation, 
     nor additional compensation under any Federal or State law 
     shall be payable to any individual for any week for which 
     temporary supplemental unemployment compensation is payable 
     to such individual.
       (3) Treatment of other unemployment compensation.--After 
     the date on which a State enters into an agreement under this 
     title, any regular compensation (or, as the case may be, 
     temporary enhanced unemployment compensation) in excess of 26 
     weeks, any extended compensation, and any additional 
     compensation under any Federal or State law shall be payable 
     to an individual in accordance with the State law after such 
     individual has exhausted any rights to temporary supplemental 
     unemployment compensation under the agreement.
       (e) Exhaustion of Benefits.--For purposes of subsection 
     (b)(1)(B)(i)(I), an individual shall be considered to have 
     exhausted such individual's rights to regular compensation 
     (or, as the case may be, rights to temporary enhanced 
     unemployment compensation) under a State law (or agreement 
     under this title) when--
       (1) no payments of regular compensation (or, as the case 
     may be, rights to temporary enhanced unemployment 
     compensation) can be made under such law (or such agreement) 
     because the individual has received all such compensation 
     available to the individual based on employment or wages 
     during the individual's base period; or
       (2) the individual's rights to such compensation have been 
     terminated by reason of the expiration of the benefit year 
     with respect to which such rights existed.
       (f) Weekly Benefit Amount, Terms and Conditions, Etc. 
     Relating to Temporary Supplemental Unemployment 
     Compensation.--For purposes of any agreement under this 
     title--
       (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--
       (A) 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; plus
       (B) the amount of any temporary enhanced unemployment 
     compensation payable to such individual 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

[[Page 468]]

     unemployment compensation and the payment thereof, except 
     where inconsistent with the provisions of this title or with 
     the regulations or operating instructions of the Secretary 
     promulgated to carry out this title; and
       (3) the maximum amount of temporary supplemental 
     unemployment compensation payable to any individual for whom 
     a temporary supplemental unemployment compensation account is 
     established under section 403 shall not exceed the amount 
     established in such account for such individual.

     SEC. 403. TEMPORARY SUPPLEMENTAL 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 
     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 greater of--
       (A) 50 percent of--
       (i) the total amount of regular compensation (including 
     dependents' allowances) payable to the individual during the 
     individual's benefit year under such law; plus
       (ii) the amount of any temporary enhanced unemployment 
     compensation payable to the individual during the 
     individual's benefit year under the agreement; or
       (B) 13 times the individual's weekly benefit amount.
       (2) Weekly benefit amount.--For purposes of paragraph 
     (1)(B), an individual's weekly benefit amount for any week is 
     an amount equal to--
       (A) the amount of regular compensation (including 
     dependents' allowances) under the State law payable to the 
     individual for such week for total unemployment; plus
       (B) the amount of any temporary enhanced unemployment 
     compensation under the agreement payable to the individual 
     for such week for total unemployment.

     SEC. 404. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS 
                   TITLE.

       (a) General Rule.--There shall be paid to each State which 
     has entered into an agreement under this title an amount 
     equal to--
       (1) 100 percent of any temporary enhanced unemployment 
     compensation made payable to individuals by such State;
       (2) 100 percent of any regular compensation which would 
     have been temporary enhanced unemployment compensation under 
     this title but for the fact that its State law contains 
     provisions comparable to the provisions in clauses (i) and 
     (ii) of section 402(b)(2)(B); and
       (3) 100 percent of the temporary supplemental unemployment 
     compensation paid to individuals by the State pursuant to 
     such agreement.
       (b) Determination of Amount.--Sums under subsection (a) 
     payable to any State by reason of such State having an 
     agreement under this title shall be payable, either in 
     advance or by way of reimbursement (as 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.
       (c) Administrative Expenses, Etc.--There is hereby 
     appropriated, without fiscal year limitation, out of the 
     employment security administration account of the 
     Unemployment Trust Fund (as established by section 901(a) of 
     the Social Security Act (42 U.S.C. 1101(a))) $500,000,000 to 
     reimburse States for the costs of the administration of 
     agreements under this title (including any improvements in 
     technology in connection therewith) and to provide 
     reemployment services to unemployment compensation claimants 
     in States having agreements under this title. 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 (42 
     U.S.C. 501(a)) and certified by the Secretary to the 
     Secretary of the Treasury.

     SEC. 405. FINANCING PROVISIONS.

       (a) In General.--Funds in the extended unemployment 
     compensation account (as established by section 905(a) of the 
     Social Security Act (42 U.S.C. 1105(a))), and the Federal 
     unemployment account (as established by section 904(g) of 
     such Act (42 U.S.C. 1104(g))), of the Unemployment Trust Fund 
     (as established by section 904(a) of such Act (42 U.S.C. 
     1104(a))) shall be used, in accordance with subsection (b), 
     for the making of payments (described in section 404(a)) 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 described in section 404(a) which are 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 
     (or, to the extent that there are insufficient funds in that 
     account, from the Federal unemployment account, as so 
     established) to the account of such State in the Unemployment 
     Trust Fund (as so established).

     SEC. 406. FRAUD AND OVERPAYMENTS.

       (a) In General.--If an individual knowingly has made, or 
     caused to be made by another, a false statement or 
     representation of a material fact, or knowingly has failed, 
     or caused another to fail, to disclose a material fact, and 
     as a result of such false statement or representation or of 
     such nondisclosure such individual has received any temporary 
     enhanced unemployment compensation or temporary supplemental 
     unemployment compensation under this title to which such 
     individual was not entitled, such 
     individual--
       (1) shall be ineligible for any further benefits 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 any temporary enhanced unemployment compensation or 
     temporary supplemental unemployment compensation under this 
     title to which such individuals were not entitled, the State 
     shall require such individuals to repay those benefits to the 
     State agency, except that the State agency may waive such 
     repayment if it determines that--
       (1) the payment of such benefits was without fault on the 
     part of any such individual; and
       (2) such repayment would be contrary to equity and good 
     conscience.
       (c) Recovery by State Agency.--
       (1) In general.--The State agency may recover the amount to 
     be repaid, or any part thereof, by deductions from any 
     regular compensation, temporary enhanced unemployment 
     compensation, or temporary supplemental 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 
     enhanced unemployment compensation or the temporary 
     supplemental unemployment compensation to which such 
     individuals were not entitled, except that no single 
     deduction may exceed 50 percent of the weekly benefit amount 
     from which such deduction is made.
       (2) Opportunity for hearing.--No repayment shall be 
     required, and no deduction shall be made, until a 
     determination has been made, notice thereof and an 
     opportunity for a fair hearing has been given to the 
     individual, and the determination has become final.
       (d) Review.--Any determination by a State agency under this 
     section shall be subject to review in the same manner and to 
     the same extent as determinations under the State 
     unemployment compensation law, and only in that manner and to 
     that extent.

     SEC. 407. 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.

     SEC. 408. APPLICABILITY.

       (a) In General.--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 6, 2003.
       (b) Specific Rules.--
       (1) In general.--Under such an agreement, the following 
     rules shall apply:
       (A) Alternative base periods.--The payment of temporary 
     enhanced unemployment compensation by reason of section 
     402(b)(2)(B)(i) (relating to alternative base periods) shall 
     not apply except in the case of initial claims filed on or 
     after the first day of the week that includes September 11, 
     2001.
       (B) Part-time employment and increased benefits.--The 
     payment of temporary enhanced unemployment compensation by 
     reason of subparagraphs (B)(ii) and (C) of section 402(b)(2) 
     (relating to part-time employment and increased benefits, 
     respectively) shall apply to weeks of unemployment described 
     in subsection (a), regardless of the date on which an 
     individual's initial claim for benefits is filed.
       (C) Eligibility for temporary supplemental unemployment 
     compensation.--The payment of temporary supplemental 
     unemployment compensation pursuant to section 402(b)(1)(B) 
     shall not apply except in the case

[[Page 469]]

     of individuals who first meet either the condition described 
     in subclause (I) or (II) of clause (i) of such section on or 
     after the first day of the week that includes September 11, 
     2001.
       (2) Reapplication process.--
       (A) Alternative base periods.--In the case of an individual 
     who filed an initial claim for regular compensation on or 
     after the first day of the week that includes September 11, 
     2001, and before the date that the State entered into an 
     agreement under subsection (a)(1) that was denied as a result 
     of the application of the base period that applied under the 
     State law prior to the date on which the State entered into 
     the agreement, such individual--
       (i) may file a claim for temporary enhanced unemployment 
     compensation based on section 402(b)(2)(B)(i) (relating to 
     alternative base periods) on or after the date on which the 
     State enters into such agreement and before the date on which 
     such agreement terminates; and
       (ii) if eligible, shall be entitled to such compensation 
     only for weeks of unemployment described in subsection (a) 
     beginning on or after the date on which the individual files 
     such claim.
       (B) Part-time employment.--In the case of an individual who 
     before the date that the State entered into an agreement 
     under subsection (a)(1) was 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, such 
     individual--
       (i) may file a claim for temporary enhanced unemployment 
     compensation based on section 402(b)(2)(B)(ii) (relating to 
     part-time employment) on or after the date on which the State 
     enters into the agreement under subsection (a)(1) and before 
     the date on which such agreement terminates; and
       (ii) if eligible, shall be entitled to such compensation 
     only for weeks of unemployment described in subsection (a) 
     beginning on or after the date on which the individual files 
     such claim.
       (3) No retroactive payments for weeks prior to agreement.--
     No amounts shall be payable to an individual under an 
     agreement entered into under this title for any week of 
     unemployment prior to the week beginning after the date on 
     which such agreement is entered into.

     SEC. 409. RULE OF CONSTRUCTION REGARDING CHANGES TO STATE 
                   LAW.

       Nothing in this title shall be construed as requiring a 
     State to modify the laws of such State in order to enter into 
     an agreement under this title or to comply with the 
     provisions of the agreement described in section 102(b).
                                  ____

  SA 2767. Mrs. LINCOLN (for herself, Mr. Graham, Mr. Nelson of 
Florida, Mr. Miller, Mr. Corzine, Mr. Dayton, Mr. Kerry, Mrs. Murray, 
Mr. Torricelli, Mrs. Clinton, and Mr. Schumer) proposed an amendment to 
amendment SA 2698 submitted by Mr. Daschle and intended to be proposed 
to the bill (H.R. 622) to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; as follows:

       At the appropriate place, insert the following:

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

       (a) Congressional Findings.--Congress finds the following:
       (1) The Secretary of Health and Human Services, in 
     regulations promulgated on January 12, 2001, provided for an 
     exception to the upper limits on payment under State medicaid 
     plans so to permit payment to city and county public 
     hospitals at a rate up to 150 percent of the medicare payment 
     rate.
       (2) The Secretary justified this exception because these 
     hospitals--
       (A) provide access to a wide range of needed care not often 
     otherwise available in underserved areas;
       (B) deliver a significant proportion of uncompensated care; 
     and
       (C) are critically dependent on public financing sources, 
     such as the medicaid program.
       (3) There has been no evidence presented to Congress that 
     has changed this justification for such exception.
       (b) Moratorium on UPL Changes.--The Secretary of Health and 
     Human Services may not implement 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 published after October 1, 2001, before the later 
     of--
       (1) June 30, 2002; or
       (2) 3 months after the submission to Congress of the plan 
     described in subsection (c).
       (c) Mitigation Plan.--The Secretary of Health and Human 
     Services shall submit to Congress a report that contains a 
     plan for mitigating the loss of funding to non-State 
     government-owned or operated hospitals as a result of any 
     change in the upper limits on payment for such hospitals 
     published after October 1, 2001. Such report shall also 
     include such recommendations for legislative action as the 
     Secretary deems appropriate.
                                  ____

  SA 2768. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end of the bill, insert the following:

     SEC. __. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.

       (a) Extension of Duty-Free Treatment Under System.--Section 
     505 of the Trade Act of 1974 (19 U.S.C. 2465(a)) is amended 
     by striking ``September 30, 2001'' and inserting ``December 
     31, 2002''.
       (b) Retroactive Application for Certain Liquidations and 
     Reliquidations.--
       (1) In general.--Notwithstanding section 514 of the Tariff 
     Act of 1930 or any other provision of law, and subject to 
     paragraph (2), the entry--
       (A) of any article to which duty-free treatment under title 
     V of the Trade Act of 1974 would have applied if the entry 
     had been made on September 30, 2001,
       (B) that was made after September 30, 2001, and before the 
     date of the enactment of this Act, and
       (C) to which duty-free treatment under title V of that Act 
     did not apply,
     shall be liquidated or reliquidated as free of duty, and the 
     Secretary of the Treasury shall refund any duty paid with 
     respect to such entry. As used in this subsection, the term 
     ``entry'' includes a withdrawal from warehouse for 
     consumption.
       (2) Requests.--Liquidation or reliquidation may be made 
     under paragraph (1) with respect to an entry only if a 
     request therefor is filed with the Customs Service, within 
     180 days after the date of the enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (A) to locate the entry; or
       (B) to reconstruct the entry if it cannot be located.
                                  ____

  SA 2769. Mr. ENZI submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the appropriate place, insert the following:

               TITLE  --EMERGENCY AGRICULTURE ASSISTANCE

     SEC.  01 LIVESTOCK ASSISTANCE PROGRAM.

       (a) In General.--The Secretary of Agriculture (referred to 
     in this title as the ``Secretary'') shall use $500,000,000 of 
     the funds of the Commodity Credit Corporation to make and 
     administer payments for livestock losses to producers for 
     2001 losses in a county that has received an emergency 
     designation by the President or the Secretary after January 
     1, 2001, of which $12,000,000 shall be made available for the 
     American Indian livestock program under section 806 of the 
     Agriculture, Rural Development, Food and Drug Administration, 
     and Related Agencies Appropriations Act, 2001 (Public Law 
     105-277; 114 Stat. 1549A-51).
       (b) Administration.--The Secretary shall make assistance 
     available under this section in the same manner as provided 
     under section 806 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 2001 (Public Law 105-277; 114 Stat. 1549A-51).

     SEC.  02 COMMODITY CREDIT CORPORATION.

       The Secretary shall use the funds, facilities, and 
     authorities of the Commodity Credit Corporation to carry out 
     this title.

     SEC.  03 REGULATIONS.

       (a) In General.--The Secretary may promulgate such 
     regulations as are necessary to implement this title.
       (b) Procedure.--The promulgation of the regulations and 
     administration of this title shall be made without regard 
     to--
       (1) the notice and comment provisions of section 553 of 
     title 5, United States Code;
       (2) the Statement of Policy of the Secretary effective July 
     24, 1971 (36 Fed. Reg. 13804), relating to notices of 
     proposed rulemaking and public participation in rulemaking; 
     and
       (3) chapter 35 of title 44, United States Code (commonly 
     known as the ``Paperwork Reduction Act'').
       (c) Congressional Review of Agency Rulemaking.--In carrying 
     out this section, the Secretary shall use the authority 
     provided under section 808 of title 5, United States Code.

     SEC.  04 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:
       (a) An amount equal to the amount by which revenues are 
     reduced by this title below the recommended levels of Federal 
     revenues for fiscal year 2002, the total of fiscal years 2002 
     through 2006, and the total of fiscal years 2002 through 
     2011, provided in the conference report accompanying H. Con. 
     Res. 83, the concurrent resolution on the budget for fiscal 
     year 2002.

[[Page 470]]

       (b) Amounts equal to the amounts of new budget authority 
     and outlays provided in this title in excess of the 
     allocations under section 302(a) of the Congressional Budget 
     Act of 1974 to the Committee on Finance of the Senate for 
     fiscal year 2002, the total of fiscal years 2002 through 
     2006, and the total of fiscal years 2002 through 2011.
                                  ____

  SA 2770. Mr. CRAIG (for himself, Mr. Torricelli, Mr. Grassley, Mr. 
Santorum, Mr. Frist, Mr. Ensign, and Mr. Hutchinson) proposed an 
amendment to the bill H.R. 622, to amend the Internal Revenue Code of 
1986 to expand the adoption credit, and for other purposes, as follows:

       At the appropriate place, insert the following:

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

       (a) Repeal of Limitations on Number of Medical Savings 
     Accounts.--
       (1) In general.--Subsections (i) and (j) of section 220 of 
     the Internal Revenue Code of 1986 are hereby repealed.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 220(c) of such Code is amended 
     by striking subparagraph (D).
       (B) Section 138 of such Code is amended by striking 
     subsection (f).
       (b) Availability Not Limited to Accounts for Employees of 
     Small Employers and Self-Employed Individuals.--
       (1) In general.--Subparagraph (A) of section 220(c)(1) of 
     such Code (relating to eligible individual) is amended to 
     read as follows:
       ``(A) In general.--The term `eligible individual' means, 
     with respect to any month, any individual if--
       ``(i) such individual is covered under a high deductible 
     health plan as of the 1st day of such month, and
       ``(ii) such individual is not, while covered under a high 
     deductible health plan, covered under any health plan--

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

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

  SA 2771. Mr. DORGAN (for himself, Mr. Smith of Oregon, and Mr. Reid) 
submitted an amendment intended to be proposed by him to the bill H.R. 
622, to amend the Internal Revenue Code of 1986 to expand the adoption 
credit, and for other purposes; which was ordered to lie on the table; 
as follows:

       At the end, add the following:

     SEC.  . 5-YEAR EXTENSION OF CREDIT FOR PRODUCING ELECTRICITY 
                   FROM WIND.

       Section 45(c)(3)(A) of the Internal Revenue Code of 1986 
     (relating to wind facility) is amended by striking ``January 
     1, 2002'' and inserting ``January 1, 2007''.
                                  ____

  SA 2772. Mr. DORGAN submitted an amendment intended to be proposed by 
him to the bill H.R. 622, to amend the Internal Revenue Code of 1986 to 
expand the adoption credit, and for other purposes; which was ordered 
to lie on the table; as follows:

       At the end, add the following:

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

       (a) In General.--Paragraph (1) of section 172(b) of the 
     Internal Revenue Code of 1986 (relating to years to which 
     loss may be carried) is amended by adding at the end the 
     following new subparagraph:
       ``(H) In the case of a taxpayer which has a net operating 
     loss for any taxable year ending in 2000, 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 of 
     the Internal Revenue Code of 1986 (relating to net operating 
     loss deduction) is amended by redesignating subsection (j) as 
     subsection (k) and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Election To Disregard 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) of the 
     Internal Revenue Code of 1986 (relating to general rule 
     defining alternative tax net operating loss deduction) is 
     amended to read as follows:
       ``(A) the amount of such deduction shall not exceed the sum 
     of--
       ``(i) the lesser of--

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

       ``(ii) the lesser of--

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

       (d) Effective Date.--The amendments made by this section 
     shall apply to net operating losses for taxable years ending 
     after 1999.
                                  ____

  SA 2773. Mr. GRASSLEY (for himself, Ms. Snowe, and Mr. Lott) proposed 
an amendment to the bill H.R.

[[Page 471]]

622, to amend the Internal Revenue Code of 1986 to expand the adoption 
credit, and for other purposes; as follows:

       At the end, add the following:

                     TITLE I--INDIVIDUAL PROVISIONS

     SEC. 101. SUPPLEMENTAL STIMULUS PAYMENTS.

       (a) In General.--Section 6428 (relating to acceleration of 
     10 percent income tax rate bracket benefit for 2001) is 
     amended by adding at the end the following new subsection:
       ``(f) Supplemental Stimulus Payments.--
       ``(1) In general.--Each individual who was an eligible 
     individual for such individual's first taxable year beginning 
     in 2000 and who, before October 16, 2001, filed a return of 
     tax imposed by subtitle A for such taxable year shall be 
     treated as having made a payment against the tax imposed by 
     chapter 1 for such first taxable year in an amount equal to 
     the supplemental refund amount for such taxable year.
       ``(2) Supplemental refund amount.--For purposes of this 
     subsection, the supplemental refund amount is an amount equal 
     to the excess (if any) of--
       ``(A)(i) $600 in the case of taxpayers to whom section 1(a) 
     applies,
       ``(ii) $500 in the case of taxpayers to whom section 1(b) 
     applies, and
       ``(iii) $300 in the case of taxpayers to whom subsections 
     (c) or (d) of section 1 applies, over
       ``(B) the taxpayer's advance refund amount under subsection 
     (e).
       ``(3) Timing of payments.--In the case of any overpayment 
     attributable to this subsection, the Secretary shall, subject 
     to the provisions of this title, refund or credit such 
     overpayment as rapidly as possible.
       ``(4) No interest.--No interest shall be allowed on any 
     overpayment attributable to this subsection.''
       (b) Conforming Amendments.--
       (1) Subparagraph (A) of section 6428(d)(1) is amended by 
     striking ``subsection (e)'' and inserting ``subsections (e) 
     and (f)''.
       (2) Subparagraph (B) of section 6428(d)(1) is amended by 
     striking ``subsection (e)'' and inserting ``subsection (e) or 
     (f)''.
       (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 2002)''.
       (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. [RESERVED]

     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:

[[Page 472]]

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

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

       (a) In General.--Paragraph (1) of section 172(b) (relating 
     to years to which loss may be carried) is amended by adding 
     at the end the following new subparagraph:
       ``(H) In the case of a taxpayer which has a net operating 
     loss for any taxable year ending during 2001 or 2002, 
     subparagraph (A)(i) shall be applied by substituting `5' for 
     `2' and subparagraph (F) shall not apply.''
       (b) Election To Disregard 5-Year Carryback.--Section 172 
     (relating to net operating loss deduction) is amended by 
     redesignating subsection (j) as subsection (k) and by 
     inserting after 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.--
       (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.

[[Page 473]]



     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''.
       (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--

[[Page 474]]

       ``(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 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

[[Page 475]]

     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.''

                           TITLE V [RESERVED]

            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 
     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

[[Page 476]]

     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 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.''.

[[Page 477]]

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

[[Page 478]]

       ``(i) all years of service by--

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

     as an employee of a church, a convention or association of 
     churches, including an organization described in section 
     414(e)(3)(B)(ii), shall be considered as years of service for 
     1 employer, and
       ``(ii) all amounts contributed for annuity contracts by 
     each such church (or convention or association of churches) 
     or such organization during such years for such minister or 
     lay person shall be considered to have been contributed by 1 
     employer.
       ``(C) Foreign missionaries.--In the case of any individual 
     described in subparagraph (D) performing services outside the 
     United States, contributions and other additions for an 
     annuity contract or retirement income account described in 
     section 403(b) with respect to such employee, when expressed 
     as an annual addition to such employee's account, shall not 
     be treated as exceeding the limitation of paragraph (1) if 
     such annual addition is not in excess of the greater of 
     $3,000 or the employee's includible compensation determined 
     under section 403(b)(3).
       ``(D) Annual addition.--For purposes of this paragraph, the 
     term `annual addition' has the meaning given such term by 
     paragraph (2).
       ``(E) Church, convention or association of churches.--For 
     purposes of this paragraph, the terms `church' and 
     `convention or association of churches' have the same meaning 
     as when used in section 414(e).''.
       (5) Section 457(e)(5) is amended to read as follows:
       ``(5) Includible compensation.--The term `includible 
     compensation' has the meaning given to the term 
     `participant's compensation' by section 415(c)(3).''.
       (6) Section 402(g)(7)(B) is amended by striking ``2001.'' 
     and inserting ``2001).''.
       (q) Amendments Relating to Section 643 of the Act.--
       (1) Section 401(a)(31)(C)(i) is amended by inserting ``is a 
     qualified trust which is part of a plan which is a defined 
     contribution plan and'' before ``agrees''.
       (2) Section 402(c)(2) is amended by adding at the end the 
     following flush sentence:
     ``In the case of a transfer described in subparagraph (A) or 
     (B), the amount transferred shall be treated as consisting 
     first of the portion of such distribution that is includible 
     in gross income (determined without regard to paragraph 
     (1)).''.
       (r) Amendments Relating to Section 648 of the Act.--
       (1) Section 417(e) is amended--
       (A) in paragraph (1) by striking ``exceed the dollar limit 
     under section 411(a)(11)(A)'' and inserting ``exceed the 
     amount that can be distributed without the participant's 
     consent under section 411(a)(11)'', and
       (B) in paragraph (2)(A) by striking ``exceeds the dollar 
     limit under section 411(a)(11)(A)'' and inserting ``exceeds 
     the amount that can be distributed without the participant's 
     consent under section 411(a)(11)''.
       (2) Section 205(g) of the Employee Retirement Income 
     Security Act of 1974 is amended--
       (A) in paragraph (1) by striking ``exceed the dollar limit 
     under section 203(e)(1)'' and inserting ``exceed the amount 
     that can be distributed without the participant's consent 
     under section 203(e)'', and
       (B) in paragraph (2)(A) by striking ``exceeds the dollar 
     limit under section 203(e)(1)'' and inserting ``exceeds the 
     amount that can be distributed without the participant's 
     consent under section 203(e)''.
       (s) Amendment Relating to Section 652 of the Act.--Section 
     404(a)(1)(D)(iv) is amended by striking ``Plans maintained by 
     professional service employers'' and inserting ``Special rule 
     for terminating plans''.
       (t) Amendments Relating to Section 657 of the Act.--Section 
     404(c)(3) of the Employee Retirement Income Security Act of 
     1974 is amended--
       (1) by striking ``the earlier of'' in subparagraph (A) the 
     second place it appears, and
       (2) by striking ``if the transfer'' and inserting ``a 
     transfer that''.
       (u) Amendments Relating to Section 659 of the Act.--
       (1) Section 4980F is amended--
       (A) in subsection (e)(1) by striking ``written notice'' and 
     inserting ``the notice described in paragraph (2)'',
       (B) by amending subsection (f)(2)(A) to read as follows:
       ``(A) any defined benefit plan described in section 401(a) 
     which includes a trust exempt from tax under section 501(a), 
     or'', and
       (C) in subsection (f)(3) by striking ``significantly'' both 
     places it appears.
       (2) Section 204(h)(9) of the Employee Retirement Income 
     Security Act of 1974 is amended by striking ``significantly'' 
     both places it appears.
       (3) Section 659(c)(3)(B) of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 is amended by striking 
     ``(or'' and inserting ``(and''.
       (v) Amendments Relating to Section 661 of the Act.--
       (1) Section 412(c)(9)(B) is amended--
       (A) in clause (ii) by striking ``125 percent'' and 
     inserting ``100 percent'', and
       (B) by adding at the end the following new clause:
       ``(iv) Limitation.--A change in funding method to use a 
     prior year valuation, as provided in clause (ii), may not be 
     made unless as of the valuation date within the prior plan 
     year, the value of the assets of the plan are not less than 
     125 percent of the plan's current liability (as defined in 
     paragraph (7)(B)).''.
       (2) Section 302(c)(9)(B) of the Employee Retirement Income 
     Security Act of 1974 is amended--
       (A) in clause (ii) by striking ``125 percent'' and 
     inserting ``100 percent'', and
       (B) by adding at the end the following new clause:
       ``(iv) A change in funding method to use a prior year 
     valuation, as provided in clause (ii), may not be made unless 
     as of the valuation date within the prior plan year, the 
     value of the assets of the plan are not less than 125 percent 
     of the plan's current liability (as defined in paragraph 
     (7)(B)).''.
       (w) Amendments Relating to Section 662 of the Act.--
       (1) Section 404(k) is amended--
       (A) in paragraph (1) by striking ``during the taxable 
     year'',
       (B) in paragraph (2)(B) by striking ``(A)(iii)'' and 
     inserting ``(A)(iv)'',
       (C) in paragraph (4)(B) by striking ``(iii)'' and inserting 
     ``(iv)'', and
       (D) by redesignating subparagraph (B) of paragraph (4) (as 
     amended by subparagraph (C)) as subparagraph (C) of paragraph 
     (4) and by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Reinvestment dividends.--For purposes of subparagraph 
     (A), an applicable dividend reinvested pursuant to clause 
     (iii)(II) of paragraph (2)(A) shall be treated as paid in the 
     taxable year of the corporation in which such dividend is 
     reinvested in qualifying employer securities or in which the 
     election 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,

[[Page 479]]

     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).
       (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 2002''.

     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

[[Page 480]]

     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).
       (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.

[[Page 481]]

       (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 2002 had been enacted before 
     the close of fiscal year 2001, and
       ``(ii) section 5402 of Public Law 105-33 (relating to 
     increase in Federal unemployment account ceiling) had not 
     been enacted,
     minus
       ``(B) the amount which was in fact transferred under this 
     section to such account at the beginning of fiscal year 2002.
       ``(3)(A) Except as provided in paragraph (4), amounts 
     transferred to a State account pursuant to this subsection 
     may be used only in the payment of cash benefits--
       ``(i) to individuals with respect to their unemployment, 
     and
       ``(ii) which are allowable under subparagraph (B) or (C).
       ``(B)(i) At the option of the State, cash benefits under 
     this paragraph may include amounts which shall be payable 
     as--
       ``(I) regular compensation, or
       ``(II) additional compensation, upon the exhaustion of any 
     temporary extended unemployment compensation (if such State 
     has entered into an agreement under the Temporary Extended 
     Unemployment Compensation Act of 2002), for individuals 
     eligible for regular compensation under the unemployment 
     compensation law of such State.
       ``(ii) Any additional compensation under clause (i) may not 
     be taken into account for purposes of any determination 
     relating to the amount of any extended compensation for which 
     an individual might be eligible.
       ``(C)(i) At the option of the State, cash benefits under 
     this paragraph may include amounts which shall be payable to 
     1 or more categories of individuals not otherwise eligible 
     for regular compensation under the unemployment compensation 
     law of such State, including those described in clause (iii).
       ``(ii) The benefits paid under this subparagraph to any 
     individual may not, for any period of unemployment, exceed 
     the maximum amount of regular compensation authorized under 
     the unemployment compensation law of such State for that same 
     period, plus any additional compensation (described in 
     subparagraph (B)(i)) which could have been paid with respect 
     to that amount.
       ``(iii) The categories of individuals described in this 
     clause include the following:
       ``(I) Individuals who are seeking, or available for, only 
     part-time (and not full-time) work.
       ``(II) Individuals who would be eligible for regular 
     compensation under the unemployment compensation law of such 
     State under an alternative base period.
       ``(D) Amounts transferred to a State account under this 
     subsection may be used in the payment of cash benefits to 
     individuals only for weeks of unemployment beginning after 
     the date of enactment of this subsection.
       ``(4) Amounts transferred to a State account under this 
     subsection may be used for the administration of its 
     unemployment compensation law and public employment offices 
     (including in connection with benefits described in paragraph 
     (3) and any recipients thereof), subject to the same 
     conditions as set forth in subsection (c)(2) (excluding 
     subparagraph (B) thereof, and deeming the reference to 
     `subsections (a) and (b)' in subparagraph (D) thereof to 
     include this subsection).
       ``(5) Transfers under this subsection shall be made by 
     December 31, 2001, unless this paragraph is not enacted until 
     after that date, in which case such transfers shall be made 
     within 10 days after the date of enactment of this 
     paragraph.''
       (c) Limitations on Transfers.--Section 903(b) of the Social 
     Security Act shall apply to transfers under section 903(d) of 
     such Act (as amended by this section). For purposes of the 
     preceding sentence, such section 903(b) shall be deemed to be 
     amended as follows:
       (1) By substituting ``the transfer date described in 
     subsection (d)(5)'' for ``October 1 of any fiscal year''.
       (2) By substituting ``remain in the Federal unemployment 
     account'' for ``be transferred to the Federal unemployment 
     account as of the beginning of such October 1''.
       (3) By substituting ``fiscal year 2002 (after the transfer 
     date described in subsection (d)(5))'' for ``the fiscal year 
     beginning on such October 1''.
       (4) By substituting ``under subsection (d)'' for ``as of 
     October 1 of such fiscal year''.
       (5) By substituting ``(as of the close of fiscal year 
     2002)'' for ``(as of the close of such fiscal year)''.
       (d) Technical Amendments.--(1) Sections 3304(a)(4)(B) and 
     3306(f)(2) of the Internal Revenue Code of 1986 are amended 
     by inserting ``or 903(d)(4)'' before ``of the Social Security 
     Act''.
       (2) Section 303(a)(5) of the Social Security Act is amended 
     in the second proviso by inserting ``or 903(d)(4)'' after 
     ``903(c)(2)''.
       (e) Regulations.--The Secretary of Labor may prescribe any 
     operating instructions or regulations necessary to carry out 
     this section and the amendments made by this section.

          TITLE 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

[[Page 482]]

       ``(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 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).''.
       (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.

[[Page 483]]



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 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

[[Page 484]]

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

       

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

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

  TITLE 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.
                                  ____

  SA 2774. Mr. HUTCHINSON submitted an amendment intended to be 
proposed by him to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. REPEAL OF SUNSET ON MODIFICATIONS TO COVERDELL 
                   EDUCATION SAVINGS ACCOUNTS AND QUALIFIED 
                   TUITION PROGRAMS.

       Section 901(a) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is amended by striking ``this 
     Act'' and inserting ``this Act (other than sections 401 and 
     402)''.
                                  ____

  SA 2775. Mr. HUTCHINSON submitted an amendment intended to be 
proposed by him to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS 
                   OF SELF-EMPLOYED INDIVIDUALS.

       (a) In General.--Paragraph (1) of section 162(l) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to 100 percent of the amount paid during the 
     taxable year for insurance which constitutes medical care for 
     the taxpayer and the taxpayer's spouse and dependents.''.
       (b) Clarification of Limitations on Other Coverage.--The 
     first sentence of section 162(l)(2)(B) of the Internal 
     Revenue Code of 1986 is amended to read as follows: 
     ``Paragraph (1) shall not apply to any taxpayer for any 
     calendar month for which the taxpayer participates in any 
     subsidized health plan maintained by any employer (other than 
     an employer described in section 401(c)(4)) of the taxpayer 
     or the spouse of the taxpayer.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                  ____

  SA 2776. Mr. HUTCHINSON submitted an amendment intended to be 
proposed by him to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. CREDIT FOR FIRST-TIME HOMEBUYERS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting 
     before section 26 the following new section:

     ``SEC. 25C. PURCHASE OF A NEW PRINCIPAL RESIDENCE BY FIRST-
                   TIME HOMEBUYER.

       ``(a) Allowance of Credit.--In the case of an individual 
     who is a first-time homebuyer of a new principal residence in 
     the United States during any taxable year, there shall be 
     allowed as a credit against the tax imposed by this chapter 
     for the taxable year an amount equal to 10 percent of the 
     purchase price of the residence.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed under subsection 
     (a) shall not exceed $6,500.
       ``(2) Limitation to one residence.--The credit under this 
     section shall be allowed with respect to only one residence 
     of the taxpayer.
       ``(3) Married individuals filing jointly.--In the case of a 
     husband and wife who file a joint return, the credit under 
     this section is allowable only if both the husband and wife 
     are first-time homebuyers, and the amount specified under 
     paragraph (1) shall apply to the joint return.
       ``(4) Married individuals filing separately.--In the case 
     of a married individual filing a separate return, the credit 
     under this section is allowable only if the individual is a 
     first-time homebuyer, and subsection (a) shall be applied by 
     substituting `$3,250' for `$6,500'.
       ``(5) Other taxpayers.--If 2 or more individuals who are 
     not married purchase a new

[[Page 485]]

     principal residence, the amount of the credit allowed under 
     subsection (a) shall be allocated among such individuals in 
     such manner as the Secretary may prescribe, except that the 
     total amount of the credits allowed to all such individuals 
     shall not exceed $6,500.
       ``(c) Definitions.--For purposes of this section--
       ``(1) First-time homebuyer.--
       ``(A) In general.--The term `first-time homebuyer' means 
     any individual is such individual (and if married, such 
     individual's spouse) had no present ownership interest in a 
     principal residence in the United States during the 3-year 
     period ending on the date of the purchase of the principal 
     residence to which this section applies.
       ``(B) One-time only.--If an individual is treated as a 
     first-time homebuyer with respect to any principal residence, 
     such individual may not be treated as a first-time homebuyer 
     with respect to any other principal residence.
       ``(2) New principal residence.--The term `new principal 
     residence' means a principal residence the original use of 
     which begins with the first-time homebuyer.
       ``(3) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121.
       ``(4) Purchase and purchase price.--The terms `purchase' 
     and `purchase price' have the meanings provided by section 
     1400C(e).
       ``(d) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) for any taxable year exceeds 
     the limitation imposed by section 26(a) for such taxable year 
     reduced by the sum of the credits allowable under this 
     subpart (other than this section and sections 23, 24, 25, 
     25B, and 1400C) and section 27, such excess shall be carried 
     to the succeeding taxable year and added to the credit 
     allowable under subsection (a) for such taxable year.
       ``(e) Reporting.--If the Secretary requires information 
     reporting under section 6045 by a person described in 
     subsection (e)(2) thereof to verify the eligibility of 
     taxpayers for the credit allowable by this section, the 
     exception provided by section 6045(e)(5) shall not apply.
       ``(f) Denial of Double Benefit.--No credit shall be allowed 
     under subsection (a) if the credit under section 1400C is 
     allowed.
       ``(g) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.
       ``(h) Property to Which Section Applies.--The provisions of 
     this section apply to a new principal residence if the 
     taxpayer enters into, on or after January 1, 2002, and before 
     January 1, 2003, a binding contract to purchase the 
     residence, and purchases and occupies the residence before 
     July 1, 2003.''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 1016 of the Internal Revenue 
     Code of 1986 (relating to general rule for adjustments to 
     basis) is amended by striking ``and'' at the end of paragraph 
     (27), by striking the period at the end of paragraph (28) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(29) in the case of a residence with respect to which a 
     credit was allowed under section 25C, to the extent provided 
     in section 25C(g).''.
       (2) Section 23(b)(4)(B) of such Code is amended by 
     inserting ``and section 25C'' after ``this section''.
       (3) Section 24(b)(3)(B) of such Code is amended by striking 
     ``23 and 25B'' and inserting ``23, 25B, and 25C''.
       (4) Section 25(e)(1)(C) of such Code is amended by 
     inserting ``25C,'' after ``25B,''.
       (5) Section 25B of such Code is amended by striking 
     ``section 23'' and inserting ``sections 23 and 25C''.
       (6) Section 1400C(d) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25C''.
       (7) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting before the item relating to section 26 the 
     following new item:

``Sec. 25C. Purchase of a new principal residence by first-time 
              homebuyer.''.

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

  SA 2777. Mr. HUTCHINSON submitted an amendment intended to be 
proposed by him to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. TEMPORARY REPEAL OF 1993 INCOME TAX INCREASE ON 
                   SOCIAL SECURITY BENEFITS.

       (a) Restoration of Prior Law Formula.--Subsection (a) of 
     section 86 of the Internal Revenue Code of 1986 is amended to 
     read as follows:
       ``(a) In General.--Gross income for the taxable year of any 
     taxpayer described in subsection (b) (notwithstanding section 
     207 of the Social Security Act) includes social security 
     benefits in an amount equal to the lesser of--
       ``(1) one-half of the social security benefits received 
     during the taxable year, or
       ``(2) one-half of the excess described in subsection 
     (b)(1).''
       (b) Repeal of Adjusted Base Amount.--Subsection (c) of 
     section 86 of such Code is amended to read as follows:
       ``(c) Base Amount.--For purposes of this section, the term 
     `base amount' means--
       ``(1) except as otherwise provided in this subsection, 
     $25,000,
       ``(2) $32,000 in the case of a joint return, and
       ``(3) zero in the case of a taxpayer who--
       ``(A) is married as of the close of the taxable year 
     (within the meaning of section 7703) but does not file a 
     joint return for such year, and
       ``(B) does not live apart from his spouse at all times 
     during the taxable year.''
       (c) Conforming Amendments.--
       (1) Subparagraph (A) of section 871(a)(3) of such Code is 
     amended by striking ``85 percent'' and inserting ``50 
     percent''.
       (2)(A) Subparagraph (A) of section 121(e)(1) of the Social 
     Security Amendments of 1983 (Public Law 98-21) is amended--
       (i) by striking ``(A) There'' and inserting ``There'';
       (ii) by striking ``(i)'' immediately following ``amounts 
     equivalent to''; and
       (iii) by striking ``, less (ii)'' and all that follows and 
     inserting a period.
       (B) Paragraph (1) of section 121(e) of such Act is amended 
     by striking subparagraph (B).
       (C) Paragraph (3) of section 121(e) of such Act is amended 
     by striking subparagraph (B) and by redesignating 
     subparagraph (C) as subparagraph (B).
       (D) Paragraph (2) of section 121(e) of such Act is amended 
     in the first sentence by striking ``paragraph (1)(A)'' and 
     inserting ``paragraph (1)''.
       (d) Maintenance of Transfers to Hospital Insurance Trust 
     Fund.--There are hereby appropriated to the Hospital 
     Insurance Trust Fund established under section 1817 of the 
     Social Security Act amounts equal to the reduction in 
     revenues to the Treasury by reason of the enactment of this 
     section. Amounts appropriated by the preceding sentence shall 
     be transferred from the general fund at such times and in 
     such manner as to replicate to the extent possible the 
     transfers which would have occurred to such Trust Fund had 
     this section not been enacted.
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2001, and 
     before January 1, 2004.
       (2) Subsection (c)(1).--The amendment made by subsection 
     (c)(1) shall apply to benefits paid after December 31, 2001, 
     and before January 1, 2004.
       (3) Subsection (c)(2).--The amendments made by subsection 
     (c)(2) shall apply to tax liabilities for taxable years 
     beginning after December 31, 2001, and before January 1, 
     2004.
                                  ____

  SA 2778. Mr. HUTCHINSON submitted an amendment intended to be 
proposed by him to the bill H.R. 622, to amend the Internal Revenue 
Code of 1986 to expand the adoption credit, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. REPEAL OF 1993 INCOME TAX INCREASE ON SOCIAL 
                   SECURITY BENEFITS.

       (a) Restoration of Prior Law Formula.--Subsection (a) of 
     section 86 of the Internal Revenue Code of 1986 is amended to 
     read as follows:
       ``(a) In General.--Gross income for the taxable year of any 
     taxpayer described in subsection (b) (notwithstanding section 
     207 of the Social Security Act) includes social security 
     benefits in an amount equal to the lesser of--
       ``(1) one-half of the social security benefits received 
     during the taxable year, or
       ``(2) one-half of the excess described in subsection 
     (b)(1).''
       (b) Repeal of Adjusted Base Amount.--Subsection (c) of 
     section 86 of such Code is amended to read as follows:
       ``(c) Base Amount.--For purposes of this section, the term 
     `base amount' means--
       ``(1) except as otherwise provided in this subsection, 
     $25,000,
       ``(2) $32,000 in the case of a joint return, and
       ``(3) zero in the case of a taxpayer who--
       ``(A) is married as of the close of the taxable year 
     (within the meaning of section 7703) but does not file a 
     joint return for such year, and
       ``(B) does not live apart from his spouse at all times 
     during the taxable year.''
       (c) Conforming Amendments.--
       (1) Subparagraph (A) of section 871(a)(3) of such Code is 
     amended by striking ``85 percent'' and inserting ``50 
     percent''.
       (2)(A) Subparagraph (A) of section 121(e)(1) of the Social 
     Security Amendments of 1983 (Public Law 98-21) is amended--
       (i) by striking ``(A) There'' and inserting ``There'';

[[Page 486]]

       (ii) by striking ``(i)'' immediately following ``amounts 
     equivalent to''; and
       (iii) by striking ``, less (ii)'' and all that follows and 
     inserting a period.
       (B) Paragraph (1) of section 121(e) of such Act is amended 
     by striking subparagraph (B).
       (C) Paragraph (3) of section 121(e) of such Act is amended 
     by striking subparagraph (B) and by redesignating 
     subparagraph (C) as subparagraph (B).
       (D) Paragraph (2) of section 121(e) of such Act is amended 
     in the first sentence by striking ``paragraph (1)(A)'' and 
     inserting ``paragraph (1)''.
       (d) Maintenance of Transfers to Hospital Insurance Trust 
     Fund.--There are hereby appropriated to the Hospital 
     Insurance Trust Fund established under section 1817 of the 
     Social Security Act amounts equal to the reduction in 
     revenues to the Treasury by reason of the enactment of this 
     section. Amounts appropriated by the preceding sentence shall 
     be transferred from the general fund at such times and in 
     such manner as to replicate to the extent possible the 
     transfers which would have occurred to such Trust Fund had 
     this section not been enacted.
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2001.
       (2) Subsection (c)(1).--The amendment made by subsection 
     (c)(1) shall apply to benefits paid after December 31, 2001.
       (3) Subsection (c)(2).--The amendments made by subsection 
     (c)(2) shall apply to tax liabilities for taxable years 
     beginning after December 31, 2001.

                          ____________________